Consumers to enjoy the Virtual Reality spoils of war

In a race to dominate the Virtual Reality landscape, Oculus has just announced it’s knocking a huge £200 off its Rift headset and Touch Controller bundle, now selling for £600 down from £740, and in turn leaving HTC looking like the overpriced competitor at £760.

Woman using VR

 

It’s good news for all those involved in developing VR, the barriers to consumer entry are slowly but surely coming down and therefore an increase in ownership is inevitable. This in turn means a larger pool to market to. Exciting times for the industry.

Whilst sales of premium VR headsets have been relatively sluggish to date (only 1.2 million Oculus, Playstation and HTC – Dec 2016), both Oculus, Playstation and HTC (amongst others) are banking on a predicted growth of 800% by 2021 (to 70 million units) (source CCS Insight). It’s predicted that during 2017 the premium VR headset market will be worth $1.5bn, but will extend to $9.1bn by 2021. That’s some growth.

Interestingly, to date HTC have so far dominated the market in terms of unit sales thanks to it’s connectivity to Steam, followed by Oculus. Therefore, it’s not surprising that with Zuckerberg’s amassed fortune he’s willing to sweep aside the hard-core trend setters by making short term sacrifices to appeal to the wider market.

But the true challenge for all three current key players (plus those imminently breaking into the market such as LG and Microsoft) is going to be to attract the developers to create content, which is arguably more important than achieving market dominance right now. This includes coders interested in building games, branded experiences, healthcare applications, property tours and way beyond. Both HTC and Oculus have worked exclusively with some of the biggest development houses, part funding development in an attempt to win over avid games fans – some of these games titles are: Superhot VR, The Climb and Dragon Front.

In terms of content and platforms, you could argue that HTC have the upper hand here as they teamed up with Steam, the well established (2003) mammoth gaming portal with over 125 million active users. This means the gaming market is already set for HTC, they just need to convince more gamers to invest in their hardware. Oculus on the other hand are arguably banking purely on Oculus sales, and driving new members to their Oculus Home platform – but it’s likely that Oculus will also be developing strategies to market to their 1.86 billion monthly Facebook users, which could be a real game changer for the brand.

So with a soon-to-be booming VR industry you can expect rapid technological (hardware, software and content) advancements. VR and AR will transform our lives in different ways, from altering the way we communicate to new efficiencies in healthcare to buying a new property to saving the planet from cyborgs, it’s here to stay.

Manufacturers aren’t done discounting yet though, it’s a race for global domination with a few new players entering the market and chancing their arm at success. It’s going to be a bitter battle over the next 2 years for sure involving hundreds of millions of pounds being spent on advertising by a number of brands, with the main winner being the manufacturer that can develop and sell premium hardware at a much more affordable price, whilst retaining access to the best content (games in particular) and without losing the quality of experience.

Should I buy a premium VR setup? We’re convinced this immediate price war isn’t over. HTC will likely match, if not make a more aggressive move to attract consumers through price or content. Expect further discounts from Oculus by the end of the year too.

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