You have probably heard of virtual-reality (VR) headsets. Three of them are coming out this year: Facebook’s Oculus Rift, HTV Vive and the PlayStation VR. Moreover, Samsung has produced a Gear VR unit for low-quality VR. These devices replace your TV or your monitor with goggles containing high-resolution screens close to your eyes. The intent is to offer a more immersive environment.
These VR headsets are large. They cost hundreds of dollars. They need to be connected to computers with very powerful graphical processors to quickly update the view as you move your head around. There is hardly any virtual-reality content currently available to go with these headsets. Some people get sick in them.
There are signs that the current generation of devices are more like prototypes. For example, the Oculus Rift ships with an old-school controller. So we are not even at the Nintendo Wii level as far as input immersion goes!
Facebook’s CEO, Mark Zuckerberg, views VR headsets as a long-term bet. He was quoted saying that it would take about 10 years to take off.
Yet I have decided to bet $100 with Greg Linden that within the next three years, starting in March of this year, we would sell at least 10 million VR units a year (12 continuous months) worldwide. VR units made of cardboard do not count.
Why am I willing to make this bet at apparently long odds?
- Virtual reality is a major next step in our evolution. Even if there is no money to be made in VR on the short-term, the potential is so enormous that backers will be generous and patient. But maybe more importantly, there won’t be any shortage of talented individual interested in working in the field.
- I’d be surprised if the existing Oculus Rift sold more than a few hundred thousand units. It is just too expensive. It just not going to be on sale at Walmart. But within two years, we can almost guarantee that the hardware will either be twice as good or cost half as much. With any luck, in two years, you will be able to buy a computer with a good VR headset for a total of less than $1000 at Walmart.
- A company like Sony has more than enough time in three years to bring the prices down and get game designers interested. Will the technology be good enough to attract gamers? If it is, then it might just be possible to sell 10 million units in a year. As a reference, a single game, such as Last of us, can sell in millions of units worldwide.
Admittedly, most tricks that game console designers try fail. And the PlayStation VR will probably cost more than an entirely new PlayStation initially, making the purchase prohibitive for most. But 3 years is a relatively long time…
Even though the bet with Greg is win/lose, I will add a few more constraints for myself.
- I expect the bet over 10 million units a year to have long odds… this means that I would be very surprised if we are to exceed this number by a lot. At best, I expect a close call.
- Even if I lose the bet, I still expect that we will sell millions of units. If we do not sell 10 million VR units in total over three years, then I will be very disappointed.
- I expect that at least one of the current players (Occulus, Sony and HTC) will fold while at least one new player will enter the market.
So why do I care about virtual reality? In truth, I do not care about VR per se. However, I am constantly frustrated by our limitations. Monitors, keyboards and controllers were good for the end of the previous century. We deserve better today.
I wish I could lose a bet with Greg Linden 🙂
My prediction: VR is never going to take of for the same reason as 3D glasses never took off; you look stupid when using them. If you think about it, this is a rather important factor in adopting new technology. Cell phones only became popular when you didn’t need to carry something the size and weight of a brick with you; most of wearable tech has never become popular because it alters people’s appearance (usually for the worse); no-one uses segways because they look stupid but people have no problem driving car for very short distances.
For disrupting new technology there needs to be some kind of a “natural” entry point where you can use it without being too different. Once it has become popular, people don’t care so much what it looks like anymore.
1. Segways are expensive. If VR units remain as expensive as they are right now (nearly $2000 for an entire kit), they won’t take off.
2. I agree that VR units are large and bulky, and tethered. That’s not great.
May be, may be, meet Malo Girod de l’Ain, his own bet flopped in 2010
http://culture.nextmodernity.com/archive/2006/01/10/2010-futur-virtuel.html
BTW, which are the actual *uses* of VR beside entertainement and a very few niche applications of high tech flavor?
(need a killer app)
You could have asked, when Facebook was launched, what that was for. When the PC came along, most people dismissed it.
I think that if VR is a big hit in entertainment (read: all kids want VR for Christmas) then it will already be huge.
“You could have asked, when Facebook was launched…”
Though I have a Facebook page I am STILL asking what Facebook is for, beside funny videos.
Facebook is worth 300 billion dollars.
For reference, General Motors, once the largest and most powerful corporation in the world, is worth 45 billion dollars.
Ah! So Facebook “use” is to make Zuck and assorted shareholders billionaires?
I guess that’s the “new economy”, didn’t we heard this tune around 2000 already?
> Yet I have decided to bet $100 with Greg Linden […]
Thank you. I really hope more people in academia do this. (I very much enjoyed the recent unemployment bet between Tyler Cowen and Bryan Caplan.)
http://econlog.econlib.org/archives/2016/02/betting_rules.html