For Oculus To Succeed, VR Needs To Succeed

Author

Daniel Terdiman

March 30, 2016

Competition in the video game world can be pretty cut-throat—they don’t call it the console war for nothing. Whenever a new generation of home video game machines emerges, it sometimes almost feels as though the manufacturers—behemoths like Microsoft, Sony, and Nintendo—delight in trying to eviscerate each other.

But at the moment, the virtual reality world is a bit different. With the first Oculus Rifts showing up on doorsteps today, four years after one of the most famous Kickstarter campaigns of all time, the consumer virtual reality era truly begins. But instead of mirroring the video game industry’s pitched battlefronts, VR hardware makers seem to know that, for now anyway, it’s in their mutual interest not to tear each other down.

“Everyone’s best interest right now is to grow the pie so VR becomes a widely adopted industry.”

“The attention Oculus brought to VR was great,” says Richard Marks, who heads up VR efforts for Sony. “The fact that there are multiple VR platforms all coming to market, that is really good for the timing of VR, because it does create more of a critical mass. It is challenging for any one platform to create a new medium.”

That’s a sentiment I hear again and again during conversations with leading VR community figures. What’s clear is that industry insiders believe consumer virtual reality needs to get off the ground before major players can start worrying about which company will “win” the medium.

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“This reminds me of the early days of the Internet,” says Anthony Batt, the cofounder and executive vice president of Wevr, a leading virtual reality content production company. “Everyone’s best interest right now is to grow the pie so VR becomes a widely adopted industry.”

“This reminds me of the early days of the Internet.”

Virtual reality, of course, is not a new technology, having been around in one extremely expensive form or another for decades. But with the arrival of the $599 Rift, HTC’s $799 Vive next month, and Sony’s $399 PlayStation VR in October, we’ve reached the point where deeply immersive, high-fidelity, high-quality VR experiences are actually arriving in people’s living rooms.

Although the Vive at launch will outpace the Rift by including a set of sensor-laden hand-held controllers that lets users see and incorporate their hands in 3-D VR games and other experiences, Oculus is expected to soon keep pace when it releases its Touch controllers later this year as a separate product.

Still, with those two devices’ launches, on top of Google’s $15 Cardboard VR player and Samsung’s $99 mobile Gear VR, which are already on the market, it’s fair to say the full spectrum of the consumer virtual reality age is now upon us.

Few Exclusives—Yet

The dawn of this age comes with big expectations. Analysts at Digi-Capital predicted last fall that VR would be a $30 billion industry by 2020, while Piper Jaffray pegged the value of VR content—everything from games to rich cinematic experiences, live events, real estate applications, surgical training tools, and more—at $5.4 billion by 2025. There are already hundreds of VR experiences available for platforms like the mid-range Gear VR—which is powered by Oculus software—and low-end Cardboard, but if one thing is clear at this moment in VR’s evolution, it’s that the industry will go nowhere if there isn’t a steady flow of great new content at every quality level, and at least some level of mutual support. Beating the other guy today isn’t the primary motivation.

“For so many people in this industry, VR has been this childhood dream of nerds and sci-fi fans, and of course, VR had a couple false starts in the past,” says Chris Dixon, a general partner at Andreessen Horowitz and an early investor in Oculus. “So most people think the biggest risk is that VR will not work, not be good enough, not gain wide adoption, and think only a secondary risk [is] that their competitors get a better position.”

Nick DiCarlo, the vice president and general manager of immersive products and virtual reality at Samsung, maker of the Gear VR, concurs. “Right now, the VR industry is much more focused [on] building awareness of VR as an idea,” DiCarlo says, “and how cool it is, rather than competing. The VR community really works together to build . . . momentum in the space.”

While it’s unclear if companies like Oculus (which Facebook bought for $2 billion in 2014), HTC, Sony, and Google are actually and actively cooperating with each other, many industry experts say their impression is that those companies are mostly playing nice with each other at this point. In the video game industry, one mark of the cut-throat attitude between competitors is their thirst to be the only platform on which big-name game titles are available—especially at launch. But with a few notable exceptions, such as Minecraft and Rock Band being available only for the Rift, or Gran Turismo launching solely on the PlayStation VR, that doesn’t appear to be happening much in the VR world.

“For Oculus to succeed, VR needs to succeed,” says Linc Gasking, the cofounder and CEO of 8i, a developer of VR production technology, “and everyone is in it together. You see that playing out more and more, where the big [hardware makers] are not asking for exclusivity on content yet, which really helps that process.”

“The success of VR floats all boats,” Gasking reasserts, pointing out that at this early stage, “VR is the platform, not any individual device.”

Chris Milk, the founder of the highly regarded VR content developer Vrse, which teamed with the New York Times and Google on the publication’s highly publicized distribution of more than a million Cardboard headsets to subscribers, agrees. “I’ve seen a lot of collective support from one another in the community,” Milk says. “I haven’t seen [platform makers] walling their gardens off. . . . We haven’t seen anyone saying ‘we want an exclusive on this for us, and you can’t do it for others.’”

When asked on Twitter about the possibility of Oculus or Sony having exclusive content, Oculus founder Palmer Luckey responded, “I am glad Sony invests in the VR ecosystem, and encourage others to do the same!”

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Another reason why VR companies haven’t been chasing exclusives as hard as they do on the traditional video game console front is that they are keenly aware that bad VR experiences on any platform or any device can turn people off to the entire technology forever. That’s especially troubling to executives if the person who has the bad VR experience is a decision-maker at a Hollywood studio or an ad agency. Those people, after all, are the ones who have the budgets to finance big VR projects, the very projects that will become a financial lifeblood for this nascent industry. All the virtual reality hardware makers need fantastic developers to create fantastic content for their devices.

That said, though consumer VR is still in its earliest stages and no one really knows how large the businesses being built around it will get, there’s no shortage of work for people developing VR content. “The thing now is that there’s more work than any of us can handle,” Milk argues. “We’ve had to learn how to say no, because in the last few years, we’ve gone from banging on doors and saying, ‘You should do something in VR, this is going to be really important,’ to everyone with a marketing budget banging on our door saying, ‘We need to do a virtual reality experience.’”

“The success of VR floats all boats.”

Gasking agrees that VR has reached the phase where people are desperate not to miss the boat, despite the fact that most of the consumer hardware is only just starting to come online. “We’re seeing all the increase in press create a surge of interest,” says Gasking. “We got a FOMO call from an ad executive concerned his clients were missing out on the VR wave and wondering how to start to buy advertising for his clients.”

There’s yet another reason why VR hardware makers may also be more flexible about exclusivity right now: They really need developers who produce games (such as Half-Life and Mortal Online) that are already wildly popular on non-VR platforms to create VR versions that can quickly draw customers to their devices. So, in some ways, VR hardware makers need established game developers more than established game developers need the hardware makers.

The Looming VR Console War

Make no mistake, however: Hardcore competition between the likes of Oculus, HTC, Sony, and others may already be bubbling beneath the surface.

One reason, says Jeffrey Greller, an agent at William Morris Endeavor who specializes in VR, is that because hardware like the Rift and the Vive is expensive—especially when many buyers will also have to purchase a gaming-quality PC to power their new gear—consumers are likely to pick one platform and stick with it.

“Once you’ve committed to a hardware platform in VR,” Greller says, “it’s going to be very difficult for another hardware brand to have you purchase their technology.”

That could very well end up being a problem on the higher end of the VR spectrum; devices like Samsung’s Gear VR, Google’s Cardboard, and others are substantially cheaper than the Vive and the Rift.

“If there’s any kind of competitive spark at this stage, it would have to be between Oculus and HTC.”

And, since the Rift and the Vive offer very similar features, that’s where the really heavy competition is likely to brew, posits Bruce Wooden, the head of developer and community relations at VR development company AltSpaceVR and the cofounder of conference and meetup organizer Silicon Valley Virtual Reality.

“If there’s any kind of competitive spark at this stage, it would have to be between Oculus and HTC,” Wooden said. “They have two high-end headsets that are generally targeting the same audience.”

Photo: Flickr user Maurizio Pesce

Still, while he notes that it’s “unavoidable” for there to be some level of competition in the VR industry, it’s not even close to the ferocity of the console wars. At least not yet.

In the meantime, today’s launch of the Rift and the imminent launches of the Vive and PlayStation VR can only be a good thing for the broader VR ecosystem, especially because each of those systems, along with lower-end platforms like Gear VR, Cardboard, and others, together meet the full range of people’s VR needs.

“Having multiple platforms in VR is good, especially at this early stage,” Sony’s Marks said. “Serving the customers of those platforms with VR in [each company's] unique way makes sense.”

So are all the big VR companies actually rooting for each other?

“I think they are,” Dixon said. “Obviously, Oculus and Valve and everyone want to be the leader. But I think everyone agrees that for the next few years, [the most important thing] is that everyone succeeds.”

(Neither Oculus, Google, nor HTC would comment for this story.)

Related: Will Virtual Reality Go Mainstream?

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This article was written by Daniel Terdiman from Fast Company and was legally licensed through the NewsCred publisher network.

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