We ask our industry panel - the brightest and sharpest VR professionals from around the world - one question about the VR industry, business, technology or trending stories every week. Here’s what they have to say about the next two years for VR businesses...
There’s a lot of excitement around VR this year, thanks to all the hardware releases. We’re expecting this to cool in 2017, with experts not predicting a real uptick until 2018. What does this mean for VR businesses and how should developers, publishers and studios prepare?
"This is a new industry with new behavioral patterns, so extrapolating specific adoption targets is difficult. That being said, we do believe the market may take longer to develop than expected. Our advice to our portfolio companies, most of which are early-stage, is to keep burn low and expect to make your seed round last for 18 to 24 months. “Additionally, we are quick to tell entrepreneurs to not just plan on their first round but their second and third round of financing as well. While you can raise a seed and A-round on potential and team, by your series B, you are going to be judged on revenue and traction metrics versus other mature businesses. Even if you have the best product market fit, your audience size may still be too small to be able to justify larger rounds of financing, making late-stage funding difficult."
"The hardware companies did a good job of getting to market in 2016 and we're seeing hardware pricing (especially for mobile VR) drop as well, which is great for VR going mainstream. “Also, it seems almost every day we see new peripheral elements coming into place. For instance, tools that allow for gesture and eye tracking, motion capture, and even more that point to both mobile and PC-based VR becoming more accessible and higher quality. “At this point the onus really is on developers and content creators to start catching up and providing quality experiences for these devices to ensure consumer's initial experiences with VR are not only positive, but as exceptional as we know they can be in VR."
“It is possible to create profitable releases already through carefully managing scope. Smaller teams with lower burn rates are able to release profitable games even with the current limited install base, while the big players are either sitting on the fence or planning releases for when the market is more mature. This window of opportunity will likely close in 2018. “Even though the hardware buzz might be less than in the launch year, the market will grow steadily through 2017. At Emberlight, we are preparing for the boom years ahead by making multiple games that allow us to explore different game mechanics, target demographics and monetization models. This will allow us to find more answers about what makes VR players tick and what makes good VR experiences, while hopefully doing our part to progress the state of VR games in the process.”
“Focus on quality original content. If you’re in early it undoubtedly comes with risk, but strong content gives a greater chance of success.”
“This year, there has been excitement for the discovery phase of new hardware, technologies and content capabilities. As has become tradition, games hardware and content - and adult content too - picked up very quickly, as they’re the most popular applications for VR, but consumers are now in need of more exciting and new experiences. “We focus on commercial VR usage in the automotive industry to address the needs of this new experience-led retail world. What we will see is more and more VR applications that support brands connecting further with their customer base; for product discovery, sales, customisation and general brand experiences. As a developer and publisher, a good way to prepare is to ask yourself this simple question: where does this VR experience fit in my customer journey? If the answer is not clear, then don’t develop it.”
“This is a great time for VR developers to work and polish VR titles, as well as get crucial VR community feedback as VR gets bigger over the next few years. As tech evolves and minimum spec gets less over time, this is a great opportunity for early access VR titles to shape and grow with an emerging VR community."
“HMDs, home consumer, mobile and OOH are putting a lot of efforts to promote their devices and are naturally looking for content. They all hope to get significant market share to prove that their model is the right one. Studios and publishers are following this wonderful VR and AR trend which is a major change in digital industry. The small ones - very often the most creative ones - need to get financed by game publishers, distributors or eventually VCs. The big ones can invest from 2018. “If the HMD market is not rapidly fed with adequate games and experiences, we may slow the sales progression or even stop the much anticipated growth in VR.”