What happened to virtual reality? (FB, GOOG)
When Facebook bought Oculus VR in 2014 for $2 billion, CEO Mark Zuckerberg made a bold prediction.
"... at this point we feel we're in a position where we can start focusing on what platforms will come next to enable even more useful, entertaining and personal experiences," he said in a statement announcing the acquisition. He later added that "we believe this kind of immersive, augmented reality will become a part of daily life for billions of people."
Nearly three years later, Zuckerberg testified in a case against Oculus, subtly admitting that virtual reality hasn't taken off as quickly as he had anticipated.
Zuckerberg was right the second time.
Over the past year, evidence has stacked up that VR isn't as hot as everyone thought it'd be, and it feels poised to go the way of the smartwatch, a once-promising new computing platform that ultimately flopped once introduced into the real world.
The evidence is tough to ignore.
Following the launch of the Oculus Rift and HTC Vive, we have yet to see a breakthrough game or app. Plus, the cost is prohibitive for most people: The headsets start at $600, and go up from there if you want the motion controllers and other accessories. Plus you need a powerful computer to run the hardware, which will run you at least another $500.
Sony was supposed to be the savior of the high-end VR headset. Its new PlayStation VR is designed to work with the tens of millions of PlayStation 4 consoles already out in the wild, giving it an immediate advantage over the competition. But, like with Vive and Oculus Rift, there wasn't much enthusiasm around the games and content for the PlayStation VR.
Google appears to be stumbling too. It slashed the price of its new Daydream View headset this week to $49 following a report from Amir Efrati of The Information that Google is "disappointed" with early usage numbers for the device.
Meanwhile, overall sales of VR headsets are very low, and PlayStation VR appears to have performed well worse than expected, according to data compiled by market research firm SuperData.
Just a year ago, just ahead of major VR headset launches from Oculus, Sony, and HTC, it felt like we were about to jump into the next era of computing Zuckerberg described back in 2014. The possibilities seemed endless.
Today, the narrative has shifted. VR might be OK for gaming, but it's pretty clear it's only a first step to what really can be the next computing platform, augmented reality, or placing digital images on top of the real world either with a phone or headset. (Microsoft's HoloLens is the best example of this.)
Google and Facebook would tell you the same thing: We're in the early days of VR, and everything they're building today will inform their AR projects in the future.
But in the meantime, VR is going to remain a niche product at best.
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