Bloomberg Businessweek (Europe)

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”

- −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.

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

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