- Big game publishers yet to commit
- Developers face myriad VR hardware
IT has been heralded as the next consumer revolution. But strangely, for an industry predicted to be over US$80 billion by 2020, there is very little excitement among the major game publishers.
Whether it is Oculus Rift, HTC Vive or Samsung Gear VR, there are precious few games available from the big beasts of the games industry like EA, Ubisoft and Activision. Most of the games available so far have been from indies.
Will this paucity of game titles from the AAA game publishers hurt the adoption of VR (virtual reality) for gaming?
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Take-Two chief executive officer (CEO) Strauss Zelnick recently identified the problem from his perspective. At the Cowen and Company 44th Annual Technology, Media & Telecom Conference, the company's big boss said VR's current US$2,000 asking price (when you include cost of a high-end PC) and the need for a dedicated play space (like with the HTC Vive) limit its mass market prospects.
Even among the venture capitalists and indies who are bullish on VR's potential, that concern is very common.
"We have like US$300 to spend on an entertainment device and we do not have a dedicated room," Zelnick said. "We have a room for a screen, a couch, and controllers. We don’t have something where you stand in a big open space and hold two controllers with something on your head and, you know, not crash into the coffee table. We don’t have that."
"We’re not incentivised to be at the frontline of [VR] development," Zelnick continued. "We are actually incentivised to wait and see a bit if there’s an installed base, let the format settle down, and let other people test the market. We’re quite happy to be a free rider - if there’s a market, we’ll get to the market in six to twelve months and we’ll be just fine."
This attitude is hardly new. Electronic Arts chief financial officer Blake Jorgensen said last year that the company would "wait and see how big the market is going to be" before entering the VR space.
"There's some challenges still and I think the biggest challenge is just the size of the market. We don't make games anymore for the Wii or the Wii U because the market is not big enough, the PS Vita - the Sony product - we don't make games for that anymore because the market is too small, so it's all about the size of the market," Jorgensen said during the UBS Global Technology Conference.
"As one of the largest software producers we have all of the manufacturers of equipment coming to us to try to sell us on their equipment and giving us development kits to try to build software for it. So we'll build software for various ones but we'll really wait and see how big the market is going to be."
Activision CEO Eric Hirshberg holds a similar view. "We don’t say, ‘Okay, there’s this new technology, this new platform, let’s go design new games for it,’ anymore than we did with the Move or Kinect. There are some ideas where it’s a lot more natural to imagine and some that aren’t."
This attitude of the big name game publishers present a real challenge for the VR industry. It is now very clear that there will be no Grand Theft Auto, Need for Speed, FIFA or Call of Duty that will be coming to VR anytime soon.
As EA's Jorgensen puts it, "I think the reality is, the next one to three years, it's probably going to take some time to build up a sizable marketplace and you might see alternative uses for virtual reality first before it becomes gaming. Longer term, five plus years away, I think there's certainly a market there and it will be another exciting way to enjoy gaming."
The problem is exacerbated by the 'gold rush' mentality afflicting the VR industry today. A good example of this is the complete lack of standards for VR rendering. Oculus Rift, HTC Vive, Samsung Gear VR and the soon to be released PlayStation VR have completely different minimum hardware specifications. The VR game controllers for all these platforms are also very different.
On top of this, PC manufacturers are shipping systems which they claim to be 'VR ready,' but these are guaranteed to only work with the headsets of certain VR manufacturers.
Even if the game developer uses a middleware like Unity 3D which supports all these platforms, it is extremely time consuming to port a game to another VR platform with its own unique controller. If you include QA testing time and optimisations, the port could take several months - not exactly cheap for an indie game developer who is already just surviving on pizza and coke.
Add to this mix, potential new entrants like Microsoft's HoloLens, Star VR and Google's DayDream, the sheer number of VR options before the game developer become truly bewildering.
From the perspective of the big game publishers, it is just a question of install base numbers. After the initial heady projections by irrationally exuberant analysts, the VR hardware install base is now projected to be just over 70 million units by the end of 2018.
To put this in perspective, Sony's PlayStation 4 is projected to sell over 80 million units by the end of the same time frame. So it might appear as if the VR hardware industry will be doing well from an install base perspective.
Unfortunately, in the case of VR, this 70 million install base will be split between several non-compatible competing platforms such as the Rift, Vive, Gear VR, HoloLens, DayDream, Star VR and PlayStation 4. As mentioned earlier, porting a game between these platforms is no easy task and the game developer will have to choose just one or two VR platforms on which he can hope to make money.
The same applies to the consumer. With some high quality games going to be exclusive to certain VR platforms, the gamer will be forced to choose carefully what VR hardware he or she should invest in.
In this regard, Sony might have an advantage with its PlayStation VR. To begin with, it will be cheaper than both Oculus Rift and HTC Vive - even excluding the high-end PC required to power the latter two.
Secondly, indie game developers and big game publishers know that every single PlayStation VR unit sold by Sony will be bought by a gamer - compared to PC-based VR like the Rift which will also be used in other industries such as architecture, real estate, manufacturing and health care.
Lastly, Sony already has excellent relationships with the major AAA game publishers. The company has already announced that over 200 game developers are working on PlayStation VR titles and we are sure to see some big name games coming to Sony's VR platform next year.
Despite the lack of true AAA games, even the company's current launch lineup of PlayStation VR titles look impressive as you can see from this video.
Another current problem for VR gaming is the lack of a killer application. Every successful console or gaming platform in the 40+ year history of the games industry has had a famous game attached to it. Whether it is Sonic for the Sega Genesis, Super Mario 64 for the Nintendo 64, Gran Turismo for the Sony PlayStation or Doom for the PC, there has always been a mascot for the new gaming platform which set the standard for everybody else.
Even mobile game fans can point to Angry Birds and Fruit Ninja. As things stand, VR lacks this gaming trail blazer. Even some of the bigger budget VR games announced so far like EVE Valkyrie are probably not in the 'killer' category.
See the video below and judge for yourself.
To be fair, it is not completely 'wait and see' among all the big game publishers. Ubisoft has publicly announced that it will be bringing its major IP (intellectual property) to VR in the near future.
"We believe a lot in virtual reality because we see that it is really giving a chance for gamers to be more immersed in worlds, and we are developing a certain number of games that are going to take advantage of these new possibilities," Ubisoft CEO Yves Guillemot said recently.
"We are working on the different brands we have to see how we can take advantage of those new possibilities, but making sure also we don't suffer from what comes with it, which is the difficulty to play a long time with those games."
So there is still some hope for the VR gamer in the near future. Hopefully, there will be a VR version of Assassin's Creed arriving soon. Ubisoft has already given a glimpse of its VR ambitions with the stunning Eagle Flight VR demo.
You can see the true potential of VR gaming from the demo video below and how different VR could be to the standard PC and console games.
When the Oculus Rift was originally announced and launched on Kickstarter, many sceptics were eager to point out that the first VR wave of 1990s died out due to lack of good software and side effects such as nausea. Thanks to faster hardware, better design and a more mature games industry, no one is predicting the imminent demise of the second VR gaming wave that we see today.
But the predicted gaming VR wave could still turn out to be a minor ripple if the demands of gamers for high quality experiences are not satisfied. We can only hope that the big game publishers such as EA and Activision will see VR's profit potential and jump in without too much delay.
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