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Why Today is Ground Zero For Virtual Reality

Sony PSVR

While virtual reality in its modern form has been around for pushing two years now, I think it's fair to say that today is the true ground zero, and what happens from here on in will be what determines the market's future.

Case in point is Sony's effort with the Playstation VR headset.  In February, Sony announced that they sold their first 915,000 units within four months. Their latest announcement is that they reached two million units sold.  It took them nine to ten months to double what they originally accomplished in four during their most formative period.  When I look at how long it took to grow from the original figures, it tells me that something is off given all the advantages that Sony benefits from.

Still, even with these advantages, Sony has been very lackluster with their PSVR marketing efforts until very recently.  We're thrilled to see that the Sony has been aggressively marketing their solution with a strong new television campaign, a hardware trial program, and more.  Between much better Sony bundle pricing and more content to choose from, Sony needs to grab that brass ring now - and their marketing efforts seem to be exemplifying that mindset.

Canalys logo

If this is where Sony is at, the PC VR manufacturers are likely proportionately less in sales - at least for now. Just a few weeks ago, Canalys published a report promoting that VR sales were on an up-swing with Sony selling 490,000 units, Oculus shipping 210,000 Rifts, and HTC shipping 160,000 Vives in Q3. We didn't report on it because...well...we didn't believe it.

We reached out to the authors to get word on how they came up with these numbers that they framed as fact. These are their words:

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Canalys tracks VR headset shipments into the channel (sell-in), and not sales which are products sold to end users.

We follow a set of strict research methodology to arrive at our quarterly estimates for the VR headset market. We gather information and feedbacks from multiple sources, including vendors, component suppliers, channel partners, financial and press, etc., and process the data with our proprietary models taking account of the results and data that we obtain from our own research.

I would also like to highlight the definitions that we use in our research:

Canalys defines a virtual reality headset as a device with a display designed to be worn on the face that immerses the viewer in a virtual world, and it excludes simple viewers, such as Samsung’s Gear VR and Google’s Daydream View.

There are two main categories that we track (the global numbers you saw include both categories):

Basic VR headset: A device serving a specific set of purposes that is designed to be worn on the face and not carried, cannot run third-party computing applications independently and is generally tethered by cable to a desktop PC. (Sony PS VR, HTC Vive and Oculus Rift are categorized under basic VR headsets)

Smart VR headset: A standalone, multi-purpose device that is designed to be worn on the face and not carried, runs an operating system, and can run third-party computing applications. (Mostly in China for now)

Hope this helps to make things clear. If you have any further questions, please do not hesitate to contact us.
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While I respect the effort, there aren't enough facts to work from here.  If their numbers are presales, it just means the vendors are filling up the warehouses with products waiting for homes and there would be a sudden dip or chasm in Q4 during the Christmas rush because all the product is pre-accounted for.  There is also the very real possibility that their numbers are off because I have no idea how they came to be.

Don't Panic

There is a good news story here too!  Setting aside the numbers and looking more at the fundamentals, I think we are finally entering a good space now.  VR as a media is exciting, the technology is improving, the marketing is getting better, the pricing is obviously a lot lower than previously thought possible for devices, and there is much more affordable computer horsepower all around.  We obviously still need more and better content, but the fundamentals are there.  There is something to build from here and I haven't even acknowledged all the professional use cases for immersive technology.

On that note, we're keeping a sharp eye on the holiday sales and trends.  We will keep you posted!