Vir­tual re­al­ity is the star of the Con­sumer Elec­tron­ics Show. But there’s a catch

▶▶Some of the new head­sets have se­ri­ous hard­ware re­quire­ments ▶▶“We have to be re­al­is­tic about how strongly it will be adopted in the short term”

Bloomberg Businessweek (Asia) - - Contents - −Ian King

Vir­tual re­al­ity head­sets got star billing at this year’s Con­sumer Elec­tron­ics Show, which kicked off in Las Vegas on Jan. 6. The much an­tic­i­pated tech­nol­ogy is de­signed to cre­ate im­mer­sive, in­ter­ac­tive 3D en­vi­ron­ments for wear­ers. More than 40 com­pa­nies were on hand demon­strat­ing VR gear, in­clud­ing Vir­tuix, Sphero, and Face­book’s Ocu­lus VR. At last year’s CES, there were about two dozen.

Bar­ring de­lays, the Vegas trade show will be the last big pub­lic event where a bunch of head­sets com­pete for at­ten­tion in the same space be­fore Ocu­lus’s first re­tail model, the Ocu­lus Rift, be­gins ship­ping in April. HTC’s ri­val sys­tem, the Vive, is also at CES and due out in April. The only catch: Most peo­ple don’t yet have the pricey hard­ware needed to fully sup­port the head­sets, say Ocu­lus and chip­maker Nvidia. HTC didn’t re­spond to a re­quest for com­ment.

In ad­di­tion to other bells and whis­tles, Ocu­lus says, com­put­ers work­ing with the ma­jor VR head­sets ought to be equipped with Nvidia’s top-of-the­line graph­ics cards. The chip­maker es­ti­mates that only 13 mil­lion PCs in use around the world have the ul­tra­high-end graph­ics ca­pa­bil­i­ties re­quired by the more de­mand­ing VR hard­ware. That’s less than 1 per­cent of the 1.43 bil­lion ac­tive desk­tops and lap­tops.

On Jan. 6, Ocu­lus opened pre-or­ders for the Rift at $599. Sup­ple­men­tal costs for PCs ca­pa­ble of run­ning the soft­ware de­vel­oped for VR hard­ware could fur­ther com­pli­cate the buy­ing plans of would-be early adopters. “VR will be­come some­thing ev­ery­one wants be­fore it be­comes some­thing ev­ery­one can af­ford,” Ocu­lus founder Palmer Luckey tweeted on Dec. 24.

Ocu­lus rec­om­mends that Rift users have a com­puter with an Nvidia GeForce 970 or AMD Radeon 290 graph­ics card. Each card costs at least $300, al­most as much as Mi­crosoft’s Xbox One or Sony’s PlaySta­tion 4. (Sony says its PlaySta­tion VR head­set, slated for release in June, will work fine on a PS4.) Be­sides the graph­ics card, the Rift will also re­quire an In­tel i5-class pro­ces­sor, more than 8 gi­ga­bytes of mem­ory, and two USB 3.0 ports. Ba­si­cally, you’re look­ing at a $1,500 lap­top. The only sys­tem Ap­ple sells that meets the re­quire­ments is

more like $2,500. In re­cent PC demos of the Ocu­lus Rift and the Vive, the vis­ual fea­tures clearly needed high­end pro­cess­ing power. In Ever­est VR, cre­ated by Ice­landic de­vel­oper Sól­far Stu­dios, a vir­tual climb up Mt. Ever­est lets a head­set’s wearer cross a crevasse on a nar­row lad­der, inch­ing along as though really on the edge of a precipice. In The­BluVR, a vir­tual look at marine life cre­ated by WeVR in Venice Beach, Calif., users can stand on the deck of a sunken ship while duck­ing un­der the flip­per of a pass­ing blue whale.

With less for­mi­da­ble com­put­ing power, users may not be grounded in enough re­al­ity—and might hurl. Early VR pro­to­types caused many testers to suf­fer from mo­tion sick­ness be­cause of slight de­lays in the screen’s re­sponses to their move­ments. A stan­dard, non-VR PC game runs at 30 frames per sec­ond. To de­liver the fluid, nat­u­ral mo­tions that look “real” to hu­man brains, VR needs 90 frames per sec­ond on two video pro­jec­tions, one for each eye. “Im­mer­sive VR re­quires seven times the graph­ics pro­cess­ing power com­pared to tra­di­tional 3D ap­pli­ca­tions and games,” says Ja­son Paul, gen­eral man­ager of Nvidia’s VR busi­ness unit. “De­liv­er­ing VR is a com­plex chal­lenge.”

HTC and Face­book’s Ocu­lus are tar­get­ing gamers—those used to drop­ping a couple thou­sand bucks on gam­ing rigs ev­ery few years to play the lat­est PC ti­tles. Dur­ing a Novem­ber earn­ings call, Face­book Chief Ex­ec­u­tive Of­fi­cer Mark Zucker­berg said he doesn’t ex­pect VR to take off as an in­dus­try “un­til there are mil­lions of units out in the mar­ket.” But, he noted, al­most 250 mil­lion peo­ple have an Xbox, PlaySta­tion, or Nin­tendo’s Wii game con­sole.

“I think the tech­nol­ogy has sig­nif­i­cant po­ten­tial, but I also think we have to be re­al­is­tic about how strongly it will be adopted in the short term,” says Piers Hard­ing-Rolls, an an­a­lyst for re­searcher IHS. The Con­sumer Tech­nol­ogy As­so­ci­a­tion, which or­ga­nizes CES, es­ti­mates that VR makers will sell 1.2 mil­lion head­sets in 2016. That in­cludes lower-end set­ups such as the Sam­sung Gear VR—a plas­tic gog­gle at­tach­ment that re­quires a Galaxy smart­phone—and Google Card­board, a sim­i­lar at­tach­ment made of, well, card­board. Com­bined, the in­dus­try sold about 200,000 items in 2015 that could be con­sid­ered VR head­sets, CTA says.

So it may take a lit­tle while be­fore Face­book re­coups the $2 bil­lion it paid for Luckey’s com­pany in 2014. “The hype is some­what un­der­stand­able con­sid­er­ing the in­vest­ment some big tech­nol­ogy com­pa­nies are making in VR,” Hard­ing-Rolls says. Nvidia, hop­ing for a rev­enue bump, es­ti­mates that the num­ber of VR-ca­pa­ble PCs will rise to 100 mil­lion in five years. But, he says, “there is a lot of work that still needs to be done be­fore we have a main­stream prod­uct with broader ap­peal be­yond early-adopter gamers.”

The bot­tom line VR tech­nol­ogy is cen­ter stage at CES, but most peo­ple may not be able to use the hard­ware out­side a show­room any­time soon.

3D ad­ven­ture game Lucky’s Tale comes with Ocu­lus Rift

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