Stick a pin in this one...

Earlier this week, Facebook released the Oculus Go, a device that nobody was asking for, and which suffers from such a dearth of content that Facebook are also launching a service that will let you watch TV the Oculus Go, just so that you'll have something to do with the thing. VR's evangelists were quick to pronounce this to be the chosen one, the device that will finally win everyone over to VR, in spite of the fact that this new VR device is still just a useless as its more expensive siblings.

For a good spectrum of opinions, compare the Chicago Daily Herald ("the first VR gadget you might actually buy") to The Week Magazine who say straight out that the Oculus Go can't save VR:

The biggest knock against VR is that its ultimate goal is complete immersion, sucking you into whatever entertainment experience you happen to be experiencing. First, there are obvious practical troubles like being unaware of what is going on around you without the normal benefit of peripheral vision or hearing.

More importantly, however, is that a lot of the proposed software for VR is actually pointless. While immersion has always been the aim of video games — and thus offers VR's most compelling use case — most of the other things we want to do with tech aren't actually improved by putting a headset on. The idea of watching Netflix in a virtual room with friends are in a plain sense significantly worse than watching Netflix on a couch on a TV, and repeat failed experiments like Playstation Home. Yes, in theory, having a Skype chat with someone in VR may seem as if it would be more immediate, but it's likely just more cumbersome and difficult than doing it on a phone. Even VR games would require significantly more effort than playing Angry Birds on your phone, again constraining the usefulness of technology.

The point is that VR is at best a niche platform because unlike other forms of tech, it asks you to rebuild your behavior around it. Rather than being some next mainstream wave, its actual uses will likely be in more technical situations, such as skills training, education, or in situations like museums. What it will almost certainly not be is akin to the smartphone: a ubiquitous piece of technology that promises to become used by most of the world's population soon.

As a quick aside, it's nice to see someone else making the same comparison to smartphones that I've been making from the outset.

VR takes another baby step as HTC announces wireless Vive

It's been well over a year since news first broke that Intel was working on high-end wireless VR, and just over a month since Facebook announced the Oculus Go, but it looks like HTC has beaten them both to market with the Vive Focus. As reported by SlashGear:

HTC has announced Vive Focus, a standalone virtual reality headset that eliminates the wires found on the regular HTC Vive. The company unveiled its standalone device at an event in China this evening, explaining that its new VR device gives people the freedom to enjoy virtual reality content wherever they are. Unlike some other standalone VR headsets, you don’t need your phone.

The HTC Vive Focus features a high-resolution AMOLED screen alongside a Snapdragon 835 VR Platform. HTC boasts that its model is the first of its kind to feature an inside-out 6-degree-of-freedom tracking tech otherwise known as 6DoF. Focus uses an open platform called Wave VR and can access the Viveport VR content.

The HTC Focus aims to offer something like the best of both current VR worlds — you get a premium experience as with higher end virtual reality headsets, but with the same portability as things like Gear VR that use a phone to eliminate wires. By eliminating both the PC and the phone requirements, users aren’t dependent on any other device for their VR experiences.

Having just launched a standalone headset under their own Vive brand, it probably shouldn't be a shock to hear that HTC won't be making a Daydream headset anymore.

Going wireless is something that VR desperately needs to do, assuming that wireless VR headsets can still provide an experience that's at least comparable to something like Sony's PSVR. The built-in 6DoF positional tracking may represent a step up over the Microsoft-backed Mixed Reality headsets, and there's no doubt that the Vive Focus looks a lot more like a finished consumer product than both the original Vive:

Oculus Go looks amateurish and cheap by comparison.

Whether the Vive Focus has the performance to truly handle the same higher-end VR as the wired Vive remains to be seen, of course, and neither sexy good looks nor wireless capability solves any of VR's other issues, but there's no disputing that Vive Focus looks like a small step forward. Combining the comfort and finish of PSVR and most MR headsets with the performance of the Vive and the standalone wireless potential of the Oculus Go basically makes the Vive Focus the template for VR, going forward. Make no mistake about it; this is the level new headsets need to meet or beat, going forward.

MSRP is still TBA, of course, and with all of VR's other problems (VR sickness, VR's fundamentally isolating nature, and VR's general uselessness, etc.) still unresolved, it's anyone's guess whether consumers will want even this sexy a piece of kit. As SlashGear puts it:

Focus is a welcomed addition to the growing VR segment, though it is unclear whether it will have large consumer appeal. While it is easy to see how such a portable higher-end device could have appeal in certain industries, for things like immersive medical training or exposure therapy, it is anyone’s guess whether consumers will find it compelling enough to pay the presumably higher price than they would otherwise spend for something that uses their existing smartphone.

My guess is that consumers won't be biting, but we'll see.

HTC drops the Vive's MSRP by US$200

Well, it's happened; HTC had finally done the obvious and predictable thing, and matched Oculus' price cut, apparently in the hope that making the headsets less expensive will stimulate some level of consumer interest. That's not just me snarking about VR, either; while they did their very best to spin this, even HTC admitted today that VR needs a bigger install base.

From Charlie Fink at Forbes:

HTC today announced a $200 price cut on its flagship VR system, The HTC Vive. The announcement follows a similar reduction in the price of Facebook's Oculus Rift last month. Both companies touted the price cut as an effort to grow their community, which HTC President Rikard Steiber said coincides with the arrival of flagship titles like "Doom" and "Ready Player One", based on the upcoming Speilberg VR movie. "I am so proud of the wide array of experiences now available for the Vive. Our developers deserve a bigger audience. The Vive is not just for first adopters anymore."

[...]

The guys did a great job putting on a game face on a dog of an announcement. The reason companies drop their price is because they're not selling enough product. Of course, if you happen to be one of those people on the edge, maybe this, with the product announcements, will tip you over, but I'm skeptical that is a significant number of consumers.

This is still a first adopter market. The need for a high-end gaming PC to run the high-end headsets limits the consumer base to gamers and hobbyists. VR is not easy to use. Ironically this is generally not the fault of HTC or Oculus. High-end gaming PCs are temperamental and difficult to configure. Downloads take a long time and are easily corrupted in the process. This is about as far from plug and play as you can possibly get.

Second, the competitors are coming, including stand-alone (wireless) headsets from HTC itself for Google Daydream. [...] Lenovo is also developing a stand-alone headset. [...] These headsets feature outside facing cameras, eliminating the need for tracking stations. Outside facing cameras can also bring in the real world to create Mixed Reality experiences. [...] In other words, the new stand-alone is superior technologically, wireless and cheaper.

Third, the Windows 10 MR release is weeks away. Firefox just released its VR browser. Sansar just opened its continuous VR world generator to the public. Acer is bringing a $300 dual-use - VR/MR - headset to the new Windows 10 MR platform. No gaming computer required.

Those are just the facts, to which I'll add a few whispers from insiders under very serious NDAs: there will be new, advanced high-end headsets from Vive and Oculus next year. They will compatible with Macs and PCs. They will feature advanced Bluetooth (BLE - Bluetooth Low Energy), better optics, advanced microphones, and hand tracking. The high-end is going to get a lot higher and pull away from the stand-alone models. When these models are announced, the prices for current the Vive and Oculus 1.0 models are going to face more price pressure. There will be substantial resale of these models when the new ones come out. HTC and Oculus need to move these off the shelves this Christmas, at whatever price.

In other words, don't bother with this generation of the tech, because it's already obsolete; Oculus and HTC are just hoping to move their unwanted inventory before the next-gen VR headsets arrive. Those next-gen VR headsets still won't have solved the problem of virtual locomotion, BTW, or the problem of VR sickness, or the fundamental problem of VR being basically useless, which means that they aren't going to sell, either. Let's face it: current-gen VR headsets aren't gathering dust on store shelves because they lack Bluetooth features.

Early in the smartphone era, handsets like the iPhone were expensive, but they were also obviously useful, resulting in plenty of consumers who wanted them, but who couldn't afford them. So when Google's Android brought the price of smartphones down, it stimulated the development of the smartphone market by putting products economically within reach of more of those same consumers.

VR is not in the same position; the problem isn't that consumers want VR, but can't afford it. Consumers are simply not interested in VR. When Oculus closed their BestBuy demo stations, it wasn't because they couldn't convince consumers to buy the Rift; they couldn't convince consumers to try the Rift, with some locations going days on end without doing a single demo (during the busy holiday shopping season, no less).

VR headset makers are still trying to convince people to buy into VR by showing them experiences that VR enhances; until they figure out some activity that VR actually enables (i.e. something that's made possible by VR, rather than just being made better by VR), the tech will continue to be a very tough sell, at any price.

The market speaks: VR really isn't a thing.

Not yet, at least.

From Business Insider:

Facebook is closing around 200 of its 500 Oculus virtual reality demo stations at Best Buy locations across the US, Business Insider has learned.

The scaling back of Facebook's first big retail push for VR comes after workers from multiple Best Buy pop-ups told BI that it was common for them to go days without giving a single demonstration. An internal memo seen by BI and sent to affected employees said the closings were because of "store performance."

[...]

Multiple "Oculus Ambassador" workers BI spoke with said that, at most, they would sell a few Oculus headsets per week at most during the holiday season, and that foot traffic to their pop-ups decreased drastically after Christmas.

"There'd be some days where I wouldn't give a demo at all because people didn't want to," said one worker at a Best Buy in Texas who asked to remain anonymous. Another worker from California said that Oculus software bugs would often render his demo headsets unusable.

"They didn't press on selling," the worker from Texas said of Oculus. "Their main thing was to have us do demonstrations and get people talking about Oculus."

Ouch.

There's a reason why the hype around VR has died down this year, after reaching such a feverish pitch in 2016. It's because consumers really aren't buying it. They're not buying the hype, and they're not buying VR headsets, either, and the nascent VR industry doesn't seem to know what to do about that. The only VR headset that sold at all well is Samsung's Gear VR, which did all of its sales alongside Google's Cardboard -- that was when consumer interest was at its peak, allowing Cardboard to move 5 million units, with Gear VR close behind.

But that was then, and this is now, and right now, consumers have basically zero interest in VR. Google shipped 5 million units of Cardboard during the height of last year's early VR hype cycle, but this year, Verizon is literally giving the much more polished Daydream away with every Pixel smartphone. The likes of Phandroid (who provided the chart at right) are still trying to hype 2017 as VR's year, but for reals this time, unlike 2016 which they said would be VR's year but which ultimately flopped, but it all feels more than a little desperate. You can practically smell the flop sweat.

VR has too many unsolved problems, too few worthwhile apps that make good use of the technology, and no sign that VR's pushers have any idea yet just what VR is really good for; the tech feels like it was rolled out to the marketplace while still being in beta, and the first impression that its made is hurting not only sales of VR, but interest in VR. When the second-highest-profile brand of VR headset can't even get people to try the thing in-store, I think it's fair to say that VR is in trouble. 

Consumers are voting with their feet and wallets, and it's hurting VR adoption across the board. HTC Vive isn't selling that much better then Oculus Rift, and even Sony's PSVR is struggling. VR isn't ready yet, and companies fighting for their share of the VR market may do better to work together on solving the platform's issues, so that they actually have a market to divvy up. Because right now, they really don't.

What happened to VR?

Well, if you're reading my blog, then you probably already know what happened, but Business Insider has a pretty fair assessment of the state of VR play:

Over the past year, evidence has stacked up that VR isn't as hot as everyone thought it'd be, and it feels poised to go the way of the smartwatch, a once-promising new computing platform that ultimately flopped once introduced into the real world.

The evidence is tough to ignore.

Following the launch of the Oculus Rift and HTC Vive, we have yet to see a breakthrough game or app. Plus, the cost is prohibitive for most people: The headsets start at $600, and go up from there if you want the motion controllers and other accessories. Plus you need a powerful computer to run the hardware, which will run you at least another $500.

Sony was supposed to be the savior of the high-end VR headset. Its new PlayStation VR is designed to work with the tens of millions of PlayStation 4 consoles already out in the wild, giving it an immediate advantage over the competition. But, like with Vive and Oculus Rift, there wasn't much enthusiasm around the games and content for the PlayStation VR.

Google appears to be stumbling too. It slashed the price of its new Daydream View headset this week to $49 following a report from Amir Efrati of The Information that Google is "disappointed" with early usage numbers for the device.

Meanwhile, overall sales of VR headsets are very low, and PlayStation VR appears to have performed well worse than expected, according to data compiled by market research firm SuperData.

Given VR's lack of a value proposition, I was expecting to see that sales of these expensive white elephants had suffered, but I had no idea that sales for VR hardware were this terrible. So far, only Gear VR has actually topped the million mark in sales; PSVR managed only 28.85% of its sales forecast from only a few months earlier; the Rift and the Vive don't have a million users between them; and Google is selling Daydream at fire sale prices, apparently oblivious to the fact that a $50 add-on to an $900 Pixel smartphone still puts its VR offering well above the price point of either Oculus' or HTC's offerings.... for a smartphone-based VR experience.

This is beyond simply "not pretty." This is disastrous. And there's no sign of it improving significantly anytime soon. It's a good thing that Mark Zuckerberg is OK with spending another $3 billion on VR R&D before seeing a dollar in profits, because they're not going to be making a profit on Oculus anytime in the foreseeable future. Neither are HTC, Valve, Sony, or Google. Or anyone else that's pinned their hopes (and futures) to the VR hype train.

BI's article ends with the blunt assertion that VR "is going to remain a niche product at best." Honestly, given how badly VR is performing so far, and how many hurdles it faces, I think that's an overly optimistic assessment. So far, VR isn't even a large enough niche to turn a profit, given how expensive it is to develop for the platform.

VR still isn't catching on, and people are starting to notice

It looks like the Black Friday/Cyber Monday weekend were not kind to VR, because I'm suddenly seeing a lot of stories like this one, from bizjournals.com:

This year was supposed to be a breakout one for virtual reality.

For the first time, motivated fans of the technology can choose from Facebook’s Oculus RIft, Google Daydream, Sony’s Playstation VR, HTC Vive and Samsung’s Gear VR. One analyst estimates some 4.1 million people will buy a VR headset by the end of the year — far from the breakout that had been expected.

In a new report, SuperData says Sony will likely end the year selling just 750,000 PlayStation VR headsets, significantly lower than the firm’s earlier forecast of 2.6 million units. Daydream will likely sell 261,000 units this year, lower than SuperData’s estimate of 450,000.

Meanwhile, sales of the Gear VR, HTC Vive and Oculus Rift will likely come in at 2.3 million units, 450,000 units and 355,000 units respectively, roughly in line with SuperData’s earlier forecasts.

High cost, lack of content, and low demand are cited as the reasons why VR isn't catching fire the way VR evangelists have been insisting was about to happen any day now. Superdata, remember, who are getting all kinds of exposure today for revising their VR sales forecasts downwards, were predicting (not very long ago) that VR would be worth $30 billion a year in revenue by 2020; it looks like reality is starting to reassert itself, instead, reality being the things that continue to be true regardless of what you want to believe.

VR's (not-at-all) surprisingly low sales performance may explain why Ubisoft just announced that all of their VR games will feature cross-platform support for all of the different VR headsets available, including Vive, Rift, PSVR, and the upcoming Windows 10 PCVR flavours. It may also explain why HTC is already hard at work on Vive 2.0, which will apparently be lighter and more comfortable to wear/use, among other things (HTC Vive has only sold 140,000 units so far).

I stand by my earlier predictions on VR. The technology is not ready; it's not only too expensive, lacking a killer app, and suffering from low consumer interest, it has fundamental unsolved problems which will prevent VR developers from solving those three problems for years to come. And until VR is not only more powerful, more comfortable, more portable, more versatile, easier to use, more useful, and less expensive, it's not going to see wide adoption.

Google's Daydream will not start a VR revolution

Google has finally thrown their hat in the VR ring (for real, anyway), and tech media writers can't say enough good things about their Daydream platform.

Here's the important part: Daydream is not a standalone VR headset, and is not competing with Oculus Rift, HTC Vive, or Sony's PlayStation VR. Instead, it's an attachment for your Pixel smartphone (also announced today), which makes it basically the same as Samsung's Gear VR, except for Google's new line of phones.

Gear VR sold pretty well, but the fact that Samsung has recently announced that they're keeping their "standalone" VR headset (in the sense of including the display elements in the headset; Gear VR and Daydream both need your smartphone to provide the screens) offering on the sidelines until they see how the VR market shapes up speaks volumes -- that even a company with a decently-selling mobile VR products is staying out of the more expensive home VR market says quite clearly that the success of standalone VR headsets is no sure thing.

Whether Google will sell enough Pixel phones in a mature smartphone market to be able to sell enough Daydream VR accessories to actually compete with Gear VR's market share is, of course, anyone's guess. It would seem that Pixel is aimed more at the iPhone than the Galaxy Note, but sales of all smartphones have plateaued recently, mainly because everybody already has a good-enough phone, and thus no pressing need to upgrade.

Added to which, Google's previous forays into consumer electronics, including both the now-defunct Nexus phone and the now-defunct Google Glass, don't exactly inspire confidence in Google's ability to compete head-to-head with Apple as a manufacturer of consumer electronics.

The Pixel does look like a good phone, but at prices ranging from US$650 to US$870, MSRP, data plan not included, it's tough to imagine Pixel taking any significant share of the smartphone market away from long-time iPhone customers, or from other Android phone lines. I could be wrong, of course, but I can't help but feeling like this move comes at least a year too late.

I feel confident making one prediction, though: Google's not going to sell enough Pixel + Daydream bundles to make VR into any more of a thing than it is now.