A few months ago, we ran an article entitled “Build to Last: VR Sales Figures You Can Count On“. It was very well received, and it influenced quite a few people.
Based on accurate GPU sales provided by Jon Peddie Research, we are expecting about 300,000 to 500,000 PC HMD sales (Oculus, HTC, and others) total within 12 months of launch. This includes customer sales as well as content creator / media sales. With recent changes to Samsung Gear VR’s marketing strategy, our Gear VR sales expectation has been upgraded from 3 million to 9 – 12 million units within 12 months of launch. An updated sales article is getting printed elsewhere later today with additional new details. Sure HMD sales can be better; this is based on the reliable data we have access to.
Facebook has been promoting that VR won’t be a mass market for at least ten years. The first time they did it was on February 9, 2016 via Fortune Magazine. In this case, it was quoted by Sheryl Sandberg (COO) and David Wehner (CFO) from Facebook at the Goldman Sachs Technology and Internet Conference. The second time was just the other day by Mark Zuckerberg himself through Technology Review. Only this time, Mark went from 10 years to anywhere from 15 to 20 years!
So what does Facebook mean when they use the words “mass market”? The figure they’ve gone on record with is 50 to 100 million units. To put this in perspective, the total current enthusiast gaming PC market is only about 15-20 million units, and once the entire lifespan of the PlayStation 4 is completed, they will have about 100 million PS4s in the wild. It’s a very tall order that Facebook is envisioning, so it’s no wonder they are quoting such a long stretch of time.
It’s very easy to misinterpret this messaging without context, and left unchecked, it could have consequences for their content creation opportunities because:
- Angel investors don’t back ten year plans, they back three year plans.
- Content makers have two to three year AAA game production cycles and they need to see light at the end of the tunnel (and the good light, not the light you see on your deathbed!).
- There are already millions upon millions invested in this space that are hungry for a return on investment.
- The supporting vendors in the PC market (GPUs, API writers, PC makers, etc.) have all shaken things up to support the technology.
- Many Meetups and conferences have completely volunteered their time for industry growth.
A ten to twenty year vision doesn’t make sense in this environment; it won’t work.
In my opinion, it’s completely feasible that content makers can begin turning significant virtual reality and immersive tech profits within the next three to five years – some much sooner. It will definitely help to be working in specialized industries because the number of HMDs sold becomes far less important. If enough SDKs or interoperability standards are supported, the chances of success are even greater. The GPU and supportive processor markets will benefit from better margins from selling premium products even if they don’t sell more units; so they will do well I’m sure.
Facebook’s ten year expectation is correct for their scale; of this I am confident. I just think it’s important that they constantly put this in perspective because when others misinterpret what they are saying, it could easily undermine the content-making opportunities that they and others are counting on. I think it would be more beneficial for Facebook to position themselves as a unique entity, and publicly discuss their three to five year plan and how it stands to benefit the industry players in the short to mid-term.
That’s my take for the day. Good luck everybody!