It’s no secret that VR hasn’t taken off quite the way that early investors would have hoped it to. By no means is it a flop, sales have been fairly decent. However, those who thought it would be the next big thing immediately are probably very disappointed right now. The VR ecosystem at this point in time is a few million units worldwide. Not bad, but compare that to Sony’s PS4 units that have now shipped 53million worldwide since launch in late 2013. Nevertheless, VR leaders are asking for patience. Most prominent of which is Mark Zuckerberg, CEO of Facebook.
Zuckerberg’s plea with investors
Facebook had an earnings call with investors at the start of February. The most interesting development from this was the discussion about the future of VR. Despite severe delays in rollouts of the Oculus Rift and its touch controllers, Zuckerberg believes that development is going along quite well. This is what he had to say:
“Early on there is this issue which is that if you’re a AAA game developer, until there’s a certain volume of units in the field, you’re not going to be able to make enough money to fund your game development just based off of people buying your content. That’s why we’re investing so much capital in content to seed the ecosystem and solve this chicken and egg problem, of you need the content in order to create the ecosystem.
“I don’t know there was something that folks could have done to make that happen fast but I think that was pretty good. And if we can be on a similar trajectory of anywhere near 10 years for VR and AR, then I would feel very good about that. And I feel like we’re making the right bets now to plant the seeds for that. But I would ask for the patience of the investor community in doing that because we’re going to invest a lot in this and it’s not going to return or be really profitable for us for quite a while.”
Comparisons with Mobile
Zuckerberg obviously still believes in VR. Asking for patience from Facebook’s investors is definitely a risky venture. If anyone can allay fears, however, it will be Zuckerberg. Facebook is one of the largest technology companies in the world and can afford to have a less than profitable wing for the time being. To emphasise his points, he used the analogy of smartphones. Specifically, Blackberry and Palm, who launched in 2003. The smartphone market didn’t take off until the launch of the iPhone in 2007.
Facebook’s investors might not like that analogy because it would suggest that someone else will crack the VR market wide open. However, so long as Zuckerberg retains control of Facebook’s long term plans, they will continue working with VR. With the recent developments in the ZeniMax case, however, the road ahead isn’t quite so clear for Zuckerberg and co.
Source: Road to VR