Reality Check: VR Will Not Be A Quick Hit

Reality Check: VR Will Not Be A Quick Hit

Hand it to Mark Zuckerberg.Two years and $2 billion later, the Facebook CEO still knows how to stay on message.
When Facebook acquired Oculus VR for $2 billion in 2014, Mr. Zuckerberg billed it as a big stake in what he considered a major future computing platform. He has stayed true to that line. At a developers conference last week, the 32-year-old billionaire donned a virtual-reality headset and demonstrated new social-network functions coming to the system, touting VR as “the perfect platform to put people first.”
Mr. Zuckerberg is right to keep his eye on the long game, but virtual reality needs a commercially viable starting point if it is ever to become mainstream. That starting point is games, which Oculus targeted with its Rift headset that went on sale in April. Its launch didn’t go smoothly. Early shipments were delayed by component shortages. The Rift also came to market without its associated Touch controllers, which will finally start shipping in December.

Facebook doesn’t give out sales figures for Oculus, though Mr. Zuckerberg confirmed that it was “a little bit of a slow start.” Videogame market research firm SuperData estimates fewer than 260,000 units of the Rift headset have sold to date. Gene Munsterof Piper Jaffray believes only about 180,000 units will sell in total this year.
Either is a small number for a gaming platform, illustrating the challenges that Oculus has ahead. And that challenge increases even more with the launch of PlayStationVR this week. SonySNE -0.58 % ’s headset is over 30% cheaper than the Oculus Rift and has the added benefit of selling to an installed base that numbers more than 43 million of PlayStation 4s and likely to increase further thanks to a new, lower-priced version.
But while PlayStationVR provides some stiff competition for Oculus in gaming, the success of Sony’s offering actually could support the long-term view that drove Mr. Zuckerberg to make such a substantial investment in the first place. Before virtual reality expands into a social platform, it will need a much wider cultural acceptance and a much lower price point. Becoming a viable platform for games can bring both eventually, but they will need to sell to beyond a small sliver of the most devoted gamers.
Mr. Zuckerberg’s investment will likely pay off over the long haul. It helps that his peers are also coming on board. Google showed off a new mobile VR headset last week, and Apple CEO Tim Cookhas publicly indicated interest in the technology. But VR was never going to be a quick hit. Those who thought otherwise are getting a needed dose of reality.

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