For VR to succeed in the consumer space, an ecosystem of developers making content that users want to buy is an absolute must. Oculus for its part has attempted to kickstart that ecosystem by investing hefty sums in content developers, and now the company says it’s starting to pay off.
With the backing of Facebook, Oculus has publicly committed to investing $500 million into VR content development. The fruits of that funding have brought some of VR’s most polished and substantive games to date, like Chronos, Edge of Nowhere, Robo Recall, Dragon Front, SUPERHOT VR, The Unspoken, and more. Though the exclusivity attached to many Oculus funded games has been controversial, the company believes it’s the right approach to starting the VR content ecosystem, as Oculus’ Head of Content, Jason Rubin, told us last year:
“[One way create a sustainable customer/developer ecosystem], is to do it the way PC originally did it which started 30 years ago; I was making games when the PC came out. The way you do it is, you put it in a ziplock bag, you put it on the shelf, somebody buys your ziplock game, and the addressable market gets a little bigger. [Then] you make a better game that you put in a very cheap box and over time it gets to $100 million games. It took 30 years. We don’t want [VR] to take 30 years. We want this generation to race forward. Because we don’t have the luxury that the PC market had, where it was the best-looking thing out there. Well, we’re going up against Grand Theft Auto and Call of Duty. [Gamers] have the ability to play these triple-A games. So if we don’t compete visually [and] depth-wise, if we don’t jump out there and give them great games to play right off the bat, we may never have what the PC had. We may never have the stepping stone. What we are doing now is the only way to viably jumpstart the market.”
Now Oculus says its investments are starting to snowball into a growing ecosystem. Speaking with Rubin last week, he told Road to VR that “multiple titles have made more than $1 million in the Oculus Store alone.”
In this fledgling ecosystem, bringing in $1 million in revenue from a VR title is a rarity, even for games available on both the Oculus Store and Steam. To hear that a handful of apps have generated as much from just the Oculus Store is sure to bolster developers’ spirits.
For Steam’s part, the most recent indication of VR developer success came from Valve in February which said that some 30 titles had made more than $250,000 on the platform(and we know that several of those—like Job Simulator and Raw Data—have exceeded $1 million in revenue as well).
“When VR launched there was no [installed market] for VR games. So even an inexpensive title didn’t have a lot of opportunity for success,” Rubin said. But now with those few strong successes under the company’s belt, and a growing user base, things are different; Rubin says he’s confident that small to medium-sized teams making VR games can turn a profit without needing an investment to offset their risk.
“That doesn’t mean we’re done with investment,” he says, “but we move up the investment chain. So we used to invest $100K, $200K, but we don’t have to do that so much anymore because those people can get paid out [from the install base].
Instead, the company is now operating at a higher level, funding content in the $1 million to $5 million range, since it’s games of that scale where the risk has shifted to and where developers are less likely to be sure they can break even.
Oculus’ plan is to keep moving up this funding scale with the hope that each time they take a step up, the prior steps will have enough of an install base for developers to be able to justify developing VR games without special funding. If the company plays its cards right, the hope is that it the VR game development ecosystem will eventually catch up to the traditional game development ecosystem which can organically support the kind of huge AAA productions that many gamers (VR or otherwise) want.
If and when the VR game development ecosystem catches up, Rubin says that Oculus’ funding role will begin to look more like that of Sony and Microsoft.
“We will [eventually] move into the position where the larger console manufacturers are at—where they are funding content to fill specific goals, not because it wouldn’t get made otherwise.”