Virtual Reality – Stalled at the start.

Microsoft and Sony go in different directions.

• Microsoft will not be pushing VR in its next-generation console in contrast to Sony which is likely to build on the relative success that it had with PSVR on PS4.
• For once both of these strategies make sense and relate to their specific circumstances.
  • Microsoft: has had no presence in VR and did not launch a product when the craze hit a few years ago.
  • Microsoft’s position then was that technology is not really ready and so it thought that it would not really take off.
  • I fully agreed with that view and, to be frank, not much has changed in the last few years.
  • Hence, I do not think that the next generation of consoles needs to push VR in order to be successful.
  • Furthermore, Microsoft is pushing AR much harder than VR and in this area, it is one of the lead contenders with HoloLens.
  • Sony: has fared the best of all the VR plays that launched a product.
  • This was not because its product was particularly better than anyone else’s but because it was marketed to the most likely purchasers of the product (gamers) who already owned most of the required hardware (PS4).
  • Hence, Sony could bring a competitive product at a low price targeted at a dedicated installed base.
  • This led to PSVR comfortably outselling all of its rivals albeit at far lower levels than predicted by the bulls of the technology.
  • Hence, it makes complete sense for Sony to continue to develop this line has it has established a foot in the door and is in pole position to lead the race when it eventually begins.
• This race remains stalled at the start as the user experience and use case for VR are not ready to make it beyond a few small niches.
• The limitations remain
  • Price: Many of the devices cost several hundreds of dollars and also require a PC to run, further increasing the cost.
  • To be fair, some offerings do address this issue but generally do so at the expense of performance and user experience.
  • Clunky: VR units are still large, clunky and uncomfortable to wear.
  • In many cases they also make the user feel foolish when wearing one.
  • Comfort and security: VR cuts the user off from almost all sensory inputs from his immediate environment, severely limiting the situations in which the user would feel comfortable using one.
  • Many units also cause feelings of nausea due to an imperfect replication of the real world compared to what the brain is expecting.
• Once these limitations can be addressed either by technological improvement or ingenious use cases, then there will be a market.
• Until then volumes are going to small and interest relatively low.
• Microsoft is right for now.