Why VR Is Failing

s a market, we seem to have trouble learning that three key elements are necessary for a

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new technology to take hold: It has to appear complete, it has to be compelling, and it has to seem like a value (be affordable). Compared to what we have today, the car that opened up the automotive market in the U.S. was none of those things -- yet it was incredibly successful. So, this is about perception, which is why the iPod -- which also was none of those things initially, if compared to the iPhone or iPad of today -- also was incredibly successful. The difference comes down to expectations and marketing, and like quadrophonic sound, 3D and video disks, VR doesn't yet have the right stuff. I'll explain and then close with my product of the week: something that can make your older car smarter and maybe help keep your driving kid out of trouble. The Completeness Test Any of us who saw Star Trek: The Next Generation or the more practical -- from a virtual reality perspective -- Assassin's Creed, know what a complete VR product experience should be. It should feel like you are actually in the virtual world and not in some form of performance art for your laughing friends. The gap between where expectations have been set for VR, thanks to the movies, and where the technology currently is appears to be massive. This means one of two things needs to be done: The technology either has to advance massively, or expectations have to be reset. These two things aren't mutually exclusive. In the short term, I think what is needed is to focus on what VR does best -- and that is play scripted content (movies), as well as seated, static games. Where VR gets into trouble is in RPGs (role-playing games) and FPSes (first-person shooters). This is because when VR demands movement from the player, it gets not only less realistic but also dangerous. You can lose your balance, trip over the tether, or have accidents with things in the room where you're playing that you can't see with the goggles on. None of this is fun, even though it can be entertaining for anyone watching you. To get even this limited range of games to work realistically, developers need to improve the controllers, which largely don't feel like or physically compare to what a user is viewing in the headset. For example, they don't have the weight and heft of guns for a (static) arcade shooter, and they don't simulate the controls you otherwise might be able to get for a driving or flying game. Further, using a simulator to add physical motion is expensive, and the motion may not sync with your preferred title. This is all do to a lack of focus. Rather than trying to get a few things right, like Steve Jobs did with the iPod or Henry Ford did with the Model T, folks are all over the map with regard to what they want to do with these headsets. That has resulted in a lack of critical mass in both titles and controllers to make the technology sing. Fixing this issue wouldn't address the entire problem, because expectations are in the stratosphere. Someone needs to be willing to market this technology as compelling for what it does, so we can reset expectations to something more reasonable than the holodeck. Since no one is making much money, though, no one wants to spend much on the related marketing. So, the solution appears incomplete and may continue to appear incomplete to buyers, both in title breadth and experience quality. Is It Compelling? Making something new compelling is all about marketing. The idea of having all your music in your pocket was enough to push the iPod through what was a very difficult three-year start, but when it exited that three-year ramp, it transformed Apple and the consumer electronics industry. VR needs a well-funded marketing campaign, but companies that typically are willing to carry the burden of market maker are few and far between, largely because everyone and their brother then slipstreams the effort. For instance, Apple was the market maker for the screen smartphone, but Google, which expended a tiny fraction of Apple's budget, now has more market share. That is in part because the money it saved in not building the market helped it give away its iOS competitor for free. (To this day, I don't know how Google got away with what clearly was predatory pricing.) Apple is rumored to have a VR effort coming but the ability for a challenger to avoid that expense -- and by doing so, steal the market -- is a solid argument for not being the market maker. Sony is trying to be a market maker, but its console approach is expensive for an attachment, and there has been no gaming title to make the VR attachment a must-have. Plus, Sony just doesn't seem to have either the will to innovate or the budget it once had for the PlayStation. Without a market maker, folks aren't likely to lust after a VR headset -- and without enough headsets, you can't fund title creation or the accessories you need to move the offering forward. The Value Proposition When the HTC and Oculus headsets hit the market, they cost around a grand. That's a lot, given that you also needed a gaming machine that cost twice as much. Three grand is a lot to pay for a technology that isn't yet complete or compelling, and sales have reflected this problem. However, we are about to be up to our eyeballs in US$350 headsets, thanks largely to Microsoft. Also, there are number of folks creating backpack PCs with VR chops, which are affordable largely due to AMD's efforts to make dramatic reductions in the price of the graphics cards needed to carry this off. When you start with something costing $3K and quickly drop the solution below $1K, you have the opportunity to create the perception of a very strong value -- but someone still has to deliver that message, taking us back to the problem of not really having a strong market maker yet. Wrapping Up: Microsoft Microsoft is about to launch an effort to become the market maker for VR with the coming release of a massive number of affordable headsets -- and, I expect, a decent amount of new (and we'll hope compelling) new content. Perhaps Microsoft will do a better job with the controller problem than we have seen so far, but if they don't, the market for VR is likely to remain tepid until someone with the resources and capabilities of Steve Jobs' Apple steps in and checks all the boxes. Sadly, the tech segment often is defined by companies that view a list of requirements as multiple choice rather than all of the above. If that is the case with VR, then it will go the way of 3D -- but it still has the potential to become transformative. We'll see. Rob Enderle's Product of the Week Unless you drive a Tesla, it's likely that your car is not truly connected. Granted, given the problem that Chrysler had with its connected technology, that actually might be a good thing. However, it limits what you can do with your car in terms of automated help, locating the damn thing, and tracking whoever is driving it. Automatic Pro may help. I had the last edition of this product in two cars, but it required a connection to my smartphone, which often isn't ideal and doesn't help you much if you misplaced the thing, or your smartphone is broken or its battery is dead. Automatic Pro Adapter Automatic Pro Adapter The big change with this new Automatic Pro product is that it has built in 3G connectivity so it can phone home as long as it can see a 3G connection. This last is, of course, a caution, because one of the features is its ability to call for help automatically if you are in an accident -- but if it can't get a signal or it loses power, that clearly won't work. You can use this to track your kid's driving, because it doesn't need to connect to the phone. It will report some of the bad behaviors I engaged in as a kid, but texting and drinking and driving aren't yet within its capabilities. Still, for a lot of us who travel, the ability to locate the car in a huge airport parking lot alone may make this thing worthwhile. For those of us who have older non-connected cars and want to get a taste of the Tesla experience -- though it is just a taste -- Automatic's Pro Gold (AUT-350c) solution is provides it, and it's my product of the week. (At $129, it is a ton cheaper than a new car.)