Sony’s strong VR sales surprise cautious execs
SAN MATEO, CALIF. — There are plent y of people who are skeptical about virtual reality, a technology some have heralded as the biggest thing to come along in years in games and entertainment.
E v e n A n d r e w H o u s e , global chief executive of Sony Interactive Entertainment, the video game division of the Japanese electronics giant, had doubts about how quickly virtual reality would be embraced by the mass market. So when Sony needed to decide how many of a new virtual reality headset to manufacture, House was among those inside the company advising that Sony make fewer of them.
“It’s the classic case in any organization — the guys who are on the front end in sales are getting very excited, very hyped up,” House said. “You have to temper that with other voices inside the company, myself among them, saying ‘Let’s just be a little bit careful.’”
It turns out House was too cautious. The headset, PlayStation VR, has been scarce in many stores, especially in Japan, since it went on sale in October. In an interview at his Silicon Valley office, House revealed PlayStation VR’s sales for the first time, saying consumers had purchased 915,000 of the headsets as of Feb. 19, roughly four months after it went on sale.
Sony’s internal goal was to sell 1 million of the headsets in its first six months, by mid-April. The company will almost certainly surpass that forecast.
“You literally have people lining up outside stores when they know stock is being repleni shed,” said House, describing the scene in Japan, one of the largest games markets.
House said the supply of PlayStation VR headsets will improve by April. By fall, Sony expects to begin selling them in Latin America.
The sales figure is a positive sign for virtual reality and probably establishes Sony as the leader in the premium side of the market — headsets connected to PCs and game consoles that provide more immersive experiences than are currently possible through inexpensive headsets that use smartphones for visuals.
Sony’s primary competitors, Oculus from Facebook and HTC, have not disclosed sales of their premium heads e t s . One re s e a rc h f i r m, SuperData Research, estimates there were 243,000 Oculus Rift headsets and 420,000 HTC Vive headsets sold by the end of last year.
In contrast, during its first three months on the market in 2007, Apple sold nearly 1.4 million iPhones; a feat now considered among the most successful technology products of all time.
The current generation of virtual realit y headsets arrived on the market last year with a flurry of hype. Demonstrations thrilled people throughout the industry — many have been waiting for virtual reality to jump out of the pages of science fiction. Facebook’s $2 billion acquisition of Oculus in 2014 set off a wave of investment.
In recent months, a more sober tone has descended over virtual reality. Oculus executives have sought to shift the conversation from first-year sales to the technology’s long-term potential. During a recent court appearance, Mark Zuckerberg, Facebook’s chief executive, said the company would probably need to invest more than $3 billion over a decade to reach an audience of hundreds of millions of people with virtual reality.
Among the other challenges facing the technology: high prices for virtual r e a l i t y e q u i p ment , l i mited high-qualit y content and thorny side effects like motion sickness.
Sony enjoyed advantages a s i t e nt e re d t he market because its headset is sold as an add-on to its game console, PlayStation 4, more than 53 million of which had been sold by the start of January. The headset sells for $400 — or $500 with a set of virtual reality hand controllers and a required camera — hundreds of dollars less than other premium products, which also require powerful PCs.
House said he would be “very happy” if the product ends up being purchased by a high single-digit percentage of all PlayStation 4 owners. For newer generations of headsets to reach a bigger audience, they will have to be lighter, cheaper and unencumbered by cables, analysts believe.
More creators of content will also have to step up their investments. Many virtual reality games are currently shorter experiences made by small, independent game studios. A number of large publishers are sitting on the sidelines until more headsets are sold.
One exception is Capcom, a Japanese game-maker that released a new installment in its popular horror series, “Resident Evil 7 Biohazard,” in January that is entirely playable in virtual reality. Since that game was released, the average amount of time PlayStation VR users spend playing in the headset has doubled, House said.
Masachika Kawata, series producer for the game, said in an email that “we’re really just getting started on what kind of experiences we can create for players.”
E a r l i e r t hi s ye a r a t i t s of f i c e s , Sony provided a demonstration of a new gunshaped device, the PlayStation VR Aim controller, that will allow players to more easily aim and shoot weapons within virtual realit y games. The controller and first game that uses it, a space adventure called Farpoint, will come out May 16.
While Oculus has made a big splash in the industry, Sony began officially working on its headset in 2011, before Oculus announced its efforts, said Richard Marks, a Sony research fellow. Marks said Sony did not anticipate the technology would get as much as attention as it has.
“We were expecting it to be a lot smaller than it has turned out to be,” he said.