Did 2016 live up to its “Year of VR” billing?

VR Marketing Agency

Attendees at Samsung’s Virtual Reality MWC 2016 Press Conference – Credit: Maurizio Pesce/Flickr

The much-anticipated “Year of VR” has received mixed reviews: to some, virtual reality’s ascendance from the outer reaches of sci-fi fandom to the cusp of mainstream consciousness was a tremendous coup; to others, the failure of tech giants like Facebook and Sony to sell tens of millions of units represented a troubling failure.

From our perspective as a VR marketing agency, 2016 was neither a definitive success for the wider virtual reality industry, nor an unmitigated disaster. Rather, it cemented the technology’s undeniable potential, while also revealing some formidable road blocks.

The Challenges

Once the year’s final sales numbers are tallied, virtual reality’s three most successful platforms – the Oculus Rift, HTC Vive, and Playstation VR – are expected to have sold a combined 2-million units worldwide. (Samsung Gear, for what it’s worth, sold approximately 5-million units). Some industry observers are disappointed in those numbers.

“I’ve spent all year exploring and testing the headsets, and it’s clear to me that Sony, Oculus, and HTC all delivered more than capable first-generation products,” wrote MIT Technology Review’s Signe Brewster in December. “So why aren’t the sales numbers higher?”

That’s a complicated question, but here are some of the answers suggested by Brewster and others:

Price: Cost has been a consistent concern for the virtual reality industry since Oculus first projected the Rift’s lofty price tag. Both the Vive and Rift cost upwards of $600, and require even more expensive computers. The Playstation VR headset comes in at $400, and requires a compatible gaming console. Needless to say, these are not impulse purchases for most consumers.

From a VR marketing agency standpoint, production costs can also be lofty. Cameras capable of capturing cinematic-quality images are rare (don’t worry, we’ve got one), and few professionals have the expertise to shoot and edit in 360-degrees.

Awareness: Many consumers are vaguely aware of VR as an incoming technology, but only about 10 per cent claim to know a lot about it, according to a consumer report conducted by Greenlight VR and Touchstone Research.

“Lack of VR familiarity and VR brand awareness may result in slow VR adoption over the near-term if the brands don’t ramp up marketing communications,” the report stated.

Experience: Although developers are improving the quality of VR content at an astounding rate, truly immersive experiences remain just out of reach, and hardware issues compound the problem. Locomotion within games has not been solved, hand- and body-tracking hardware remains in its infancy, and the most powerful headsets remain tethered by cumbersome wires.

Suffice to say, virtual reality in 2016 was an imperfect and sometimes rudimentary technology. But over the course of 2017 and the coming years, this will rapidly change.

The Reasons to Believe

To begin with, many within the virtual reality realm considered 2016 to be a true success, even without gaudy sales numbers. The release of high-end consumer headsets represented a watershed moment for VR, and their presence has already inspired advances in computing technology. Here’s PC World’s Brad Chacos:

“Despite being around for just a handful of months, virtual reality has inspired totally new genres of computers, wormed its way deep into Windows, and sent the price of graphics cards plummeting.”

These advances will help mitigate the most enduring challenges of VR’s youthful existence.

Price: At the 2017 Consumer Electronics Show in Las Vegas, Lenovo showed off its new Windows 10 VR headset. The rig is around 200 grams lighter than the Vive, and boasts two 1440 x 1440 OLED screens, which should provide higher resolution than either the Vive or the Rift. It can also deliver Vive-style room-scale VR experiences. The expected price? Under $400 USD.

If the headset can live up to Lenovo’s projected standards, this price would represent a massive leap in VR affordability. Thanks to significant advances in the quality and price of graphics cards, the computers required to run virtual reality should become much less expensive, as well. First generation technology is often far too expensive for middle class consumers to indulge in, but as manufacturers develop new solutions and prices fall, expect to see virtual reality sales grow accordingly.

Awareness: Consumers’ lack of detailed awareness of virtual reality products isn’t accidental: tech companies have delayed major marketing pushes in order to temper expectations. And rightly so – even the best VR experiences on the market may be underwhelming to users unfamiliar with the technology’s complexity. Companies like Apple, though widely rumoured to be developing virtual and augmented reality products behind closed doors, are likely to delay any official announcements until they can provide a more polished experience. In the meantime, leading VR developers can continue to discuss their products at industry events and conferences, and target advertising to specific segments of the population, like gamers.

Meanwhile, smaller businesses – such as the VR marketing agency – will continue to produce increasingly high-quality, professional experiences and distribute them to as wide an audience as possible.

Experience: As with any cutting edge technology, first-generation virtual reality products weren’t expected to make optimists’ dreams come true. The development of more powerful graphics cards, eye-tracking technology, and wire-free headsets are well underway, and enthusiasts must be patient. No reasonable observer expected seamless, fully-formed VR to emerge in 2016; rather, as we discussed way back in March, last year was ‘a jumping off point which will lead to far bigger things.’

Look forward to the future

Virtual reality prognosticators who predicted a frenzied surge in mainstream adoption over the past twelve months were mistaken. Headset sales are, as many critics have pointed out, modest. Awareness of the technology is middling, and enthusiasm has been dampened by hardware inconveniences, motion-sickness, and consumers’ uncertain expectations.

But enthusiasm for the technology remains strong. Market projections for the next five to ten years are robust. Artists, doctors, marketers, journalists and architects are dreaming up new applications for virtual reality on a seemingly daily basis, and through their efforts the technology is slowly permeating the public consciousness. While the tech giants work to perfect bleeding edge immersive experiences, numerous companies representing a variety of industries, including our own VR marketing agency, will continue to experiment with VR, helping the technology gain traction among day-to-day consumers.

As Oculus’ founder Palmer Luckey wisely told the Financial Times in January: “it could be five years – it’s more likely to be 10 years,” before virtual reality is accessible and convenient enough to become the next great computing platform.