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VR continues to be the Rodney Dangerfield of tech: Can’t get no respect. Some in the generalist tech press and broader culture have even pronounced it dead. And most VR industry folks admit that it hasn’t lived up to its potential, and wish it could gain more mainstream embrace.
VR partly has itself to blame for this. Whether or not it failed, it has fallen short of revolutionary proclamations made in its circa-2017 hype cycle. By hyping it so superlatively, VR proponents set a high bar and a narrow set of possibilities: blow everyone’s minds or disappoint. So here we are.
But the effects of that hubris aside (more on that in a bit), the fact is that VR isn’t doing that bad. There are currently some dips in sales performance – such as PSVR 2’s declines this year, and Quest 3’s slowdown after a breakout Q4. But cumulatively, there are strong demand signals.
Among those signals are Meta’s 20 million+ lifetime units sold, and an aggregate VR installed base of around 31 million according to our research arm, ARtillery Intelligence. Also consider Gorilla Tag’s recent one-million daily active user milestone. These aren’t signs of a dying industry.
Relative Success
All the above has been bouncing around our heads and editorial meetings for a few years. But it recently floated to the surface during AWE USA 2024. From the AWE stage in Long Beach, Palmer Luckey echoed much of the above, adding other factors like underlying VR evolution.
For example, the Oculus DK2 – widely recognized as the first big inflection in capability in the current era – was released 10 years ago at 349 grams. Today, we have hardware like Bigscreen Beyond that weighs less than a third of that (100 grams) and packs in 20x the number of pixels.
To further put VR’s relative success into perspective, Luckey compares it to other product classes. The N64 for example, sold about 30 million lifetime units – fewer than VR cumulatively – and that was a cultural icon. A similar ~30 million was achieved in the first two years of iPhone sales.
Speaking of the iPhone, time and mobile hardware have shifted our perspective of success. The biggest culprit of course is the smartphone, which reframed the definition of ubiquity to mean 3 billion units – about half the world’s population. Almost everything looks small next to that…
“VR has actually come a really long way,” said Luckey from the AWE main stage. “It’s just that people’s expectations of what success is has inflated. Can you imagine if you told people that 20 million people are going to buy a VR headset and the media is going to consider that a failure?”
PR and VR
Back to VR proponents’ arguable missteps in overhyping it, that hangs over everything said above and invites another factor: schadenfreude. VR’s failure to reach the heights it promised doesn’t get any sympathy points after its overblown proclamations rubbed people the wrong way.
The same can be said for any reputed tech revolution when evangelists get a little overzealous. It can be seen today for instance in the sly sense of satisfaction some take in the downfall of NFTs or metaverse land investing. Talking a big game is a bad look when you then nosedive.
The lesson is more about PR than VR, but we’ll continue to see the same mistake in hype cycles to come. The good news is that VR development continues in quieter and more sober ways. It’s not the media darling it once was, but does that really matter if it’s healthy and moving forward?
As for where it ends up, there are many products that don’t reach iPhone scale but are successful – think AV receivers and DSLRs. Of course, everything is relative, so consider VR’s traction relative to its humble beginnings rather than the not-so-humble expectations it didn’t live up to.
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