Opinion – The Problem with Selling Virtual Reality

I got sick.  Sorry about last week.

Marketing reality.

With the launch of the Oculus Rift and the HTC Vive, Virtual Reality gaming is coming out in a big way.  The considerable excitement and attention belies a very real problem faced by Oculus, Valve, and (soon) Sony in communicating the experience that they’re selling to a new audience.  While there are undoubtedly parallels to the more traditional console market, the new VR consoles have much greater challenges than their predecessors.

The first and most common problem for any new console is to justify its existence.  Gamers often must shell out a lot of money for a small selection of games on the hope that their chosen console will ultimately become home to the experiences they enjoy.  On both the money and games fronts, the VR console markers will have a far harder time than the sellers of Xbox, Playstation, or Wii.  The first and most limiting is the cost.  While games are often big sellers of consoles, the extremely high price point of the VR machines makes their downward pressure on sales far more important than the games library.  At $600 for Oculus Rift and $800 for HTC Vive, both consoles reach and cross the boundaries of the price points many customers are willing to pay.  On top of the cost of the units, buyers must have a high end computer to support the experience pushing the price north of $1500 for the whole package.  No game is going to overcome that for the casual market or even many hardcore gamers.  That being said, a good library will entice new buyers.  Not surprisingly, most launch games feel like tech demos which may sate the early adopter crowd, but won’t bring in the large customer base.  The VR consoles will have to convince developers to invest in deeper experiences if it’s going to get customers off the fence.

Getting the buy in of developers is going to be incredibly difficult.  Unlike the traditional consoles that have a long history of successfully launching new iterations, Oculus Rift and HTC Vive are the first of their kind on the market.  Oculus and Valve will have to convince developers that their gaming machines represent a viable market that’s worth investing in and that will continue to grow.  Without a long track record of success, it’s hard to see a developer commit heavily to VR consoles until they’ve sold sufficiently to justify development costs.  Unfortunately, those development costs are going to be higher than traditional console games.  In addition to inexperience with the format, developers will have to contend with a whole unique market that won’t easily translate to other gaming markets.  Games that rely heavily on VR can’t be developed across consoles the way that traditional gaming can.  It’s telling that many of the first breakout games of this current generation were ports from the preceding generation and were developed across multiple consoles.  I suspect that early VR games will attempt to make minor adaptations to accommodate the VR experience as a way to hedge against committing to develop for systems with such a tiny install base.

As if all of the above were not challenging enough, the worst is yet to coming.  The main selling point of Oculus Rift and HTC Vive is the one thing that they cannot convey in the current market: the VR.  Without actually experiencing the product, most video of VR console games look like worse versions of their traditional brethren.  Videos of people playing these games show people laughing while looking incredibly dumb.  Until a customer puts on a headset, they can’t really understand what VR brings to the gaming table.  With most VR makers operating purely in Internet space, it’s hard to convince all but the already convinced about the virtues of this new kind of experience.  These consoles need to inspire incredible word of mouth to get new gamers to try it.

The problems I’ve laid out aren’t insurmountable, but there are incredibly difficult.  Oculus, Valve, and eventually Sony, will need to work on all of these issues to break out of VR’s enthusiast market.  Among the three, Sony probably has the best chance of making it work.  They’ve got a stable of developers, a strong brand name, and the cheapest set up (PS4 + $400 headset).  Still, Oculus and Valve have their products out first and are clearly more committed to the idea.  Any one of these companies could break into the mainstream, but they’re going to have to work hard to do it.


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Filed under Opinion, video games

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