HTC's death spiral, continued

Way back in 2017, I was confidently predicting that VR would not be a widespread thing in 5 years time, as some were predicting, and that companies which were betting their futures on VR would come to regret those bets. In particular, I'd called out HTC, the former darling of the Android smartphone business, as being especially poorly positioned to make such a bet.

Fast forward five years, and most of those predictions are still holding up. VR is still not a widespread thing, in spite of Facebook Meta dumping $10 billion USD into their VR business and counting, and "Meta" is just the latest attempt to rebrand VR as something else. Do you remember XR? I do, but I'm probably the only one.

And HTC, having already pivoted from VR to Meta, and then to blockchain, is still desperately searching for the buzzword which can save them.

As reported by The Verge:

HTC’s slow-motion fall from smartphone grace is reportedly set to continue in 2022, with the company said to be working on a new “metaverse”-focused phone in April as the remnants of the once-flagship smartphone company continues to desperately cling to whatever zeitgeist term it can to stay afloat, according to DigiTimes.

[...]

The news sounds a lot like HTC’s last major pivot towards relevancy: its Exodus line of blockchain phones that its offered for the past few years. Promising decentralized apps (“Dapps”) and a built-in cryptocurrency wallet, the phones could run blockchain nodes and even mine paltry amounts of cryptocurrency, but — like many instances of blockchain technology — it was a solution largely in search of a problem that never really took off. 

[...]

HTC’s main announcement at MWC 2022 was the debut of a nebulous “Viverse” — the company’s metaverse concept that promises to fuse VR, XR, 5G, blockchain technology, NFTs, and more together into a new, futuristic platform.  

[...]

Given that HTC’s Viverse doesn’t really exist — nor does widespread adoption of any modern metaverse concept — it’s easy for the company to just say it’s making a metaverse app or phone. After all, who’s to say that you aren’t?

I will give HTC this much credit -- they've lasted longer than I thought they would. But considering that consumers are not showing any appetite for Metaverse, or for blockchain products in general, outside of a small group of well-heeled early adopters, I don't see why anyone would want HTC's blockchain-based Metaverse knockoff.

I mean, seriously.... Viverse? So much for dignity, I guess.

Virtual reality meets commercial reality as headset sales plunge

By now, a headline like the one above, which I nicked from The Reg, should not be a surprise. The article that accompanied it, however, was much more optimistic:

Shipments of virtual reality kit have plunged, but growth is just around the corner.

So said analyst firm IDC’s Worldwide Quarterly Augmented and Virtual Reality Headset Tracker, which found “shipments of augmented reality (AR) and virtual reality (VR) headsets were down 30.5 per cent year over year, totalling 1.2 million units in the first quarter of 2018.”

But IDC also predicts a rebound, for a couple of reasons.

One is that 2017 saw lots of headsets bundled with smartphones as the likes of Samsung and HTC sought to stoke the VR market. They’ve since stopped doing that, so this year’s scary shipment figures reflect the end of giveaways rather than a dip in real demand.

Another is that new products like the Oculus Go are both superior to their predecessors and nicely-priced, so their arrival in stores should spur demand.

A third is that the VR/AR ecosystem has matured and it’s therefore becoming easier to create content, which will see business adopt VR. IDC said it “believes the commercial market to be equally important and predicts it will grow from 24 per cent of VR headset shipments in 2018 to 44.6 per cent by 2022.”

How long, exactly, has a VR breakout been "right around the corner?" It seems like forever, but it can't have been more than two years.

Dispensing with that bit of ridiculous boosterism, though, we can move on to the rest of IDC's case here, which is even weaker.

Virtual meets reality

From Jon Evans TechCrunch:

“Despite many pronouncements that 2016 was the year of VR, a more apt word for virtual reality might be absence,” The Economist observed caustically last summer, noting that during that year forecasts of combined sales of VR hardware and software dropped from $5.1bn to $3.6bn to the harsh reality of $1.8bn. But hey, one rough holiday season does not an industry make, right? Surely in 2017 things began to —

— oh. "Shock Stat: In 2017, VR Headset Shipments For Most Top Brands Went DOWN Compared To 2016." So much for the many predictions that VR headset shipments would grow exponentially for years. Crow appears to be the appetizer for nearly every industry dinner these days. But that was before the Oculus Go, right? Except … the Go seems to have sold at most a quarter of a million units in its first few weeks, far behind the comparably priced Nintendo Switch released months earlier, and as I write this languishes well outside the top 20 of Amazon’s “Video Games > Accessories” bestsellers.

[...]

I dropped by the Augmented World Expo in Santa Clara this week, and my main takeaway was that the industry has essentially abandoned the consumer AR/VR space, at least for now. Everyone’s aiming at AR/VR for work now. But how many jobs are there, really, where complex information needs to be accessed in a hands-free way? How many problems can be solved by VR conferencing but not videoconferencing? Sure, they exist, and the tech can be spectacularly great for them; but, again, for now at least, we’re talking Next Little Niche.

[...]

It’s the very early days of a new technology. It’s expensive. It’s still hardware-intensive. We’re still figuring out its best uses, and how it interacts with human physical location, and a whole new grammar of storytelling. But the Oculus Kickstarter launched almost six years ago, and I’ve seen a whole lot of VR/AR/mixed-reality demos since then, and every time, I walk away thinking: “This technology has so much potential.”

But in order to be the Next Big Thing at some point you have to actually start realizing your potential [...] the disheartening truth is that, despite the low-price new standalone hardware, despite all the effort that’s gone into software and design and storytelling, I still don’t feel like we’re meaningfully closer to that than we were two years ago.

Have I mentioned lately that articles like this are becoming increasingly common? Sure, people who are materially or emotionally invested in VR are still trying to sound bullish on its prospects, but those forecasts are looking increasingly ridiculous in the face of clear evidence that VR simply isn't happening, their foundations made of nothing but hype and hot air.

"Drawerware"

With VR's two-year anniversary coming up quickly, I've been seeing a lot of videos and articles in the last week analyzing the current state of the industry, and questioning whether VR has, really, any future at all. This article from TechCrunch is a good example:

Compelling virtual reality shipped to developers and consumers nearly two years ago. The first flagship headsets arrived from Oculus and HTC back in the spring of 2016, offering enough resolution, frame rate, field of view, latency mitigation and position-tracking to produce believable visual immersion.

But no one seems to know what to do with it. To date, no killer app has extended the promise of VR from a novelty to a sticky experience or utility that reaches beyond enthusiasts to resonate with the consumer center of mass.

This isn’t to say that great experiences don’t exist. Apps like Tilt Brush, Elite: Dangerous and Google Earth VR have earned rave reviews and plaudits from enthusiasts. But we have yet to see a household phenomenon like Halo or Lotus 1-2-3 — applications that single-handedly propelled their respective platforms to wide use. At CES 2018, one industry analyst referred to VR as “drawerware,” referring to the likelihood of headsets to be stuffed in a drawer after a few forays into jejune worlds.

As you might have guessed from the title of this post, I was positively tickled by the "drawerware" terminology, credit for which goes to Wired: 

The launches of the HTC Vive, Oculus Rift, and mobile headsets like the Gear VR were heavily hyped, but these new computing devices have failed to develop momentum in the mainstream market. Even Sony, with its newer PSVR headset, has struggled to sell 2 million units to the 70 million owners of the compatible PS4 console in the last year. And in its effort to push its exclusive Gear VR goggles, Samsung gave away perhaps millions of units by bundling a shiny new headset with new Galaxy phones.

"I call it drawerware," says GlobalData analyst Avi Greengart about the Gear VR and other early VR headsets. "It gets put in the back of a drawer ... I have a Vive and PlayStation VR. The experiences are fascinating, but they are not very sticky. Right now, VR is really searching for a killer app.

If you feel like there's a common theme for these articles, you're entirely correct. It seems that an industry which was entirely convinced, just a year ago, that the single biggest obstacle to mass adoption of VR was its price point, are now realizing that dropping price points haven't really helped, and started moving in the direction of the real problem: the simple fact that VR really isn't useful.

Prognostication

December is coming... and with it, what is (traditionally) a slow time for news.

In a normal year, everything that will be announced this year has been announced by now; results for this quarter won't be known until January, so there are no meaningful numbers to analyze; and everyone in the news business is only weeks away from the annual crop of year-end top story roundup articles, which normally hit just before everyone goes on holiday for a couple of weeks.

As such, I wouldn't normally be expecting to have too many new developments to blog about for the rest of the year. Of course, 2017 hasn't been a normal year, and it's always possible that the fast-evolving gacha/loot box story will continue to have legs, but I'm guessing that now's a pretty safe time to make a few predictions before taking a bit of a break myself.

So... prediction time! At least regarding the topics that this blog has mostly been about for the last couple of years.

VR:

Let's start with a nice, quick one.

Having languished all year long, VR will continue to sell poorly this XMas season. Thanks to HTC's just-announced Vive Focus, the Microsoft-backed Mixed Reality headsets have managed to be obsolete before properly hitting the market, and the original Vive, Oculus Rift, and PlayStation VR are all basically dinosaurs now...  and it's not like consumers were all that interested in them before. Sales of VR should continue at this same poor level, with no new major announcements or releases until the new year at the earliest. [UPDATE: June 17th, 2018: RIGHT!] E3 has just happened, with nothing of note being announced for VR, in either hardware or software. Oculus Go's release has had no measurable effect, either.


Prediction: No developments for at least three months, if then. VR will continue to not be a thing.

Windows 10:

November and December are a high-volume time of year for most businesses, when disruptive system-wide OS rollouts are generally considered to be a bad idea; many companies don't even allow new system launches after the end of October (my employer deployed a new order-tracking and -fulfillment system on October 30th, and are coming to rather regret that decision). Basically, this means no new Windows 10 deployments for the rest of the calendar year, and this no Enterprise-driven shift away from Windows 7/Server 2008.

New deployments won't be happening at any brisk pace to start the new year, either, as companies come to realize that keeping pace with Microsoft's overly-aggressive update schedule is simply too difficult and too costly - the Windows-as-a-Service model has some serious problems that Microsoft badly need to solve. January is also not normally a big season for major system changes; many companies have synced their fiscal calendars to the taxation year, which means that the end of the year is also the end of their fiscal year, so January is normally spent on year-end book-keeping -- again, not normally a good time for a disruptive, company-wide new OS rollout.

Individual users won't be migrating to Windows 10 en masse, either. PC sales have been declining steadily for years, so I don't expect to see a wave of XMas PC purchases this year, and users with older PCs have made it very clear that they have no intention of switching unless and until they absolutely have to.

Add one and one and one, and you get no major shifts in the OS market until next February, at the earliest... which mean no big change in NetMarketShare et al's reported statistics until the first of March. Any changes that happen will be marginal, and Windows 10 won't overtake Windows 7 until next year, no matter how badly tech media bloggers want it to happen. The real test will be the period from next March to next November; if Windows 10 is going to take off, it will have to be then, when big companies with fresh budgets can do deployments with the least amount of disruption. If it doesn't happen then, it won't happen until closer to Windows 7's end-of-life in 2020.

Prediction: No big developments for at least three months here, either. [UPDATE: June 17th, 2018: RIGHT!] Or, mostly right, anyway. Microsoft parted ways with the former head of their Windows and Devices division, and broke that division up across the company, which means that they've abandoned their Windows-focused strategy entirely. The fact that this was necessary says all that needs to be said about the strategy itself; even Microsoft finally gave up hoping that it would start producing results. That OS market is still not shifting significantly, with Microsoft themselves no longer expecting that to change, confirms my prediction.

Nintendo Switch:

There's no doubt that Nintendo's having their best year in a long time, but the Switch's first year hasn't been without its problems... chief among them, of course, being the production issues which prevented Nintendo from meeting any of their production milestones, as far as anyone can tell. In a recent presentation to shareholders, Nintendo's CEO answered questions about whether Nintendo would have enough units in stores for the upcoming XMas season by talking about the quarter after that... never a good sign.

I read that as Nintendo not having nearly enough units in stores to sell this season, which is a problem since the period from Black Friday to Boxing Day is when most retailers (in NA, anyway) post up to 50% of their year's sales (October to December can be up to 70% for some retailers). Failing to have enough units in stores at this time of year is a huge misstep, one which Nintendo will not recover from until well after the post-holiday hangover -- consumers normally don't spend much in January or February, with sales not picking up again until March.

Nintendo, of course, were bullishly predicting that they'd hit 15 million units sold by March, but there are a lot of assumptions that seem to underlie that prediction, including the pace of sales remaining more or less constant in spite of supply problems at a critical point in the year, and the traditional early-year sales slowdown. Nintendo are also assuming that every Nintendo household will be buying multiple Switches, something which seems like an unrealistic expectation.

Of course, the Nintendo Switch could become a full-blown craze, just like the original Wii did, but events like that are incredibly rare, and most companies only ever get one of them. The Wii became a craze because it appealed to people who'd never gamed before, in the same way that the PS2 became the best-selling console of all time by also being the cheapest DVD player on the market when it launched; there's no evidence yet that the Switch appeals to anyone except early adopters, longtime Nintendo fans, and core gamers who spend a lot of time travelling and who are willing to buy their favourite games a second time in order to have a version to take with them.

The Switch boasts only two games with real system-selling potential, and both of them are aimed at long-time Nintendo fans who were always going to buy the Switch, anyway; if you're not a long-time Zelda or Mario fan, the platform doesn't have much to offer except the opportunity to spend more than retail (because cartridges, for fuck's sake) buying games for a 2nd time that you either already own, or can buy more cheaply on Steam without incurring several hundred dollars of additional expense. And since Nintendo's gaming handhelds have declined in popularity every year since 2009, largely replaced by the smartphone for most users... well, suffice to say that I think a full-blown craze is unlikely.

The Switch will almost certainly outsell the WiiU, but that's a low bar to clear, frankly. If the Switch is still selling 2 million units a month after it passes the 20 million mark, I'll concede that it's remarkable launch has strong enough legs to keep running; until then, I will continue to regard Nintendo's plans to double production, and then double it again, to be just so much PR bullshit -- statements aimed more at their shareholders than anything else. The Switch is probably here to stay for a while, and will certainly avoid the ignominious fate that claimed the WiiU, but it won't be equalling, let alone surpassing, the PS4's market share anytime soon. And they won't be launching in China, either, no matter how badly analysts want it to happen.

Prediction: The Switch may move another million or so units over the holidays, but it won't hit the 10 million mark by the end of December, and will fall well short of Nintendo's 15-million-by-March target. [UPDATE: December 12th, 2017: WRONG!]

PlayStation & XBox (or, XBO-X):

Sony began 2017 with a commanding position in the console gaming market. Although Steam was still dominant on PC, and had more than twice as many installed users as PS4, Sony still had 53.4 million PS4 users worldwide, and was projecting 18 million more over the course of the year; they had the best-selling non-smartphone VR headset on the market; they had pushed their updated PS4 Pro console out a full year ahead of Microsoft's Scorpio; and they had successfully crushed Nintendo's WiiU, which had launched poorly, sold worse, and finally gone out of production. Sony were winning; all they had to do, to keep winning, was keep their collective foot on the gas.

And so, naturally, they decided to spend the year coasting, instead.

Sony coasted while Nintendo announced, and launched, the Nintendo Switch, a handheld/console hybrid that outsold all other consoles combined last month, at least in the U.S., in spite of persistent supply issues; apparently still stinging from the failure of PS Vita, Sony have no plans to contest the handheld gaming space with an updated machine of their own. Sony coasted while Microsoft announced one consumer-friendly initiative after another, from Play Anywhere to backwards compatibility to cross-play, something on which Sony are still dragging their feet; they kept coasting while Microsoft debuted the XBox One X, the "most powerful gaming console ever made," which can actually outpower and outperform the PS4 Pro -- thus giving Microsoft the hardware performance edge, for the first time this console generation.

With all this coasting, one might be forgiven for thinking that the people in charge of Sony's PlayStation division had basically stopped caring... mainly because that was pretty much what had happened. Even though I'd never heard his name before this year, I wasn't at all surprised to learn that Andrew House, the head of Sony's PlayStation department, was retiring; the whole of Sony's past year felt like the work of someone playing out the string until they could finally retire and spend the rest of their time bass fishing. Sony's gaming division lost a lot of momentum in 2017.

Whether they can regain that momentum in 2018 in anyone's guess. Sony's new PlayStation head, John Kodera, plans to take Sony's gaming efforts into the cloud, a strategy which aligns well with general trends in the videogame industry, while also being something that the Nintendo Switch's damn-it-all cartridges and tiny onboard storage seem poorly positioned to do. Whether they also decide to update the PS Vita with a new, cloud-powered version remains to be seen, but it's almost certain that the PS4 will get another hardware upgrade, the name of which will also be stupid. Sony is still the dominant player in console gaming, with the PlayStation 4 sitting at 64.9 million sold worldwide (compared to the XBox One's 31.25 million, and Nintendo Switch's 7.02 million), and will continue to occupy the #1 spot for a while, but they'll need to work harder to stay on top.

Microsoft, meanwhile, will continue trying to make XBox Live relevant to PC gamers who mostly game on Steam, while pushing 4K gaming to consumers who mostly doesn't own or want 4K televisions. The XBox One X (or XBO-X) will sell well, because it's new and in stock during the XMas shopping season, but it's really only appealing to people that already own 4K TVs and are also already invested in the XBL ecosystem, which may not be as many people as Microsoft thinks it is. With Play Anywhere equalling the end of actual exclusive XBox One games (anything released for XBox is also released for Windows by default), the only remaining move is for Microsoft to (a) ramp up in-house game development, to try to make the XBL/Microsoft Store look like a more inviting place to buy games, and (b) push the development of Mixed Reality gaming. The first will yield no results at all next year, since games take years to develop, and the second will yield no results at all, period, because VR (see above).

Predictions: Sony will try harder, now that they have a PlayStation head who isn't retiring, although exactly what a Cloud-based PS4 will look like, or how Sony chose to react to the challenge from Nintendo, if at all, remain to be seen. [UPDATE: December 8th, 2017: RIGHT!] PSN/Steam crossplay is a possibility here, especially in light of Valve's recently-announced trust-based CS:GO matchmaking system -- House was against crossplay, but Kodera might change course. For their part, Microsoft simply didn't get the XBO-X to market in time; it will sell well enough this holiday season, but not well enough for them to gain ground on Sony, and Nintendo's Switch will outsell their XBOX throughout the coming year. They'll still end 2018 as the #2 console, but not by much.

Somewhat unexpected:

Wow. If you'd told at the start of this year that I'd end it having more to say about the Nintendo Switch than about Windows 10, I'd have said you were crazy, but here we are. I guess Nintendo's comeback console is just much more interesting than anything Microsoft is doing, these days.

Which goes to show the value of prognostications: more often than not, they're wrong. They're still fun, though, and worth writing down -- after all, a prediction that you can later deny having made is kind of cowardly. I'll still check in from time to time, and blog about anything that does catch my eye, including the normal OS market share check-ins on December 1st and January 1st, but that should be about it for the year. No best-of, worst-of, or top-story roundup lists here!

Unless of course, something of interest does happen. And with a year like the one we've been having, it honestly wouldn't fucking surprise me.

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.