VR's finances fail to add up

Also, VR has serious bandwidth problems, to go with all of VR's other problems.

First up, from VentureBeat, a timely reminder that there's no money to be made making VR content:

Virtual reality and augmented reality are still in their infancy. But with hundreds of companies, tens of thousands of employees, and over $4 billion in investments to date, the industry is taking a big swing at the future success of VR and AR.

Despite that, there are signs that not all is well in the world of make-believe.

Today, the Brabant Development Agency (BOM) has revealed a wide discrepancy between the revenue ambitions and financing needs of developers in a new 34-page study.

According to the survey, 50 percent of VR and AR developers indicated that they will require more financing in the future, stating they will need additional rounds of more than $1 million. In order to raise this level of investment, companies typically need to have the ambition to achieve at least $10 million in revenue within five years. However, the average developer in the survey expects his firm to generate “only” $1.3 million.

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That wide gap between the needs of each business, and the revenue generating opportunity, is a warning sign.

The warning signs have been all over VR for a while now, but this latest survey of VR companies' financial health is a stark reminder of just how bad things really are, hype notwithstanding. VR is not a thing, in part because of its many still-daunting technological issues. 

Which brings us to this 2nd article, also from VentureBeat:

Imagine playing a lagging Call of Duty run-through. Your stream is buffering and stopping, not to mention you’re probably losing. That’s bad — now imagine if that happened in virtual reality. It’s probably not only borderline unplayable, but it’s actually giving you motion sickness. VR has proven to be a transformational technology. It has the potential to disrupt the media, gaming, and any number of other industries. Yet, it also has the potential to be undone by inadequate supporting technology like your internet speed.

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With streaming the new mandate for all content, VR will have to account for the Internet speeds of everyday consumers and find novel ways to deal with a telecom industry that is growing at its own pace. Here are five issues that must be figured out before VR can take off.

First off, VR hasn't proven itself to be anything, yet, except overhyped, and I've gone into the matter of transformational technologies, and why VR isn't one, in some detail, starting here. But, yes, in a world where internet connectivity is increasingly a requirement for almost everything, VR's high bandwidth demands may just make it a non-starter, especially for "social" applications. 

VB goes on to list of the issues that VR needs to solve, but their list isn't especially comprehensive, and mostly rehashes some pretty obvious items:

Issue #1: Figure out a way to stream high definition video to both eyes

Each VR stream must be duplicated twice to stream individually to both eyes.

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Issue #2: Learn to future proof video for upcoming 4K streams

Netflix’s non-VR 4K streams currently require a connection of at least 25 Mbps. This means most Netflix users in the US will not stream in 4K anytime soon, and 4K VR is essentially inconceivable.

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Issue #3: Solve slow connections to prevent motion sickness

Quality VR requires users to have a speedy Internet connection. US military testsin the 90s showed that low quality video was a primary offender for why people get motion sickness when using VR headsets.

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Issue #4: Devise a way to effectively compress video

And so on. Perhaps most telling, however, is the last issue they list:

Issue #5: Decide to realistically meet consumers’ demands

A major issue facing VR technology is the lack of a killer app. According to a 2016 Vicon study, 28 percent of respondents feel that high quality content will be key for the spread of VR. Unfortunately, developers are currently developing for first-gen hardware and struggling with a world that is still playing catch up in some respect.

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This is a classic Internet chicken and egg scenario, and developers will be required to meet the technology where it’s at in order to create a groundswell for consumer enthusiasm. If they do, technology will follow and VR could be a major force in driving growth of the Internet infrastructure of America.

And that's the rub, isn't it? Without a compelling reason to want to use VR, people won't adopt the technology; but if people don't adopt the technology, VR content makers simply can't make enough money to justify the funding they need to fuel the search for VR's "killer app."