Like any new sector, virtual reality faces a number of challenges as it fights for its place in the market – and short-term profit is certainly one of them.
While hype for the technology is through the roof, one thing that will likely not be is software sales. With headsets costing well over 500 and a tiny install base currently in place, developers face a tricky task in hitting a price point that will lure consumers but also recoup development costs.
The challenge is that it’s an entirely new platform and nobody knows what works and doesn’t work,” CCP’s chief customer officer Maria Sayans said. We live in an environment with many different pricing models, but they’re all on relatively mature platforms, so it’s easy to forget what it was like when the App Store or Steam first came out.”
VR developer Dave Ranyard agrees with the App Store comparison. Pricing is not stable at this stage. Remember the start of App Store pricing? It was premium for a while until a new business model emerged (F2P). I think VR is in a similar position. Devs need to charge a reasonable price in a small market.
However, interesting games are selling and becoming profitable; just look at Unseen Diplomacy, it recouped it’s dev cost in a day.”
Last month, Owlchemy Labs cut the price of its VR launch title Job Simulator by 25 per cent. Founder and CEO Alex Schwartz has told MCV that developers must ensure they are positioned to endure if they wish to survive until the VR gravy train finally arrives at the station.
The amount of hardware out in the wild is much smaller than at an initial console launch due to the fact that the VR hardware manufacturers have no precedent to draw upon and these units use custom hardware that’s never been mass produced,” he said.
Devs of early VR titles shouldn’t be expecting to make millions on their content, but instead should be thinking about the long game. The trick is to be able to sustain yourself as a VR company while the market grows in size.”
Sayans said CCP’s approach has been similar.
We’ve come into this with our eyes wide open,” she added. We know that the numbers will be small at launch, but we’re counting on a long tail here, and we’re in this for the long haul. Our method has been to invest rationally and intelligently. We have quite a few VR efforts in development, but none are massive investments that have to pay off in the short term. We’ve been focused on putting the company in a position that allows us to be wrong about our models, and maybe even some of our bets, without risking the company’s future.”