Will the rapidly falling price of VR lead to mass adoption?

One of the biggest stories for VR in 2017 has been the significant reduction in price for VR headsets. Possibly spurred on by Microsoft’s Windows Mixed Reality headsets attempt to undercut the Rift, Oculus dropped the price of its headset with touch controllers from $600 to $400 for its “Summer of Rift” campaign. This is much closer to the initial price point that Oculus’s founder Palmer Luckey suggested the commercial headset would retail for and results so far indicate that units have been flying as a result. With CONTEXT’s 2017 VR Research Group survey indicating that the cost of the headset is still a major deterrent for 45.4% of respondents, 38.1% of gamers would spend $400 or more on a VR headset, compared to only 11% willing to spend over $600.

The other major barriers with regards to cost are those associated with buying a PC powerful enough to run VR games to an acceptable level. Road To VR reports that Wallmart will be selling a comfortably “VR Ready” HP Pavilion Power Desktop with GTX 1060 graphics card for $500 as a part of their Black Friday promotions. For the first time it will be possible to buy a fully VR capable solution with PC and headset for under $1,000 which is considered a sweet spot for gamers and a long way below the $2,500 figure widely acknowledges to be the minimum investment for VR only a couple of short years ago.

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On the console front as well, a PS4 and PSVR was available for $200 from selected retailers on Black Friday, down from $399 normally. Combined with a strong line up of PSVR exclusives, this may enable Sony to maintain or even grow their already substantial lead in the high-end tethered VR headset market.

The question remains as to whether these price drops will be enough to drive mass adoption in Q4. While it is likely that the install base will benefit dramatically from falling prices, which will be encouraging to developers and others with a stake in the industry, there are still a few barriers to VR hitting its inflection point.

Interest in VR among non gamers is growing, but not nearly as quickly as some had hoped. While there are undoubtedly many uses for VR both seriously and as a general entertainment medium, it is clearly gamers who show the strongest interest in the technology for now. Only 4.8% of UK gamers think VR is a gimmick compared to 30.2% of non-gamers (down from 48.3% last year) suggesting that this demographic will be the easiest to target in the short term.

Still, while the potential for gaming in VR is widely acknowledged, many gamers are still waiting for the technology to improve. 61.9% would like to see higher resolution headsets, 74.5% would like to see “better quality content overall” and 51.3% said “one really exciting big budget game” would increase their interest in buying a VR headset.

Will Q4 see the stars align for VR to start seeing significant market penetration and finally create the virtuous cycle required to fuel this exciting new industry? Only time will tell, but here at CONTEXT, we’ll be watching the data come through with bated breath for the first signs of that mythical inflection point.

by BB

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Filed under Retail, virtual reality

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