SuperData's Joost van Dreunen on how Oculus, Valve, Sony, Microsoft and Google are taking on the market

Real-world strategies for virtual reality

The introduction of a new device or platform to a consumer market can be a wildly exciting moment. It shuffles the deck in terms of market leadership, presenting opportunity and challenge for all participants alike, and, ideally, fundamentally disrupts an industry to the point of true revolution.

It’s a fantastic dream, really, and the tangible memory of the introduction of the smartphone, for example, leaves us permanently curious for what comes next. One of the dreams about to come true is that of virtual reality.

With $2.6bn in investments made last year alone, an impressive host of giant companies have presented themselves to lead the world into the era of virtual reality.

The current market expectation is that by late 2016, the total install base for VR will be approximately 10.8m users; most of them PC-based (46 per cent), followed by console (28 per cent) and mobile (26 per cent).

In terms of content, games are expected to make up well over three-quarters of the available content. This is not surprising, as consumers of interactive entertainment have historically always pushed the boundaries for hardware capacity and processing power. The reasoning, of course, is that once gamer audiences successfully adopt VR, working out the kinks in the process, it will spread to the mainstream market.

But the companies that currently busy themselves to bring us this new experience each have a clear strategy in mind that rhymes with the goals and interests of the larger organisation. And looking more closely reveals several distinct design agendas.

Virtual reality’s vanguards

Oculus is arguably the device with the largest momentum behind it. While no price point has been set at the time of writing, the expectation is that the Rift will sell for around $350 and require another $1,200 or so for the necessary PC rig. In terms of content, there are currently around 370 VR applications available for the Oculus Rift.

In terms of content, games are expected to make up well over three-quarters of the available content.

During a recent press conference, however, it showed a rather bland array of consumer applications, clearly geared toward appealing to the widest range of audiences. In the absence of a clear killer app, it makes sense to target the whole market and this fits rather well with parent owner Facebook’s own strategy. Striking a deal with Xbox to make its game library available for the device is a clever way of ensuring appealing content at launch. And offering subsidies for devs suggests the company is trying to take the lead, although the $10m it is making available can’t possibly be enough to develop a true triple-A experience.

Sony, on the other hand, has been sparser with information on Project Morpheus. During its E3 press conference, VR played a minor part, suggesting it is interested but not strongly invested. Sony is a consumer electronics firm, which means Morpheus will be a closed platform and only work with a specific set of devices – i.e. PlayStation 4 – and certified software applications. This greatly narrows its addressable market and relegates VR to the realm of ancillary device.

Targeting the largest audience by making it as accessible as possible is Google, relying on people’s smartphones to deliver a VR experience. Consistent with its overall strategy, it seems to imagine VR as a way to boost the smartphone business, as its Cardboard 2.0 is compatible with bigger handsets and its accompanying SDK now supports iOS. Google has proven itself willing to take a chance and invest in technologies and platforms without having a clear sense of what its final outcome will be.

Valve, with its loyal following of dedicated, tech savvy gamers, is taking the approach of an intermediary. Similar to its Steam Machine, Valve’s version of VR will be geared toward putting the company in the position of a software distribution platform, allowing it to focus on optimising price points, resolving discovery issues and so on.

Finally, Microsoft arguably casts the widest net by blending VR with augmented reality. Consistent with its new course toward the Internet of Things and the emphasis on allowing consumers to play and experiment with software, its HoloLens offers a vision of the future where we overlay information onto the everyday and manipulate it.

But the challenge for content developers is this: which horse do you bet on?

Currently, it would seem that Oculus has the public’s attention and therefore the largest possible footprint. Given the distinct strategies formulated by the various aspiring platform holders, it is now up to the development community to breathe life into these machines.

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