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Despite Hype, VR Investment Fades In Q1 2017

keraj37

Member
SOURCE

VCs are showing a diminished appetite for virtual and augmented reality startups this year compared to last. Both the number of funding rounds and total investments made into the space have slowed down in Q1 2017.

According to Crunchbase data, a total of 26 companies with AR or VR-focused businesses raised a disclosed funding round in the first quarter of this year. Together, the firms raised just over $200 million in Q1 2017. That result compares to 29 companies in Q1 2016 raising just over $1 billion. Q1 2017 also marks the lowest quarterly number of financings and investment total in over a year.

In the chart below, we look at financings totals for augmented and virtual reality startups for the past five quarters. The spike in Q1 2016 is largely due to a single financing, a Series C round of nearly $800 million for cinematic VR technology developer Magic Leap. That single round is more than four times the size of any other VR-related funding.

Screenshot-2017-04-19-16.15.09-768x581.png


Screenshot-2017-04-19-16.12.40-768x630.png


Still, there’s some disappointing news about the nascent market for VR technology lately that could be turning off investors. Facebook-owned Oculus, for instance, hasn’t delivered on expectations. The VR gaming system developer closed hundreds of live demo stations at Best Buy stores earlier this year due to lack of customer interest. It also recently slashed prices following below forecast sales.

Magic Leap, the highest profile venture-backed VR company, has also been getting some bad publicity. Reports claim that company’s technology has been oversold to investors.

Overall, the global VR industry posted mixed results last year, as initial sales volumes by some high-end manufacturers didn’t live up to the hype, according to a new report from research firm Greenlight Insights. Low cost headsets did better, with the PlayStation VR and Samsung Gear VR among the top sellers. Greenlight expects VR will make good progress in coming years, however, and will grow into a major global market by 2021.

Well, as a low bottom consumer I see it all more less with same results. VR is just not yet there, and it is not that easy to make it "there" despite what financial and marketing sharks think.
 

Vlaphor

Member
As a Vive owner, I buy very few VR games since 90% of them are still just arena shooters and I'm sick of arena shooters.
 

Evilmaus

Member
I'll adopt VR eventually, but as it stands, there just isn't enough content I'm interested in that can justify the cost of the hardware.
 

ElyrionX

Member
I'll adopt VR eventually, but as it stands, there just isn't enough content I'm interested in that can justify the cost of the hardware.

Same boat.

I have income to splurge but there's no content.

Sony messed up their VR launch big time by having too little supply. I wanted to buy one on impulse for like two to three months but I couldn't find one here and now I've lost the urge to buy given the lack of content.
 

Majukun

Member
at the moment the tecnology is not here yet to be sustainable and appealing to the masses..but so were mobile phones at the beginning
 

GHG

Member
I'm still not convinced this will ever take off and become a mass market thing.

Anything where you have to wear something on your head is always going to be a hard sell.
 

Maximo

Member
As a Vive owner, I buy very few VR games since 90% of them are still just arena shooters and I'm sick of arena shooters.

Vive is the best out of all of them but the PSVR has more games I would actually buy, not enough quality games.
 
I think for Games VR its good, but for everything else the resolution holds back what could have been great.
I mean when you play a game in VR you dont notice the resolution, but when you watch a VR video, you instantly notice the low resolution. Often things in the distance feel like you are watching a 2001 rmvb 480p video.

Also for games it really depends on the price. I mean the prices of some of those experiences is far too high compared to a normal game.
Even Oculus still develops some tech-demos like Face Your Fears (with Turtle Rock Studios) instead of developing a real horror game.
 

kurahador

Member
I'm surprised Resident Evil 7 isn't being pushed more as the VR game to have. Highlighting smaller games instead isn't doing VR any favor I think.
 

dumbo

Member
The spike in Q1 2016 is largely due to a single financing, a Series C round of nearly $800 million for cinematic VR technology developer Magic Leap.

The article confuses/mixes VR with AR. In 2017:
- VR is a market, with it's own problems/strains.
- AR is a research project.

Putting those figures together results in gibberish. (Magic Leap is a very weird example of anything to do with VR)
 

Cuburt

Member
Still waiting for tech to improve, prices to drop, and more good games to show up.

At this rate, it will probably be after most manufactures drop it like it was for me with getting a 3D TV.
 

Trup1aya

Member
I'm not surprised.

There's still a lot to be learned. There's going to be a lack of quality so long as standard VR design principles are in infancy.
 
theres been a game drought for vr for a few months itll pick up again once the big hitters start coming out

and when is that? serious question, what are the big upcoming VR games?

Sony messed up their VR launch big time by having too little supply. I wanted to buy one on impulse for like two to three months but I couldn't find one here and now I've lost the urge to buy given the lack of content.

just from my own experience there are a shit load of PSVR in stores everywhere i look (western europe) and nobody seems to buy them.
 

Auraela

Banned
well yea the average joe was saying the same but the hundreds of threads on here was consisting of us getting shot down saying youll see etc, i was saying for ages this isnt going to be a average consumer product and never will be, not for gaming anyway, gaming for most people is a social thing / winding down after school/work, and for many gaming with a vr type device or any form of motion controlls is just effort they dont wanna use because thats not what they game for.
 

kinggroin

Banned
Makes sense. Devs jumped in because it had the word of mouth kind of hype-fire. Strike while the iron is hot and all that.

Problem is the install base is too small, and the units are still way way too expensive. I say this as an owner of both PSVR and Vive. Love them both!

It'll take a few years, but we needed these current headsets to make the inroads they have to get things cheaper and developed faster.
 

Lylo

Member
I'm still not convinced this will ever take off and become a mass market thing.

Anything where you have to wear something on your head is always going to be a hard sell.

Yeah, i think it'll only take off when we get to the point where the tech comes down to something that resembles everyday life glasses, other than that, VR seems to be too much of a hurdle to the point of incovenience. I haven't touched my Gear VR for a long time and everytime i think of it i have no desire to do so.
 

Widge

Member
Same boat.

I have income to splurge but there's no content.

Sony messed up their VR launch big time by having too little supply. I wanted to buy one on impulse for like two to three months but I couldn't find one here and now I've lost the urge to buy given the lack of content.

I'd love to play just Elite Dangerous but that headset cost is so prohibitive. I have to really think to splash out £100-£150 on a synth let alone a huge headset.
 

gamz

Member
Doubt it.

MS is waiting holding out on VR for the same reason investors are no longer excited- the industry simply hasn't figured it out.

Yes. I still think the future is AR. Not in the gaming sector but for general purposes and the business sector. VR is too cut off from reality to be a mainstream device.
 

mclem

Member
Vive is the best out of all of them but the PSVR has more games I would actually buy, not enough quality games.

I think I'd like a Vive as tech I would like to play with, I own a PSVR as tech that I would like to play on.
 

Warnen

Don't pass gaas, it is your Destiny!
With Sony releasing a vr system not fully compatible with there own console, I've completely lost interest in owning anything vr in my home. Best I see is some kind of vr arcade things popping up. Let that go for 5 years then try home again. At least there will be shit to play.
 
VR has always felt like a thing that will get a lot of rave reviews from journalists who get pristine demos and then don't have to personally purchase the product to use it themselves than an actual mass appeal piece of consumer electronics.

Lots of small, shallow experiences and it being very cost prohibitive to the masses is a bad combo.

I want VR to succeed because the more platforms and types of games that exist is good for everyone but a lot has to change with VR for it to ever really reach widespread adoption.
 

GlamFM

Banned
I still believe the tech was not ready for prime time and should not have been released.

I fear this might kill the entire thing actually.

VIVE owner here who bought his first PC just for VR.
 

Gestault

Member
Normally as a hardware platform gets more software and design improvements over time, my interest goes up. In cases where that means a sizable investment, that purchase feels easier and easier to justify.

I've felt less and less able to justify the investment in VR, over the past year.
 
I'm still not convinced this will ever take off and become a mass market thing.

Anything where you have to wear something on your head is always going to be a hard sell.

I don't think it will ever become a mass market thing for gaming. The closest it will get to 'mass market' are people buying a sub $100 smartphone attachment to fuck around with, like they do now. Developers are waiting for the install base to grow, the (prospective) install base is waiting for games in order to invest in the hardware on top of the base hardware( PC with the horsepower, PS4, etc). If Sony doesn't show something substantial this E3, I think that's pretty telling of the general direction at least on the console side, at least in terms of the kinds of experiences you'll mostly get( bite sized games instead of large-scale AAA development).

I think ultimately it will live on through PC if only through mostly indie development or VR add-on modes/games designed to play both in VR and non-VR( ala RE7).
 

UrbanRats

Member
I still believe the tech was not ready for prime time and should not have been released.

I fear this might kill the entire thing actually.

VIVE owner here who bought his first PC just for VR.
Nothing will kill VR.
At worst the current iteration will phase out, but VR as a concept is so integral to the concept of entertainment and storytelling, that is actually, undoubtedly, the ending point of everything videogames and similar entertainment are trying to do, especially escapism based ones.

That said, as a big believer in VR, I'm actually disappointed by the slowness at which prices have gone down and technology improvements of the hardware.
 

bobbytkc

ADD New Gen Gamer
They should stop making niche motion control games. It will be games like resident evil that grows vr, not the half hour experiences that rely on motion control gimmick.

VR first adopters are hardcore gamers. Why are most of the games on the platform clearly casual games? Never made sense to me.
 

llehuty

Member
Yeah, people thought it was going to be the next Wii, but the entry price + the not so evident social aspect is going to make it difficult to go mainstream any time soon.
 
Nothing will kill VR.
At worst the current iteration will phase out, but VR as a concept is so integral to the concept of entertainment and storytelling, that is actually, undoubtedly, the ending point of everything videogames and similar entertainment are trying to do, especially escapism based ones.

No it's not.

I have owned a rift. I can safely say playing videogames in VR will never be the endpoint for me. I may just be a disgusting luddite. But I really don't enjoy gaming in VR. I like to relax, sit back and watch a screen from a distance. For a big open world game, I still don't think I'd like to play in VR. I don't want the game world to consume me. Personally I don't think that's actually a very healthy experience for extended periods of time (in terms of mental health, not the fact the screen is close to your eyes)
 

dugdug

Banned
Thank you, Sony for not having enough PSVRs in stock so that I couldn't buy one when I was still interested.
 

GlamFM

Banned
Nothing will kill VR.
At worst the current iteration will phase out, but VR as a concept is so integral to the concept of entertainment and storytelling, that is actually, undoubtedly, the ending point of everything videogames and similar entertainment are trying to do, especially escapism based ones.

That said, as a big believer in VR, I'm actually disappointed by the slowness at which prices have gone down and technology improvements of the hardware.

I used to think that.

I´m not entirely convinced anymore that this is actually true.
 

Kthulhu

Member
Nothing will kill VR.
At worst the current iteration will phase out, but VR as a concept is so integral to the concept of entertainment and storytelling, that is actually, undoubtedly, the ending point of everything videogames and similar entertainment are trying to do, especially escapism based ones.

That said, as a big believer in VR, I'm actually disappointed by the slowness at which prices have gone down and technology improvements of the hardware.

VR has far too many barriers to entry to be the end point of interactive entertainment.
 

Interfectum

Member
Nothing will kill VR.
At worst the current iteration will phase out, but VR as a concept is so integral to the concept of entertainment and storytelling, that is actually, undoubtedly, the ending point of everything videogames and similar entertainment are trying to do, especially escapism based ones.

This seems like an 80s vision of where video games were going... I'm not so sure this is going to happen anymore. With the way we are hooked on the internet, social media and our phones, I don't think there is a big enough audience that is interested in 100% out of body escapism anymore. It will always be a niche product, in our lifetimes anyway.
 
Has anyone considered that the vast majority maybe simply doesn't like VR? In most threads about the topic everyone seems to assume that VR is THE thing and people only need to see it to be convinced. Now they are closing down their demo stations. To me this sounds as if people just don't like VR, outside of a few. Similar to "3D".
 

shark sandwich

tenuously links anime, pedophile and incels
As I have said before, I DON'T think technology, lack of killer apps, or even cost are what's preventing VR from going mainstream. I think it's:

- the inconvenience of strapping a display to your face and losing vision of your surroundings

- motion sickness (and this is a REAL problem, I never got sick from roller coasters/planes/etc but some VR games made me horribly sick after 5-10 minutes)

- controlling a game by moving your head/neck/body around and pantomiming the actions is just plain inferior to controlling it with small twitches of your fingers

I honestly think VR is the next Kinect or 3D TV. It's one of those things people only THINK they want because it's a concept that is ingrained in our minds as "The Future".
 
This isn't very surprising.

VR needs to become a mass-market device. Even PSVR at 400 bucks is still too expensive. We need hassle-free devices for at most 299$ for this thing to take off.

And devs right now would be crazy to make VR-exclusive games for a market that has such a tiny install-base.

So I'd say it'll just take a few years for VR to truly become a mass-market thing, but I believe as strongly in VR as I did when I first tried it. It's definitely going to be a huge thing, the question is just when it truly and fully enters the mass market.
 

Air

Banned
I expected this. Tech isn't there yet and too risky for pre- established larger studios to make any real investment.
 
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