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1. 

   Neil —

   First, I think being conservative with numbers is a good idea for some kinds of business planning. But, in other areas, it might lead people to ignore the potential of these new markets, and miss giant business opportunities — as what happened to many tech companies in the mobile space.

   Second, I think you’re focusing on virtual reality as meaning “high-end gaming” to the exclusion of everything else. But recent user surveys — and sales in places like China — show that media consumption is just as big a draw. And it takes a LOT less processing power to watch a movie on a virtual screen. For that, most late-model smartphones work just well. Yes, there’s more lag. And they don’t really support a lot of interactivity, or complex games, or multi-user environments.

   But the mobile-based headsets are good enough for virtual reality documentaries, watching fun little GoPro videos, private movie theaters, and casual games — as well as for a million marketing projects such as VR movie previews, real estate walk-throughs, virtual campus tours, and automobile test drives.

   As of mid-fall, Google was estimating 16 million downloads of their Google Cardboard app. Not everyone with a VR headset downloads these — many Chinese headset manufacturers have their own apps, instead. And there are estimates coming out of China of 300,000 headsets being sold A MONTH. Also in October, Russian app developer Fibrum told me their VR Roller Coaster app was downloaded 4 million times — so this is a pretty good count of people who didn’t just get a cardboard headset in their newspaper or cereal box and immediately toss it, but went as far as to search for apps in the app stores and start playing around with them.

   So that was before the New York Times give-away, and before the holiday sales.

   I think it’s totally reasonable to estimate 20 million Google Cardboard-compatible headsets shipped last year.

   No, they’re nowhere near as good as the HTC Vive. But they’re still fun and very usable, and totally disposable. With prices ranging from $5 to $99, people can easily pick one up, then trade up as better ones come along. Or — since most of these are dumb headsets — keep the headset and upgrade the phone.

   1. 

      Hi Maria,

      Thank you for your input. Please understand that I am very enthusiastic and excited about VR and immersive tech on all platforms – immersive tech has been my career for several years. The performance requirements have been set by the VR hardware makers and I’m just spelling out the ramifications. This is why the article was divided according to platform (PC, console, mobile platform 1, mobile platform 2) and their related projections. Also remember that this is an analysis for the first year; not the entire life cycle of the products.

      The enthusiast GPU sales counts aren’t limited to video games. These are all the applicable GPU sales counts at an international level. Professional use, consumer use – it doesn’t matter. The waning Moore’s law mixed with demand and limited supply is our industry’s law of physics. Whether I’m a hundred thousand off or a million off doesn’t matter. It will take five years for the PC platform to deliver mass market VR with expected deliverables, and it will take up to ten years for mobile to do the same thing at a similar visual level – give or take a couple of years.

      The point about Cardboard being good enough despite lag or getting away with casual games and movie theater experiences is actually part of the problem. When we’re at the point that quality takes second fiddle to numbers and everyone is A-OK with that, then we’re running the risk of being a gimmick and our market is doomed before it has even begun. It’s only ok if the goal is to do even better. This should by no stretch of the imagination be the status quot.

      I agree that 360 content is the lowest hanging fruit right now for the reasons you’ve described. It’s cheap to produce, it has few processing requirements at the receiving end, and if the technology makers could get a solid distortion-free stereoscopic 360 rig working with positional tracking, some real experiences could be shared and appreciated. I’m hoping we’ll get there soon.

      I got my numbers from actual GPU sales statistics and grew them from there. While nothing is perfect, a lot of investment and jobs are on the line – including my own – so the figures have to be based on something. If the market is dependent on wild fire front-loaded sales within the first six months, this industry isn’t going to last very long. Anyone who is in this market for real needs to be playing the long game.

      While the shared figures are encouraging, they only tell part of the story. If we look at the online communities, they haven’t really grown that much. The biggest Reddit VR community has under 60,000 subscribers, and that’s probably filled with duplicates and sextuplets and they haven’t significantly grown in months. Show me a community of 4+ million people talking about VR on Cardboard, and the numbers will hold more water. If we added the membership of every VR Meetup together, the numbers wouldn’t add up to those download figures. With time, I’m confident the numbers will add up the way we like.

      Just because people download an app – and lord knows we’ve all done it – doesn’t mean people are actively using the product or even wearing the HMD with the software. While it helps that newspapers are attaching the device to their publications and getting it out there through controlled circulation, it’s not a real attach rate or representative of people using the product. Again, we’ll get there; it’s not an overnight thing.

      Ever since this article was printed, there have been a slew of articles talking about the five year mark, several prominent Tweets from people working in the industry saying the same thing in different ways, and colleagues who have expressed relief that the messaging is out there because the unrealistic expectations would have crushed the market otherwise. This is all very realistic.

      It took ten years before HDTV was available on a mass market scale, and even now, few cable broadcasters send 1080P signals (they do 1080i or half resolution of what HDTVs can really do). Despite these 1080i signals, the industry has already moved on to 4K televisions for under $1,000. I assure you that everyone including customers were excited about flat HDTV panels from day one, and despite the demand, things had to take time and they still do.

      If we stick to our roots, what really got everyone excited about VR are those dynamic digital experiences for entertainment and professional use. That’s the expectation that was set and that’s what has primarily driven this VR firestorm. As we can’t break the laws of physics, the next best thing is to understand and build around them. Five years is completely normal for any industry that takes itself seriously. It’s actually abnormal to require that it take months instead of years. I think those are called fads – and I think we all want something much better and long term for consumer and industry alike.

      VR businesses will survive and build at each stage provided they design accordingly. If the market does better than what I’ve outlined here (which is actually very good in the first place), then it’s a bonus. I’m not married to these numbers; I just built from what I had to work with. Whether it’s five years or one year, I’m equally excited.

      Regards,
      Neil

      1. 

         Neil — For a gauge of consumer interest in VR, I don’t think Reddit or Google Communities are necessarily the best places to look.

         There have been a couple of consumer surveys that came out recently, PewDiePie is getting millions of views on his virtual reality game reviews, YouTube’s VR Videos channel is racking up big numbers for some of the videos — like the movie trailers.

         Links to recent surveys:

         https://www.hypergridbusiness.com/2015/11/9-insights-from-latest-vr-survey/
         (69-74% of people “excited to experience VR”)

         https://www.hypergridbusiness.com/2015/09/23-million-americans-have-tried-vr/
         (23 million Americans have already tried VR)

         https://www.hypergridbusiness.com/2015/10/75-of-top-brands-have-vr-projects/

         (75% of top brands have VR projects)

         1. 

            Pewdiepie is an internet celebrity. He was on South Park! He could be talking about toilet bowl cleaner and still get the viewer counts. Yes, of course people are excited about VR! They are excited about hover cars too, but I know they are going to take time (even longer than the Back to the Future predicted 2015). Fortunately, VR is going to take a lot less time than hover cars.

            Wanting and having are different things. Of course everybody wants. I want too. It’s going to take time for everyone to have what they really want – it just is. What’s the rush? The industry players regularly say “we know nothing”. This is the time to take advantage and build and learn. The time will come.

2. 

   Hey Neil – Thank you for this post. I would like to discuss your results for VR adoption rates and also show you the VR App we’ve created if you had 5 minutes?