Editorial: This VR cycle may take more time than expected

Two days ago I was reading an interesting editorial about PSVR 2 by Scott Hayden, and my mind started wandering about the current moment of virtual reality, the stasis we live in, and our expectations for the upcoming headset. In this article, I’m going to tell you all the thoughts I had.

The new “Autumn” of VR

If you’ve read some of my articles this year, you know I’m defining this moment as an “Autumn” for virtual reality. The ecosystem is not growing much anymore, because the hype for the “metaverse” deflated, the economic conditions are pretty bad, and the most popular VR device has arrived at the end of its cycle. It is not easy to make money in XR now, but the situation is not so desperate as during the “Winter” of VR, that’s why I define it as an “Autumn”. In my job, I keep seeing opportunities popping up here and there, so things are not very bad. But they are not good, either.

Plus there is this sense of perceived “stasis” of the technology. As I said a few months ago, we are in the middle of a paradigm change: the cycle that started with the Quest is arriving at an end, and a new cycle driven by new technologies (mixed reality headsets) and new players (Apple, Google) is starting. A new cycle that should bring new life to XR, with new users, new content, etc…

I started wondering how this new cycle is starting, and if its beginning has already started to show the signs of a big jump for VR. I remember that when the Quest launched, it made a big impact on the VR market, which was amplified even more by the Quest 2. Those devices made a big difference for XR. Is the same happening now?

A mild start

In my opinion, no. I think this cycle will be marked, at least in the beginning, more with a linear and painful growth than with a big step like it happened with the first two Quest devices.

I have this impression for a few reasons. The main one regards the 4 devices we were waiting for this year, which in our opinion should have changed everything: Quest 3, Apple Vision Pro, Google-Samsung Headset, and PSVR 2. There was (and still is) quite a good hype for these headsets, exactly as there was hype for what was Oculus Santa Cruz, the codename of the Oculus Quest. But the outcome for these headsets is a bit different than expected. Let me tell you why.

PSVR 2

I had big hopes for PSVR 2. The headset was expected to be very good and to make tethered VR great again. I hoped it could re-ignite all the sectors of tethered VR, giving also new life to PCVR, with content that was ported from the console to the computers. I had a lot of hopes for this device, which had good hype from the community.

The headset proved in fact to be very good from a technology standpoint. But it looks like it has been just soft-launched, with the catalog of content being pretty limited at the moment. Sales are okay, and this device is selling 8% more than the original PSVR, but these are not numbers that are going to be disruptive for the ecosystem. I’m pretty sure that Sony is waiting the next few months to make some moves, there’s still the Black Friday and the Christmas Holiday that have to happen, but at the moment I do not see this device as disruptive to our ecosystem.

It is a good addition, we are all happy that is here, but it smells more like incremental growth than something that may change everything. This is because the sales have not been enormous, and the content for it is not exploiting completely its new features (there are some cool uses of eye tracking, but that’s it). PCVR keeps remaining stale, and I don’t see fewer complaints from the PCVR community since the launch of the Sony headset, showing that it had no relevant impact on other sectors of XR.

Apple Vision Pro

In 2023, Apple finally announced its headset, after we all spent hours in the past years watching those useless Apple events where Apple announced new phones and tablets we didn’t care about. My hope every time was that Tim Cook said “You see these glasses I’ve worn for 2 hours? They are Apple AR glasses!” and made the brains of the whole crowd explode.

Unluckily Tim Cook didn’t make such a badass announcement, but he still did his “One more thing…” thing and announced the Apple Vision Pro. The days after, we all were speaking about the new Apple headset and the air was electric in all the VR circles.

But then… after the initial euphoria, we all started realizing that at the starting price of $3500, this headset has a limited market. Plus rumors surfaced stating that Apple doesn’t even have the capability of producing many devices, because the Vision Pro is complex to manufacture. The device will be available next year only in the US, then at the end of the year in other countries (like the UK), making me think that a more global rollout may happen in 2025. The Unity Beta to develop for the Vision Pro is still not available, so many devs like me can’t even play with the emulator. The rumors from Mark Gurman talk about a new cheaper version, which can have a more mass market appeal, forecasted for 2025-2026.

This information shows us that Apple is playing a long-term game. It does not need to rush this device because its business is based on other products. And the technology to do what it wants to achieve is not ready yet.

The Vision Pro has brought some enthusiasm back into our ecosystem, and also some trust from the investors: if Apple is interested in XR, it means that in the long-term, XR is a technology that will likely succeed. But apart from this, I’ve seen no disruptive changes in our space coming from this announcement, and given the price, I think that we won’t see anything disruptive next year, either. As I’ve said, Apple is playing a long-term game and we will see the beneficial results of its entrance into the field in the next few years.

Google and Samsung

We were all waiting for the moves by Google and Samsung, and it was great to see that they announced that they were working together on a headset, with each company doing what it knows how to do best: Google the operating system and Samsung the hardware. Google and Samsung helped the smartphone ecosystem to grow to what it is today, so we all hope they can do the same with immersive headsets, too.

But the rumors in the past weeks highlighted that the situation of this device is very confusing: Google doesn’t have a clear XR strategy and this confusion also led some key engineers to leave the company. The Samsung headset seems to have also been delayed because Samsung was surprised by the features announced for the Vision Pro, so it needs more time to create a device that can compete with Apple’s.

Long story short: things are not good. I’m sure that in the end they will announce something, but given the premises, probably it won’t be this year, and probably it will be too expensive. Again this is not something that is benefitting the ecosystem today.

Quest 3

Let’s come to Meta and its upcoming device, the Meta Quest 3. All previous Meta Quest headsets made the market take a step forward, and there are very high expectations for this one, too. It is the first Meta headset with high-resolution passthrough AR and a depth sensor in front of it. It should have great mixed reality capabilities, and we all XR enthusiasts can’t wait to put our hands on it.

The question that I started to ask myself is: “Okay, we all VR fanboys want it… but what about average people?“. I mean, why people should want mixed reality? To do exactly what?

The Quest 2 was sold as a quite affordable gaming console, and many games have been released for it over the years (a few hundred). That’s a clear purpose. The Quest 3 allows for better and more powerful games, which is good, but its main selling point is that it adds mixed reality. And I’m wondering who asked for it.

Don’t misunderstand me: I’m a huge fan of passthrough mixed reality, and I’ve always bragged about being among the first group of people who experimented with it on the first generation of standalone headsets (to be exact, on the Vive Focus Plus, in 2019). There are a few nice apps on Quest that exploit MR in a nice way, and when a few weeks ago I tried the passthrough mode of Demeo with my friend Mike, I was amazed by the sensation it gave me of my friend being there next to me, playing in my room.

That said, I still can’t see a widespread appeal for the mass market that loves playing Gorilla Tag. Games in AR/MR, being them on mobile or headset, never got very successful. You may mention Pokemon Go, but that is a game based on geolocation, and AR is just a little detail of it. When ARkit arrived on mobile phones, there was a lot of hype about it, but at the end of the day, pure AR content on the App Store never skyrocketed. AR on mobile is mostly successful with AR filters and AR virtual try-ons. If the Quest keeps being a VR gaming console also with its version 3, then I find mixed reality a hard sell. It should transition to be a more general-purpose device (a bit like a portable PC), but then it should change a lot of its communication and also release a lot of utilities based on mixed reality. Not an easy task.

The Quest Pro already introduced mixed reality and eye tracking: I’ve seen a few interesting experiments with it, but the device was a total flop. If mixed reality was such a defining feature, the sales would have been many more, even if the device was not that great. Pico 4 has pass-through MR, too (even if not stereo-corrected), but I’ve heard of no great use of it, either.

The irony is that over the years, glass-based AR struggled to find its place, too. Magic Leap flopped, HoloLens is dead, and even Nreal, with its affordable Light glasses, has not taken off. Talking about Nreal, it is symptomatic that it is having enormous success with Nreal Air, which is a media viewer, much more than it ever had with its 6DOF glasses. People are interested in using XR for enjoying content on a big screen more than anything else. That’s why Apple is betting a lot on that use case, and I’m sure that Quest 3 will try to do the same, but with a screen that has not the same resolution as Apple’s one.

The Quest 3 is also going to be released at $500. If you add VAT, in Italy it will cost €600. That’s a good amount of money. In these 9 years in VR, I’ve noticed how price is an important factor in defining the success of a device, and Oculus/Facebook/Meta has based its strategy on it in the last years. It’s not the only factor, but it is an important one. $500 is much more than the $300 of the launch price of the Quest 2 and this is going to impact its sales.

What I’m saying is that I suspect that the Quest 3 won’t be a device that will make the XR market explode. It will surely have good sales, and I will be among the ones buying it. It will make the VR market to grow. But I don’t expect the same effect the Quest 2 had. The current economic conditions are bad, the device is not cheap, and the added value is not clear for the users unless Meta is going to launch so many wonderful MR apps that make it clear for everyone. I hope to be wrong, of course and see Quest 3 selling 50 million units, but I highly doubt it. At least in the first year.

To me the Quest 3 is part of a long-term strategy by Meta, that makes it transition from a purely VR company to a mixed reality one. It’s part of its journey towards the glasses worn every day. But it’s a first step that includes completely building a new sector, a new need, a new market, and I doubt this will happen immediately.

So what are we waiting for?

All the things we were waiting for to make XR shine again seem to take more time than expected to bring any notable contribution. I think this new cycle is just at its start, and it will take more time than we hoped for to ripe and make the immersive ecosystem grow. For now, I forecast only linear growth, which is good, but not the big jump we were (and are) hoping for.

I started wondering what we are waiting for at this point. In the past we blamed price, content, weight of the headsets, FOV, and the lack of eye tracking… but now we have all of them in one device or another: Quest 2 is very cheap and it has a lot of games to play; all the headsets now are quite lightweight, and new devices like HTC Vive Flow or Bigscreen Beyond are really small; we have wide-FOV device like Pimax; eye tracking was provided in the Quest Pro and PSVR 2. None of them made XR to skyrocket. It seems to me that we are focusing too often on some specific feature than on the overall value of the device and the ecosystem. The value given to the users is the only important metric, together with the usability, which currently in VR is still so-so. Apple is working exactly on those two points and that’s why it is attracting a lot of interest.

The value perceived by the user is more important than every technical number we may talk about. This is not a new topic… we have been discussing it for ages (do you remember all the talks about the “Killer app of VR”? Pepperidge Farm remembers…), and I think we will continue for many years. The headsets will keep improving on the technological side and becoming cheaper, and the number of applications created by developers will keep growing and becoming more sophisticated thanks to the new features of the devices. These applications will give always more utility to the devices. The headsets will become also more comfortable and usable. At a certain point, we will reach an inflection point and that is the moment where XR will start becoming truly mainstream. I’m a true believer in this. But that will take time. 5-10 years, as I always guess 😉

In the meantime, I expect a slow and steady growth of the technology that will bring us out of this Autumn, but with a new consciousness that this new cycle of XR will be less explosive than I expected.

(Meme based on an Image from South Park)