With much of the optimism around VR now beginning to fade, the news from Canalys that shipments are breaking records will come as a bright patch for the market. The company said that recent price cuts from all the major VR headset manufacturers have helped to stir interest in the segment ahead of the busy holiday season.
Sony is leading the bulk of the sales, shipping over 490,000 PlayStation VR units in the third quarter. The system has proved particularly popular in Japan which is emerging as a leading consumer of VR entertainment. Sony has over 80 percent market share in the country and is succeeding in convincing existing PlayStation owners to purchase its VR headset as an addon.
Finding customers
Although the sales increase is a needed reprieve for the industry, consumer VR still faces significant challenges. Gamers and mainstream users are yet to be convinced they need a VR headset, a problem manufacturers have been unable to address.
The experience of using a headset is difficult to advertise, making it hard for VR firms to find new customers. Outside of small communities of established VR users, interest and awareness remains low.
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Canalys noted that the price drops are helping but there’s still further work to do. Singling out Oculus’ strategy as an example, the company noted first-time users are likely to be impressed but finding them is a continuing struggle.
“VR adoption in the consumer segment is highly dependent on price, and Oculus’ strategy of lowering prices has definitely helped drive adoption,” said Canalys Research Analyst Vincent Thielke. “The [$199] Go will excite first-time users, but driving adoption beyond social media will be a challenge.”
Slow adoption
The sales increase is good news for the industry but is coming too late for some early adopters. Major game studios are already scaling back or withdrawing from their VR projects, citing a lack of interest as the reason. VR’s also failed to make a major impact in filmmaking, leading Nokia to cancel its $30,000 OZO VR camera earlier this year. Predictions of VR sales made a few years ago have fallen flat as consumer entertainment remains led by on-screen media.
2018 could prove to be a critical year for virtual reality as all the major ecosystems get established. Oculus and HTC are vying for desktop users and professionals while Sony will consolidate its market lead in gaming. Microsoft’s also promoting its new Windows Mixed Reality platform aimed at general PC users in the home and the workplace. The increased availability of VR headsets should help to raise interest as more companies invest in their own devices.
