During a recent media event, Valve revealed that only 30 VR apps have made over $250,000 so far on Steam. Now focusing his company heavily on VR development, Valve president Gabe Newell remains bullish on the future of VR, but isn’t shying away from sharing frank assessments of the still young industry.

Sorting content ‘by VR’ through the Steam store, the number of titles that support the technology comfortably exceeds 1,000. While a few early indie VR titles have seen a few million in revenue, according to Valve only 30 of Steam’s VR apps have made over $250,000.

This could be a fairly discouraging figure for aspiring VR developers, as Steam is surely the most popular source for PC VR content, considering the apparent sales advantage of the HTC Vive over the competition, combined with the fact that SteamVR works with other headsets like the Oculus Rift and OSVR. Yet, Valve president and co-founder Gabe Newell doesn’t sound disappointed.

Oculus on Platform-exclusive VR Content: 'it's the only viable way to jumpstart the market'

“We’re optimistic. We think VR is going great,” Newell told Polygon among others at a recent media briefing. “It’s going in a way that’s consistent with our expectations”. However, the forthright Newell-esque statement that followed—”We’re also pretty comfortable with the idea that it will turn out to be a complete failure”—set the tone for some very interesting and candid comments about where he believes VR stands right now.

Valve's Gabe Newell | Photo courtesy Kotaku
Valve’s Gabe Newell | Photo courtesy Kotaku

Offering some explanation for his wariness, Newell describes some of the drawbacks of the VR space, in particular that the high-end will continue to be where the most compelling stuff happens. High cost of entry is already a problem, but due to the tech advancements required in future VR hardware, it will continue to be, Newell believes.

“We’re at the beginning of this. Vive is the most expensive device on the market. It’s barely capable of doing a marginally adequate job of delivering a VR experience. We have to figure out all sorts of other problems before even the hardware question gets answered, much less what’s going to be the compelling content.”

In other words, it’s far too early to introduce major cost reductions as a solution; the hardware simply has to remain expensive in order advance to the point where VR becomes good enough to be an accepted, mainstream technology.

“If you took the existing VR systems and made them 80 percent cheaper, that’s still not a huge market. There’s still not a really incredibly compelling reason for people to spend 20 hours a day in VR”, Newell said. “Once you’ve got something that will really cause millions of people to be excited about VR, then you start worrying about cost reductions. […] Some people have got attention by going out and saying there’ll be millions of [VR unit sales] and we’re like, wow, I don’t think so. I can’t point to a single piece of content that would cause millions of people to justify changing their home computing.”

What VR Headset Makers (not analysts) Have Actually Said About Sales Expectations

Valve’s breakthrough SteamVR Tracking technology pushed the hardware beyond what many were expecting from a first generation VR package, and Newell’s statements clearly indicate that their hardware research continues unabated.

“We’re going to go from this weird position where VR right now is kind of low res, to being in a place where VR is higher res than just about anything else, with much higher refresh rates than you’re going to see on either desktops or phones. You’ll see the VR industry leapfrogging any other display technology. You’ll start to see that happening in 2018 and 2019 when you’ll be talking about incredibly high resolutions.”

But Valve remains a software company at heart, and their three full VR games in development promise to address the need for compelling content. Newell doesn’t provide any specific details about the projects, but quashes the idea of returning to gameplay that the studio became famous for.

“We got Half-Life 2 and Team Fortress running in VR. It was kind of a novelty, purely a development milestone. There was absolutely nothing compelling about them. Nobody’s going to buy a VR system so they can watch movies. You have to aspire and be optimistic that the unique characteristics of VR will cause you to discover a bunch of stuff that isn’t possible on any of the existing platforms.”

And optimistic developers are, Newell says.

“Developers are super excited. There’s nobody who works in VR saying, ‘oh I’m bored with this.’ Everybody comes back. For every idea they had in their first generation product, they have ten ideas now.”

Report: 39% of Game Developers Working on AR/VR Headsets
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The trial version of Microsoft’s Monster Truck Madness probably had something to do with it. And certainly the original Super Mario Kart and Gran Turismo. A car nut from an early age, Dominic was always drawn to racing games above all other genres. Now a seasoned driving simulation enthusiast, and former editor of Sim Racer magazine, Dominic has followed virtual reality developments with keen interest, as cockpit-based simulation is a perfect match for the technology. Conditions could hardly be more ideal, a scientist once said. Writing about simulators lead him to Road to VR, whose broad coverage of the industry revealed the bigger picture and limitless potential of the medium. Passionate about technology and a lifelong PC gamer, Dominic suffers from the ‘tweak for days’ PC gaming condition, where he plays the same section over and over at every possible combination of visual settings to find the right balance between fidelity and performance. Based within The Fens of Lincolnshire (it’s very flat), Dominic can sometimes be found marvelling at the real world’s ‘draw distance’, wishing virtual technologies would catch up.
  • user

    valve does everything they can to grow the ecosystem. after one media event tech writers can generate content for two weeks.

  • Brandon Smith

    I’m a graphic designer, but VR is the thing that made me finally crack down and say “I’m going to learn Unity”. I just want to be a part of this. The tech industry has been stagnant for many years now. There hasn’t been any real innovation since the iPad and tablet computing. VR is that next step. But where tablet computing was the obvious end to something, VR is the obvious beginning to something. There’s a lot of money to be made in the end of something and not a lot to be made in the beginning of something, I think. Milo Farsworth wasn’t sleeping in piles of money when he died.

    • Nadim Alam

      Thats exactly the same for me too (well apart from the fact that i am a programmer and not designer).
      VR was the reason that finally made me learn Unity too and start developing my first VR game. Im loving Unity so far. Really hope i get to finish the game soon and release it :D

      • rapparsven

        Hey, where did you guys start?
        Im a total Unity noob and also want to start basic working towards a VR-game!

        • Drunkula

          Udemy and Pluralsight are some excellent sources for video training. Ray Wenderlich recently released a Unity book by example that is really good. These will help you get the Unity 3D basics down to easily move into VR.

          A word of advice, Udemy has sales every couple of weeks. Create an account and wait out those $200 courses. They’ll email you coupons and special promos. They can drop as low to a $15 price tag. I never spent more than $35 for a course. Some of them were retailed at $300.

        • Nadim Alam

          I’ve been developing in other languages for many years now. So learning C# was very easy! However, I started with unity gaming tutorials from the unity website, after I then purchased a few courses from unity and have been going through those while at the same time designing my level within unity. I’ve spent now over a hundred hours on it so far in the past 1 month, and to be honest I’ve loved every bit of it even though now I don’t get any time to play games ☹️

    • Awesome bro, but lets be fair: the tech industry is far more broad than the “iPad and tablet computing”. Unless you were only referring to the tech industry within the context of graphic design, to say that it has been stagnant for many years is pretty ignorant.

      • Brandon Smith

        you’re right that perhaps the term “tech industry” is broad, but I’m talking about the “everyone comes back from CES talking about how lame it is” tech industry.

        Television manufacturers are trying to invent silly gimmicks like curved TVs and weird aspect ratios to get you to buy new devices. Cell phones can’t figure out whether they want to be smaller or bigger. There’s tons of gimmick tablet hybrid nonsense that nobody really wants. Digital cameras have reached the zenith, where every one is capable of shooting a full length feature film. It’s all the same thing and has been for years. Nothing is really interesting or exciting. Apple’s big announcement for new MacBooks left everyone sighing at how lame and uninspired it was.

        But VR, and AR, is really the new frontier that shakes all that up.

        • If you’re referring to the consumer industry, very true – we’re being smothered by marginal increments. Frontiers are being pushed in the periphery, its just harder to see past the consumer bubble.

  • OgreTactics

    First there’s the obvious: VR headsets are crap, why would people buy them at these price, even mobile, and then why would they extensively use them to justify a growing ecosystem of both developper and consumer. Oh and the completely unjustified prices of apps and games.

    But secondly there’s a huge chunk of responsibility we simply can’t blame on VR manufacturers neither developers: how relatively crappy and unbearably inefficient the 3D/Programmation tools are in 2017 compared to the accelerated and evolved expectations/demand.

    As much as we can appreciate Unreal or Unity going free-to-operate, and the many additions to their engine technologies, the completely growing mess of countless incomprehensible unoptimised options and tools to do simple things is barrier to entry of a whole generation that is already supposed to have adopted these tools and extended many folds the 3D/interactive/game market like Photoshop did for my generation. Except fuck C4D/3DSMax/Blender/Unity/Unreal…these tools are so fucking unusable that you have this situation in which the wealth of new developers are limited to either make complete visual crap, coded/crafting crap, or straight-up abandon, while the bigger studio and companies are stuck doing more and more redundant, uncreative, unstable apps and games because that’s only as far as you can go with these bloatware archaic interfaces.

    • wolf61

      EXCELLENT comment; I would be interested to hear more from you on this blogs or other industry-focused no-nonsense comment boards. My bet is on AR and I am trying to bring AR to enterprise solutions (OK, there are scores of others doing that). Your thoughts on that would be appreciated.

      • OgreTactics

        Hi, thanks. Well you know, any specialised/dedicated forum is full of mediocre kool-aid hypocrites (like those who defend the Wii U until it had to be declared officially dead, or those Apple fanboys…) so I had to check for sarcasm. And it seems you are serious as you have a construction opinion of your own in your other comments.

        First of all, ask your parents or grand-parent “Virtual Reality”, there are chances they’ll tell you “yeah, heard of it” because it’s been in popular culture for more than 40 years, was a reality 20 years ago already, and has now been advertised through all medias. Yet ask any VR professional, studio or amateur to define precisely “What is virtual reality and what does it do”, and you won’t get two of the same answer, let alone an accurate one, because there’s none.

        Palmer Luckey appeared out of nowhere with an amazing initial idea, and because VR was already something we somewhat knew about, everybody rushed excited towards a completely undefined non-sense. Nobody has taken the time to take a step-back, deconstruct, then rationalise what VR is and thus how it should be, and the result is we have these completely half-baked, profit-hungry, unpractical headset that everybody is wondering why they’re not selling.

        And of course people will try to rationalise the crystal clear failure of the current consumer headsets despite the numbers, with somewhat relevant arguments like price or lack of content, and completely non-sensical arguments like “it’ll take an unknown magical infinite time for it to somewhat magically get there”. And when I say non-sensical I mean these people have absolutely no education, groundings or basic concepts of very established consumer behaviour, marketing and analytics which of course dictate that there is only a limited amount of time for a new paradigm of product to pick-up before not only the interest completely wanes, and investor claim their ROI, which if not met will be immediately dubbed by medias as a failure.

        But the reason as I mentioned is very simple: there’s not one true Virtual Headset on the market. The fact that you can stay in VR space for more than a hour, that it takes a minute everytime to set a very uncomfortable strap around your head, that you’re stumbling in the real-world because you don’t see it, and can’t use your actual body and hands while immerged in the virtual, which when it’s the first thing even a fucking chimpazee tries to do, tells you about how non-sensical it is not to implement it). Truth is the industry is literally looking at VR backwards: instead of putting out there device that make sense like any successful devices like Smartphones, tablets, walkman, cellphones, calculators etc…they are been greedily and lazily and in fact barely building on Palmer Luckey’s initial concept, and didn’t iterate shit 3 years after.

        So instead of building around a clear conception of what a Virtual Headset should be, they’re selling unpractical, half-assed VR headset thinking that essential components are just “bonus” add-ons that they have time to implement and sell as incentives for newer products: like imagine if the first smartphones had to be constantly plugged with 4 cables, needed an external wireless mobile internet antenna to be connected, weren’t operated through their tactile screen but an external controller with button with smaller low resolution screen of which you see the led, light-bleed and black shadowy borders. This is exactly what we’re sold as “high-end” VR headsets.

        I’m sorry the rest of my reply got lost, fuck Disqus. I’ll try to edit and reply more thoroughly later.

        But, yes clearly “AR” is what is going to make Virtuality mainstream, it’s pretty much what computers were to consoles, and what apps were to the smartphone.

        What’s yours?

        • J.C.

          AR will be more useful for non-gaming, and significantly crappier for gaming. Will it be the tech that gets people using these headsets? Maybe. If AR headsets can allow complete replacement of your environment (like VR headsets), then AR will absolutely be the final form of VR.

          Unfortunately people still don’t even know what to DO with VR to make it compelling.

          • wolf61

            There is no doubt VR offers/will offer gamers (I hate buzzwords) ‘full immersion’. The question is: how likely are the parents (who will not only buy, but also cope with the addiction) to entertain their kids eloping in the ‘Inception’ game.

        • wolf61

          I am a parent of a grown up kid 8-)) so I lived through quite a few successful industry cycles and some failed attempts.

          For some reason (sales push I presume), the mainstream media fails to remind the 3D TV flop and convex TVs awkwardness (just try to sit in the ‘wrong’ side of the room).

          On the VR scene, Sony has in my view massive chances to capitalise on its following (100 million PS). Facebook has a billion active users with countless sheeple consumers who will fill the gaming rooms….until their parents will plug them off or they will end in an Inception game and on social benefits.

      • NooYawker

        AR and VR are two different things. I’m not sure if you’re punking Lucidider or just as crazy.

        • Get Schwifty!

          He’s certainly opinionated and considers himself an “expert” on the market, but I believe simply wrong, at least in terms of the ability of VR to take off in the market. The Gear alone makes the argument that there is a definite market for it (clumsy HMD and all). Unrealistic expectations on what the market can manage right now with cost and current hardware is the principle problem. It’s easy to sit back and say “well, the HMD should be .5 pounds, totally wireless, 4-K video with pure surround sound and oh it should be $79.00.” That isn’t reality. Are the tools not the greatest, is there confusion in the market, are devs stymied at times? Sure, reminds me of when the PC took off, same thing happens every time with a shift. All I know is, there is magic when I put on that HMD and pick up those controllers. Is it perfect? No, but it’s good enough for early adopter phase and is improving continuously.

          What I do agree with is that AR is probably the wider application but with Hololens batting what, 3K to 5K… and now a viable market one in 2019, what we have is what is current and “the market”, like it or not. Sony PSVR is doing well, if they can get their tracking sorted out, we have a reasonably good solution at the moment for mass market. We also have multiple companies investing and committed for more than a decade, which is not what we had before. Could it all fizzle as before? Unlikely, simply because engineering, medical, entertainment, etc. have bought in and realize “it’s time”.

          • NooYawker

            I agree, cost is an issue and we all have acknowledged that but let’s try to have realistic goals for pricing. Gamers pay, Nvidia and Razer proves this so VR is in a good position to get gamers to buy as long as there’s enough content.
            And it’s ridiculous to choose sides between AR and VR. Anyone who enjoys technology will welcome both.

          • TheVillasurfer

            Yes, not to mention the healthy amount of huge companies that are already involved in vr, plus how much easier it is to reach an audience today compared to 20 years ago. I think vr is around to stay, and I think ar will be it’s platform if required.

            This isn’t based at you at all but just to rant….A greater resolution would be fantastic, and it’ll come, but I think that a lot of people in this impatient age feel like every component of an hmd should already compare with the same type of component in other products. For example, it’s unfair to mark down a Rift or Vive because it’s resolution isn’t that of your PC monitor. It shouldn’t be! It’s not fair to compare the fact that these hmds are wired, with any other wireless, non-vr product. Just because we know that other electronic devices exist with higher spec in some areas, doesn’t mean we should expect any one device to deliver the best of all of these in one device. It can’t max out on everything.

            The Rift cost me so much, but I don’t regret it at all. I still can’t stop using it, 7 months later. It’s amazing AND it’ll only get better! I think those who were excited by vr 20 years ago find generation 1 more than enough to get along with for now. I’m sure that’s the same for most others who have used a Rift or Vive too.

        • wolf61

          I know; I am working on the HoloLens Enterprise for plug-ins to ERP suites (and I managed ERP projects for quite a while…).

          • NooYawker

            So what does it mean your bet is on AR? That’s like saying my bet is on the car over the motorcycle.

          • wolf61

            I like your comparison. AR would be the car and VR the motorcycle.

          • NooYawker

            No one is going to deny AR will have much wider applications while VR is mainly for entertainment. But your post still makes no sense.

    • yexi

      VR is actually in the “early-adopter” phase, not the real consumer phase.
      Of course, It move very, very fast… so we (developer) need to work 4x more to make the same work in VR but on computer screen.

      It explain why VR game are expensive (some game are just scam, I admit), because it’s hard… But i’ts not the fault of tool maker either, they try they best, it’s just because the technology move very fast, and it’s hard to everyone, including developer and tool makers, to follows.

      Leave 3 more years, and game and headset will be better and cheaper.

      • OgreTactics

        It was in the early-adopter phase 3 years ago when it was literally “early-adopted” DK1/2, it is and is supposed to be “consumer phase” not only because 3 years had passed but because that’s actually how all manufacturers geared it to sell.

        The problem is that people seem to think that world, the market and technology operate by magic: “there’s an infinite amount of time for VR to pick-up”, “it will be successful, somehow, at some random magically point”. But there are market rules and matrices which tells that if VR doesn’t pick-up by late 2018 at most, especially given all the investment, therefor time pressured for ROI, all the momentum and interest will have waned.

        Having developed 2 little experiences for VR I don’t believe in the “it’s hard” argument: it’s just a matter of understand how a little optimisation, scale and virtual camera work. But I don’t blame developper, not even the small indies making exceptionally ugly or goofy experiences with their own two hands, because it’s actually solely depend on the tools. Now while I relatively appreciate both Unreal and Unity, like most software or even dev tools they’re completely bloaty, messy, disconnected from the reality of the accelerating demand and current expectation. This is true of web and apps as well, but is especially true in 3D softwares, especially those horrible C4D/3dsMax/Modo etc…apps.

        • yexi

          You expect tools to be easy to learn and use, but this is not the propose of them. Professional programs are made to be powerful and fast to use when you master them.

          Learn 3D modeler like C4D or Blender and you well yells on the developers many time… but after some months, when you know how to use it correctly, it’s very quick and reliable.

          The problems is that making good VR game is a hard task, not because the tools are bad, not because it’s hard to add VR compatibility, but because you need to create new input method, new move systems, new almost everythink…

          If you want to make a standard side-scroller game on screen, you can buy some assets, take some time, use the pre-existing function that make camera and stuffs work, and you make a little side-scroller game pretty easily… if you want to make that in VR, you need to create complex code for the camera, add new interactability,…

          In any way, create VR compatibility and don’t make a VR game is easy, but for now VR developers need to work hard to find good way to move/teleport/shoot/interact, and create complexe function for that.

        • Get Schwifty!

          “But there are market rules and matrices which tells that if VR doesn’t pick-up by late 2018 at most, especially given all the investment, therefor time pressured for ROI, all the momentum and interest will have waned.”

          This of course directly in the face of comments by the much-hated Facebook/Oculus line which is they realize it’s going to take a decade or more for general adoption and are not expecting a “VR world by 2018”. Could they lie? Maybe, but a 2 billion dollar plus investment says otherwise….

          Personally, I don’t believe it, rules and matrices are nice but they aren’t reality frequently. Every time someone claims to predict the market, they are off to a degree, sometimes in very large ways. I believe VR is here to stay, and when its cousin AR hits the market, particularly the business world, things will go into overdrive as everyone sees the bigger potential for AR vs VR.

          • OgreTactics

            Well prospective is only scenarios. And if we simplify there is ultimately two: either it picks-up soon enough to justify sustained interest, therefor investment, then imperatively ROI and subsequently content creation, thus growing adoption…but it’s not all a won scenario.

            I don’t understand why people think, and are never capable of describing precisely why the VR market somehow has a magical limitless time-frame for ROI to justify investment contrary to every other single markets, and will somehow magically pick-up at “some point” for random reasons.

            But my point is, I actually believe VR will pick-up, or rather the elements for it are there, but these elements are nowhere to see in real-world products, and it is in fact the reason why “high-end” VR headset have sold miserable number (by any account, compared to any other product or new device launch), so my criticism is more of a reality-check on whether VR will be a thing for this cycle which I hope for, or if actually there is a huge lack in conception, rationality and incentive in the way VR headset are made and sold.

          • Get Schwifty!

            In this case we have a company who is not that concerned with immediate return on their investment, and is looking at the big picture years down the road. The West in particular is so locked into exceedingly short return cycles that if a company says its in for decades, we sort of ignore that but it does matter in this case.

            I don’t think the high-end VR headset has sold that poorly, they require a high-end system so its a linted market for gen 1 in the commercial space. Give it two cycles, see the costs drop and the need for a super PC relatively come down and more people will adopt. The main barrier is we no longer live in a PC-dominated world, but one where mobile is King. Thankfully at least laptops are at a point to support VR, and that is a start.

            I still say a console-style system (maybe PSVR) in time will be the key, one where any idiot can buy a setup for say $500 and go home and experience VR without all the setup that today’s PC-based systems have. However, to make it work, we need quality content…. and lots of it.

          • OgreTactics

            “The West in particular is so locked into exceedingly short return cycles” that’s all the fucking problem there. I don’t think Oculus or Vive pricing problem has anything to do with cost of the product therefor it’s specs limitation, but rather the sales ROI margin profit they wanted to juice out of these, as it costs no more than about 150$ per unit (even including marginal production costs) to yield.

            The problem, in line with my argument that current VR headset are crap by design or rather lack thereof, is that from Luckey’s initial idea of directing two lenses on a smartphone screen with an IMU sensors, it should have evolved towards the natural idea that VR immediately brought-up, hence why they bought Nimble-bit for hand-tracking (because when the first thing that even a chimpanzee tries to do in VR is grab things with it’s hands, it tells you that basic even if inaccurate hand-tracking is not an additional feature or enhancement but a compulsory part of what makes VR, like tactile screen for smartphones) and 13th Lab who had figured out stable environment tracking for AR.

            And yet 3 years after, these existing softwares and tech starting-points were scraped for the same initial unevolved prototype VR headset to be released as consumer versions, and people wonder why it didn’t sell: not the pricing, the proof being hundreds of millions people willing to rack-in 700-1000$ for a smartphone. In fact in today’s marketing paradigm, price is rarely an argument, simply if Oculus and Vive presented way better incentives and had way more practical meanings in the way they were conceived, people would see the point in paying even a 1000$ for VR headset; but the HMDs offered at this point, wether at that price or way lower, are simply nowhere near value proposition that makes sense for consumers to invest in.

            And this is the same for console: it was obvious that the PSVR would sell way more but again not for the price, rather for the fact that if VR HMDs are going to be this limited in their first consumer iteration, the value proposition works way better in the context of a big screen, family/friendly living-room with a standardised/optimised console than in the case of desktop PC on which you expect more. And this is a completely whole other debate but the difference between how PCs and consoles are conceived, is the reason why you actually have more notable or high-quality VR content on PSVR than the meagre Oculus catalogue or Steam loads of crapwares. But that’s another discussion.

        • VirtualRealityNation

          As a kid who grew up watching Lawn Mower Man. I bought a VR setup 11 years ago and the goggles cost 25k. the whole system cost me just under 75k. I work in the architecture profession and thought i would be early to market. I timed it bad. But just about every architecture firm i know is out there buying a Vive or a Oculus these days. The reason is simple. Costs have come down by a factor of 30-40 times. I am dealing with a lot of businesses that once turned away from VR because of the high costs are now embracing it because of the low costs.

          • OgreTactics

            “As a kid who grew up watching Lawn Mower Man” I stopped there, I that bullshit. I’m sorry I spent too much time around think-thank reps and ambassadors to take your “emotional/experiential argument” bullshit seriously.

            I don’t mean to be rude, you are involuntarily using a fallacious pernicious rationalising argument to justify denying economic and market science to say that somehow, “because goggles cost 25k “which is lie as far as my uncle bought me a 250$ Virtual Boy, VR is now successful because firm with billions of ad budget are intrigued into investing 500k budget in one market experience…

            This doesn’t mean shit. Did 3D TV take-off? Did Vivo take-off? Did Palm take-off? And yet they sold way more in their consumer adoption period than VR did 3 years after the original product. Note that’s I’m not saying it’s dead, but I’m saying there are risk VR fails for another cycle if we’re not pushing by being critical and expecting of what VR should actually be to be a practical device.

          • VirtualRealityNation

            I don’t disagree with the risk assessment, your correct in your argument. And for the record 10 years ago nvis s60 goggles cost 25k. You can look it up. I kind of wish it was a lie and I had not squandered 75k on VR too early. I bought the same goggles that they used at Lockheed, NASA , GM, and Walt Disney. But you missed my point. Businesses that can benefit from VR are now getting into it. And that’s because the risk of failing is an order of magnitude cheaper. My company sold more then 20 virtual reality unique experiences last year and that’s due in large part to the fact that the hardware costs are in the 1-2k range versus 60-80k range. With customers like Marriott Hotels, MGM Casinos, the US Navy, and Kellogg Brown, and Root, from where I’m standing it seems US companies see a real obvious technology solution that they feel is worth the risk. Of course, I’m more focused on selling to corporations then to gamers.

          • OgreTactics

            We have a similar job, but I analyse it differently: the reason why companies (mostly consumer, luxury and media brands) invest in VR is because they simply follow the noise of the momentum interest. Like everybody they’re impressed by their first experience, but then when I ask what they think of it, I realise they don’t really care and that’s not surprising: companies always and have always invested in new technologies that suscited interest, even failing ones.

            Rather I think it adds to the same pressure, as somewhat big edge investment in VR: the more there is attention and investment, the more and sooner people expect ROIs of sorts. And doubt is that if VR fails to deliver in a correct time-window given it has already passed the initial buzz, there will be an assessment and statement of wether VR will satisfyingly continue to grow to be soon adopted or that it is going nowhere for now. And the only way to ponder about these two scenarios is by actually looking at the very, and again there is no twisting rationalisation about it, miserable sales of “consumer headset” that barely sold more than the original prototypes, but most importantly why is that.

            And the reasons for me are that we are simply too far yet from an actual real product given how badly they were conceived by tricks of profit margin and therefor not implementing basic engineering design like a wireless beamer, external depth sensor or 3second put-n-look design. And if it doesn’t happen soon, knowing that once we have an actual true Virtual Headset it’ll then take some time for it to be adopted, iterated and more importantly used and developed for, then there will not be enough traction to justify sustaining a lagging new device market that people simply do not see the incentive of.

          • VirtualRealityNation

            I actually agree with your point regarding ROIs and needing significant engineering upgrades. I was making that point a decade ago regarding the upgrades. Truthfully, the upgrades haven’t been so much upgrades as they have been cost reduction in materials. My 75k VR setup did about 60-80% of what the Vive does now, and it had a much larger tracking area. It was however, about 100 times more expensive. That said, what my clients are telling me is that the current products (hardware/ custom apps) are a paradigm shift in terms of communication of spatial understanding and that can be translated to real world benefits that generate sales/ improve training comprehension/ saves time/ and can reduce waste. Some of this requires several cycles to really compare the benefits but maybe I’m just too optimistic. I can see your side and do realize that there are real risks that this wave of VR could go the way of the 3D TV and Palm. But if my customers are selling more because of VR, and they tell me that they are, I remain a eager proponent. I am also buoyed by the news that Microsoft is going to skip incremental upgrades on the Hololens for a generational upgrade. I think other companies might want to consider doing the same. But I’ve been telling my friends that Microsoft has a serious lead in the AR market. They definitely have some kinks to work out and need to make some significant design changes, but at some point down the road, they have some real potential to dominate that market.

  • Sam Illingworth

    The man speaks a lot of sense. He’s right that developers need to find what makes a really great VR game. I’m not sure there’s that much room for more huge innovation in the hardware though – isn’t it just incremental improvements we need now? Higher res, bigger fov, lighter weight and more comfort, more trackers over our bodies, wireless, etc.

    • NooYawker

      Right now it’s painfully obvious many indie studios are just trying to put something, anything on the market ahead of the big studios. Quality titles are lacking.

  • NooYawker

    There’s a high price of entry for VR so only the die hard early adopters own VR systems right now. Now that so many companies are licensing from Valve in the next few years we should see the market expanding rapidly.

    • Get Schwifty!

      It might even be that the ill-fated Steam machine with a VR spin might actually no now make sense….

      • NooYawker

        Now that is interesting. A complete VR system from steam.

  • Prices for the current generation hardware will drop as soon as the next generation launches, which will expand the market. As long as games stay backward and forward compatible, the industry will slowly grow. As much as everyone likes to pick on Oculus, they are actually going to play a major part in keeping VR on life support. Zuckerberg would never make statements that he is comfortable with VR failing since he has so much invested into it. Valve and Sony both could pull the plug on the whole thing and it would barely bother either one of them.

  • “There’s still not a really incredibly compelling reason for people to spend 20 hours a day in VR”

    The simplest path to convincing people of the need for VR headsets as part of daily life would be to significantly increase the resolution, optics (“god rays”/glare are not acceptable), and improve comfort/airflow such that using the headset as your primary desktop monitor would be practical (and either AR or front camera so you can peak at what you are doing with your hands). The horsepower required isn’t that significant, the ability to have a desktop configuration any size and ergonomic position you can think of is fantastic, and the cost can be significantly less than that of an equivalent physical rig.

  • Drunkula

    I got my VR headset last weekend and it blew my socks off, despite the godrays and screendoor effect. I am blown away at the potential and feel like VR today is where brick style cell phones were in the late 80’s.

    I am looking forward to the next few years as this technology emerges. It has fantastic potential for armchair travel, education, and games.

    • RFC_VR

      Totally agree. Got my Vive over Christmas, my last experience of VR was virtuality in the games arcade of 1991. The current Vive surpassed my expectations, and then some. It will only get better with further development…

  • wowgivemeabreak

    VR is game changing and I just hope that all these fine folks making games and programs will keep doing it and releasing quality content while the headsets mature and become more affordable for more people. It’ll be a shame if this tech dies before it really gets started as I am always blown away whenever I use my rift and think about the future of the tech.

  • The ecosystem will need time, it is normal

  • JustNiz

    Only 30 of the 1000 or so VR games on steam have made over 250k, and a few have made multiple millions. That clearly seems to be a strong indication of how much low quality crap there is on steam, not how weak the VR market is.

  • JMM21

    “There’s still not a really incredibly compelling reason for people to spend 20 hours a day in VR”, Newell said. Why would someone want to spend 20 hrs in VR? Does he think that is what we do in VR? Just sit and play around w/ no lives and that we don’t work or have families?

    Then you have him saying things like, “Vive is the most expensive device on the market. It’s barely capable of doing a marginally adequate job of delivering a VR experience.” Like that will bring ppl to spend $800+ and games w/ a statement like that. Its like he is shooting himself in the foot.

    And there will be a lot of ppl waiting for that better resolution w/ lighter headsets, wireless gear/accessories and better/longer/full games along w/ lower prices or requirements, to come out. So yeah, there will be ppl waiting a few yrs before they attempt VR and those that only want AR are out there too, waiting.

  • DaKangaroo

    “We’re at the beginning of this. Vive is the most expensive device on the market. It’s barely capable of doing a marginally adequate job of delivering a VR experience. We have to figure out all sorts of other problems before even the hardware question gets answered, much less what’s going to be the compelling content.”

    “If you took the existing VR systems and made them 80 percent cheaper, that’s still not a huge market. There’s still not a really incredibly compelling reason for people to spend 20 hours a day in VR”, Newell said. “Once you’ve got something that will really cause millions of people to be excited about VR, then you start worrying about cost reductions. […] Some people have got attention by going out and saying there’ll be millions of [VR unit sales] and we’re like, wow, I don’t think so. I can’t point to a single piece of content that would cause millions of people to justify changing their home computing.”

    All things considered, you have to admit, Newell just a very honest person, remarkably open and frank. It’s just not the kinda thing you expect from someone in the business world running such a large company. Really even you wouldn’t expect that much honesty from a kickstarter campaign, let alone a company banking lots of money on something which might fail in a world where perception is everything.

    That really just makes me respect Gabe even more. I really appreciate that kind of honesty.

    And he’s absolutely right. VR needs more legit reasons to use it. Useful productive software that isn’t a gimmicky recreation of desktop software, fun games that aren’t just lazy ports of existing game concepts that work just fine on a PC or console.

    Then again, before you can get people making that stuff for VR, you need people to own the hardware. Chicken and egg problem. Well, Valve and others have provided the egg, so now just waiting for the chickens to hatch.

  • Andrew McEvoy

    Well ( like Valve,Facebook,Bethesda etc ) Im in for the long haul as is I would say the vast majority of vr headset owners. We are only a few years into this for christs sakes. Mobile phones were around for years and remained exclusive to those who could afford it before they really took off mainstream. Thing is everyone who wanted a headset has already bought one, and there are plenty of others who are waiting for the next iteration with higher res/wider fov/no cable/cheaper price/ more AAA type games before they are willing to jump in, and the rest have gone for mobile headsets and/or PSVR, and there are others waiting for the cost of pc upgrades to reduce further. So the sales of headsets this gen is a bit of a red herring. Having said that there is still a slow but steady stream of people buying a headset thanks to established games like Elite Dangerous showcasing vr and people always banging on about how cool it is to their friends and randoms on social media and forums.

  • GamestormVR

    As developers of SteamHammerVR (currently in EA) we are not remotely disappointed by the growth, we simply set out to make the best VR game we can on a technology that is constantly evolving. Constructive criticism is welcome but the rest is water off a ducks back as our game changes in scale and quality on a weekly basis. Teams like us are the pioneers in the VR Wild West, its exciting and of course there will be money to be be made for those with the balls and the staying power to not quit.

  • mister san

    too expensive. pple already forked wads of cash for consoles and semi gud pcs
    folks arent about to pay $700+ and more for wireless adapters
    i think alot of people are waiting for price drop.