Visions from the Future: Could VR send the games industry backwards?

Traveling on the subway the other day, I happened upon one of those rare early tech adopters who just doesn’t care. Sitting in a packed train, here was a fellow immersed in his virtual reality headset surrounded by people who took turns glancing at him with varying degrees of disgust and curiosity.

Whenever a new technology first hits the market, it is a particular subset of society that takes it out into public, making it the first touchpoint for many others. This group of consumers are generally known as ‘early adopters’ because of their willingness to try out a new gizmo – often despite obvious flaws.

For virtual reality, this is currently the most important group of consumers. These are the evangelists.

Oculus joined HTC in setting a relatively high price point, thereby largely eliminating the more mainstream customer base. Their reasoning, of course, is to test the new devices out on this tech-savvy crowd, and to ultimately arrive at a value proposition that appeals to a broader audience. But is this group the first sign of things to come, or a statistical outlier?

The current stage of the VR business is not for the faint of heart. We’ve had to downgrade our forecasts twice this year already. This is largely because the major contenders in the VR market have set unusually high expectations of their technology, hoping it would align with consumer demand. 

What we’ve seen so far, unfortunately, is a host of issues emerging in this nascent market. A bunch of pre-orders got lost in the mix, manufacturer delivery schedules have encountered delays and Oculus triumphantly announced the availability of its Rift at retail, even before it had managed to ship the many pre-ordered units for which consumers have already paid. 

But these are companies that are investing billions, so it is fair to expect them to resolve these initial issues over time, becoming more efficient in coming to market and lowering the average selling price of a VR unit. No doubt, they’ll eventually figure out a way to make the technology more accessible for an average consumer.

"The games industry is creating a multiplayer ecosystem beyond the couch. Yet VR is going in the exact opposite direction."

What will be much more difficult to change is the social perception of VR.

After hearing for years how technology and the internet will connect us all, VR’s current iteration presents an isolated experience. This is light years away from Nintendo’s messaging around the Wii, inviting everyone to play.

It is also far removed from the extensive advertising done by games like Clash of Clans, League of Legends and Hearthstone that emphasise gameplay with others.

The games industry at large is creating a multiplayer ecosystem beyond the couch. Yet here we see the first iteration of VR technology going in the exact opposite direction.

Worse, demographically the first group to indulge themselves in VR technology is rather homogenous.

For years, the games industry has been criticised for its focus on an 18 to 34-year-old male demographic. Here we see it again.

It makes sense to target a tried-and-true audience to offset the risk associated with a new effort. But to truly become a mainstream technology, it has to rise above demographic boundaries. Both the devices and the content run a risk of being appealing mostly to a single subset of society.

Joost van Dreunen is co-founder and CEO of SuperData Research

Article originally published in the June 2016 issue of Develop.