Re­mem­ber vir­tual re­al­ity? Its buzz faded at CES 2019

The Sentinel-Record - - BUSINESS - MAE AN­DER­SON

NEW YORK — Just a few years ago, vir­tual re­al­ity was poised to take over the world. After decades of near misses, the rev­o­lu­tion fi­nally seemed im­mi­nent, with slick con­sumer head­sets about to hit the mar­ket and in­dus­tries from gam­ing and en­ter­tain­ment to so­cial me­dia ready to hop on the band­wagon.

But the buzz over VR has faded to a whis­per. At the CES 2019 tech show in Las Ve­gas, Face­book’s Ocu­lus unit wasn’t hold­ing any glitzy press events, just closed-door demos for its up­com­ing Ocu­lus Quest, a $399 un­teth­ered head­set due out in the spring. Other VR com­pa­nies were sim­i­larly sub­dued. HTC an­nounced two new head­sets — one with only sketchy de­tails — while Sony had some kiosks for its $300 PlaySta­tion VR set in the main hall.

It’s a world away from the scene a few years ago, when VR prod­ucts from Sam­sung, Ocu­lus, HTC and Sony seemed om­nipresent and un­stop­pable at CES. These days, VR is mostly a niche prod­uct for gam­ing and busi­ness train­ing, held back by ex­pen­sive, clunky head­sets, a paucity of in­ter­est­ing soft­ware and other tech­no­log­i­cal short­com­ings.

“VR hasn’t es­caped the early adopter, gamer-ori­ented seg­ment,” said For­rester an­a­lyst J.P. Gown­der — him­self an early adopter who chafed in

2016 at de­lays in ship­ping Face­book’s then-ground­break­ing Ocu­lus Rift sys­tem. Gown­der said many ex­ist­ing VR set­ups are still too hard to use; even sim­pler mo­bile sys­tems like Sam­sung’s Gear VR, he said, don’t of­fer “a clear rea­son for the av­er­age non-gamer to get in­volved.”

VR pro­po­nents are still dream­ing big, al­though the chal­lenges re­main for­mi­da­ble. Ship­ments of VR head­sets rose

8 per­cent in the third quar­ter com­pared to the pre­vi­ous year, to 1.9 mil­lion units, ac­cord­ing to data re­search firm In­ter­na­tional Data Corp. — an uptick that fol­lowed four con­sec­u­tive quar­ters of de­cline. Nearly a quar­ter of a mil­lion units of Face­book’s Ocu­lus Go and Xiaomi’s Mi VR — the same stand-alone VR head­set, sold un­der dif­fer­ent names in dif­fer­ent mar­kets — shipped world­wide in the quar­ter, IDC said.

Those still aren’t huge num­bers for a tech­nol­ogy that seemed to hold such prom­ise in 2012 when early de­mon­stra­tions of the Ocu­lus Rift wowed au­di­ences — so much that Face­book ac­quired Ocu­lus for $2 bil­lion two years later. De­spite large sums ploughed into the field by Face­book, Sony, Sam­sung, Mi­crosoft and Google, VR hasn’t yet made much of a dent in the real world.

Some of the big­gest con­sumer com­plaints in­volve ex­pense, laggy or glitchy graph­ics and the fact that many sys­tems still tether the head­sets to gam­ing con­soles or PCs. “Tech­nol­ogy is still what’s hold­ing VR back,” said eMar­keter an­a­lyst Vic­to­ria Petrock. Up­com­ing stand-alone head­sets like the Ocu­lus Quest could solve some of those prob­lems.

More alarm­ing, though, VR still suf­fers from a lack of hit soft­ware. Many ma­jor game pub­lish­ers have largely avoided the field so far, and ven­ture fund­ing for VR soft­ware de­vel­op­ment has nose­dived this year.

Su­perData, a dig­i­tal games and VR mar­ket re­search com­pany owned by Nielsen Hold­ings, es­ti­mates that con­sumer VR soft­ware in­vest­ments dropped by a stun­ning 59 per­cent in 2018, to $173 mil­lion from $420 mil­lion the year be­fore.

Soft­ware mak­ers are re­trench­ing. IMAX said in late De­cem­ber it was shut­ting down its VR unit. Jaunt, a startup fo­cused on cine­matic VR and once backed by Dis­ney, re­struc­tured this year. Its new fo­cus? VR’s cousin tech­nol­ogy, “aug­mented re­al­ity,” which paints con­sumer-sim­u­lated ob­jects into the real world, a la the car­toony mon­sters of “Poke­mon Go.”

A few games have been mod­est hits. “Beat Saber,” a VR game in which play­ers move a lightsaber to mu­sic, sold over 100,000 copies in its first month and be­came the sev­enth high­est-rated game on Steam, ac­cord­ing to Forbes. But such ti­tles are few and far be­tween.

There’s one other prob­lem: VR isn’t very so­cial, Petrock said. There’s no easy way to share the ex­pe­ri­ence with oth­ers on so­cial me­dia or within the games them­selves, mak­ing a VR ex­pe­ri­ence less likely to go vi­ral the way, say, “Fort­nite” has. “You have your head­set strapped on and you’re in a vir­tual world but it is soli­tary,” she said.

VR “is still is the next big thing, but any­thing good takes time and ef­fort,” said Gart­ner an­a­lyst Tuong Nguyen. “The in­dus­try as a whole did over­hype it.”

He com­pares the cur­rent VR in­dus­try to the TV in­dus­try when HDTV first came out. Peo­ple bought new high-def­i­ni­tion sets but were dis­ap­pointed when there wasn’t any­thing to watch in the new for­mat. For VR, “the kind of breadth and depth of con­tent isn’t all quite there,” he said.

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