PlayStation VR responsible for 30% of virtual reality revenue as demand shifts towards more premium units
Google and Samsung headsets are all but dead
There’s a shift happening in the VR space that I for one find healthy. Much like how netbooks turned out to be utter garbage and never ignited PC sales, neither did cheap VR headsets like Google’s Cardboard, Daydream, and Samsung’s Gear VR which was thrown in for free with the purchase of nearly every Samsung product. At the time, this strategy garnered those players large marketshares, but the experience was never good, seeing how the hardware had limited power and resolution capabilities. With a market that’s now far more mature, developers have better learned how to leverage the medium which has resulted in an explosion of better VR games — and the only way to experience them is with more powerful hardware like PlayStation VR.
Jeremy Horwitz for Venture Beat:
Sony’s PlayStation VR led what appears to be strong demand for tethered VR headsets, with a market revenue share of 30% compared with Oculus’ 25% and HTC’s 22% — far more than Google’s 11% and Samsung’s 5% shares, with “others” holding the remaining 6%. Strategy Analytics suggests that Sony’s numbers will likely continue to grow thanks to the promise of PS5 support for PSVR, while HTC and Facebook will be aided by enterprise and education adoption of their platforms.
There’s little doubt that Sony is working on a successor to PSVR, but as Jeremy points out, PS5 will be fully compatible with the current PlayStation VR which extends the product’s life, making it a much more attractive buy.
In fact, PSVR already performs better when connected to a PS4 Pro, so it’s not out of the question to assume that the current model could offer an even better experience when connected to the next PlayStation.
The big losers are Google, which fell in share from 21% to 11% year-over-year, and Samsung, which has all but given up on trying to bundle its Gear VR accessories with smartphones. Discontinuation of their low-end options’ giveaways and bundles led to an over 50% decline in year-over-year headset unit shipments, from 2017’s 31 million down to 15 million in 2018, though the numbers counted “headsets” made mostly from cardboard, and lacking any processing or display hardware. As such, that steep unit drop represented only a tiny revenue decline for VR hardware: down from $1.9 billion in 2017 to $1.8 billion in 2018.
I’ve never been a believer in the ‘race to the bottom’’ strategy where a company is willing to sell products at razor thin margins or even at a loss to try to make a profit via sheer volume, or at least boast higher revenues for your company. With VR, companies like Google and Samsung not only did that, but released cheap devices that could never capture what virtual reality could truly offer, seeing how computing power and resolution play such a pivotal role in the experience. In fact, you could argue that each subpar experience with VR hurts the market and creates a negative halo effect around the young format.
For Sony, this is equally welcome news: their PSVR efforts have not been in vain and PlayStation VR is gaining traction with consumers, something that can only improve as more people explore the possibilities VR has to offer. Equally, with PlayStation becoming THE key pillar at Sony alongside image sensors, there’s more pressure than ever on the division to expand, grow, and perform. While still tied to gaming, PSVR could prove to be another way to incrementally grow the capabilities, reach, and audience of PlayStation.
Do you think VR will ever become a key pillar of PlayStation or will it always be a smaller, side-like project?
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