Build to Last: VR Sales Figures You Can Count on!

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Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

It's with special thanks to Dr. Jon Peddie and Jon Peddie Research that they gave us the fundamental sales data needed to make this analysis possible.  More than this, even though this article was originally only intended to be published in JPR's Tech Watch publication, they agreed to allow this article to be public as everyone could discuss, learn, and hopefully benefit from it.  We've also made the article available in Immersed Access so industry professionals can openly (though privately) discuss it and its ramifications if any to build for the future.

A big stink is being made about HTC delaying the commercial release of their HTC Vive until April next year, and others are worried that Oculus has already missed the mark by delaying until 2016 altogether. It's unbelievable how so few understand the VR market and the core metrics that make it tick. Oculus and HTC could effectively wait a whole year, and it wouldn't harm their bottom line or lay a dent in any content or business relationship they are working to build.

How could this be, you ask? What bit of data makes it possible for all the VR HMD makers to sit back and relax and get things right? You'll see.

Read full article...

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

If you want to critique the numbers or add considerations, feel free to share.

Regards,
Neil

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Dom »

This all sounds good, both software and hardware sales will go up. Pc sales were declining I heard. This is nice that a these hmd should really cost a 10's of thousands of dollars for the same thing.

If these numbers are worldwide or just North America then I would be concerned. I would try and reach out to people on the apps store within windows 10 android and apple I phone ipod. Some kind of Candy Crush 3d game in VR might bring in a lot of dough.

They still need to work on 3d chips for gfx cards to really push in the features like they are doing with recording and streaming.

You also need to know that as the future rolls on I would think hmd designs will compact and be more ergonomic.

And the cost of Gloves, walk mat sphere, controllers, ect..

Once someone gets the hmd in place they will start buying everything else to accommodate it.

I want to see these hmd in stores not just on the internet for pre order. I want to witness someone buying one in the same store as I'm in, I think that would be very cool to see how excited that person would be in that transaction.

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

Hi Guys,

I've been seeing external responses to this article, and I figured I'd just summarize some key observations and respond to them as best I can.


1. This analysis doesn't factor in people buying GPUs just for VR. It pretends that VR doesn't exist.


I actually raised this question with Dr. Jon Peddie early on. Isn't VR going to stimulate sales of graphics cards?

It's possible there will be some of this. The sales numbers are purposely aggressive as far as how many units will sell out of the qualified user base, and it's very aggressive to assume that nearly 50% of the PCs owning a new enthusiast class GPU are going to be VR Ready PCs.

Remember these facts:

- 3 to 5 million enthusiast GPUs are sold each year.
- Only a portion of these GPUs are 290, 300, GTX970, and GTX980 GPUs. Not the whole lot.
- This analysis arbitrarily says that a full 7 million enthusiast GPUs are collectively sold in 2015 and 2016, plus the HD290s and 970/980s sold in 2013,2014.
- Factoring nearly 50% of PCs are in this unique VR Ready premium group is high. There is buffer room here I'm sure.
- A 10% attach rate...one in ten gamers that have the right hardware buying an HMD...is very high. Most entrepreneurs like to say "If we get just 1.5% of the market, we'll be rich". 10% is proactively aggressive.

EDIT: I pinged Dr. Jon Peddie this morning to get a quote on this:
"I think there may indeed be some. It will be existing users who are ready to upgrade and this is a perfect excuse, and a few newbies who have been curious about PC gaming and VR is the attraction. VR (on the PC) just doesn’t have compelling content other than some nice demos, and they can’t give enough justification to people to spend $1000+ to get involved, except, for a few people with enough discretionary income."


2. What about people who buy an HMD before they own proper hardware?

The reason the GTX970 and GTX980 GPUs are so important is because they now feature architecture that Oculus and other HMD makers needed. Performance is an important part of the equation, but basic architecture is a cut-off as well. AMD is able to get away with an older GPU because their tech already included this functionality. The same goes for PS4 and PSVR because they are using an AMD GPU which didn't need extra features added.

http://www.tomshardware.com/news/oculus ... 27729.html


3. Are SDK sales an indicator for market success?

I already ruled that out in the analysis. SDKs are business purchases for developers or press. They ended up being enthusiast purchases as well, though it wasn't planned that way. SDKs are often purchased in multiples, so it's not a one to one relationship between the hardware and the customer.

This analysis is strictly interested in consumer purchases of consumer products. It's a different world now, and we have to look outside our bubble - and it's a tiny bubble.


4. Steam Surveys say there are lots of qualified AMD / Nvidia GPUs in the market.

The Steam Survey is a survey and is not representative of actual product sales. It's a temperature check for a portion of their larger audience. Jon Peddie Research, which is arguably one of the most influential GPU analysts in the world, does quarterly reports on who has what market share based on fixed sales numbers given by AMD and Nvidia. Google him. There is very little guesswork in the data that Jon shares.


5. Nvidia says there are 5 million Nvidia based PCs, etc. etc.

Here are the actual slides:

http://www.slideshare.net/NVIDIA/vr-bas ... r-platform

Jon and I saw this before this analysis was finalized. When it comes to marketing, Nvidia and AMD can position themselves any way they want. Our analysis isn't a comparable representation of the number of VR Ready GPUs sold today - at least according to Jon Peddie Research.


6. Reddit shows that the VR market is huge by having 60,000 members.

No, it doesn't. Between the countless account duplicates and its very limited growth day to day and month to month, the community has peaked out - at least for now. This is a very small community. Case in point, why haven't the Oculus forums and the Reddit community multiplied since the Samsung Gear VR went on sale and sold out? Look at the number of Gear VR inquiries on the discussion forums; they haven't climbed like crazy. It doesn't add up. It will one day, but not yet.


7. The GPU sales price will be lower by the time the Rift and HTC units ship.

Not by nearly enough, and by then, people will want to save for the shinier GPU anyway. The circuitry on a GPU is double that of a CPU. Premium graphics cards cost as much as they do for good reason. They aren't going to be mass market products until several years have passed in their life cycle.


8. Yeah, but I'm going to show all my friends and we are going to sell a million within a year! Just you watch!

This remark says it all far me:

"...I just disagree some some of the premises. People who would invest as much money as either 970 or 290 and are that interested in PC gaming aren't as ignorant as the general populous. I somewhat agree that people aren't going to upgrade just for VR, but I also don't think that only 10% of people who have the hardware to run VR will buy into it. If you can drop the money on a 970, you can probably afford one of the VR headsets"

By George, I think he's got it. The PC gamer is but a tiny fraction of the populous. The smart phone business is a mass market business with over a billion Android phones sold a year. Just one successful console is 30+ million and growing through a life cycle that could be as long as ten years - maybe more. A few hundred thousand gamers in either direction is meaningless against the industry expectations.

If anyone thinks that investors are dumping tens of millions - perhaps billions - into this market with the hopes and dreams of reaching a million gamers, they are delusional. They want tens of millions of people using these devices, and unfortunately, some think this will happen next year. It won't.

Given the dependence on processing power and how long it takes to get from point A to B to C...it will take three to five years at the soonest - and that's only if the display market sticks with resolutions compliant for a mass market GPU. It will be a worthwhile and prosperous road for those that design their businesses around realistically growing audience sizes, just not an overnight thing for mass market explosions. Don't panic: it takes three years to develop a AAA game title from scratch. It's ok to bide our time and learn from each other.

That said, even though the market segment is relatively small to start, the gamers are valuable. According to Jon Peddie, enthusiast GPUs account for Nvidia's growth and 50% of AMD's. 300,000 for a new product launch with such regimented requirements is very reasonable. Provided the VR spec doesn't change year to year, it will be a sequential growth.


9. You're crazy! The numbers are wayyyyyyy off!

I've been biting my nails with this piece for weeks because I knew it wasn't going to be popular from the get-go. It's dramatically different from other predictions I've seen to date - no question. However, I've had it reviewed by several people who know their stuff, including top advocates that sell this stuff, and the feedback has been consistently positive. It's ok to have challenges as long as they are identified and we work to overcome them. Better now while there is money in the industry and people can schedule their spending than to wait until it is too late and everything has run dry.

Sure, things can turn out better than what I've shown here; nothing is perfect and this would be a great thing. For me, I'd rather everyone have the data so they could form their own opinions and make the choices that are right for them. I had to share this; if only to know that others had the same tools I did. Good luck!

Regards,
Neil

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by boomji »

Not grim nor wildly optimistic, so good on you Neil :anaglyph
I'd imagine this giving GearVR & PS devs a warm fuzzy feeling.

Totally with you on the "working through this together,Friend or Foe" bit.
Congrats and have a great year ahead.

behram

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by NumberSix »

To the rebuttal point 5:

Does Nvidia really think the baseline gaming experience is 1920x1030x30fps? Even the consoles tout that they're pushing 60fps at that resolution, and FPS fans and sim racers at least are fond of 120fps (and the sim racing.group in particular is fond of triple screens). IMO the gap between currently commonly-owned GPU hardware and the target GPU isn't vast.

Anyway, my take is the barrier isn't the hardware. The key is the killer app. People will throw money at their machines if the must-have experience is there. Any number of good but not great titles will only cause a repetition of the "3d fad" meme from influential tech reviewers.

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

NumberSix wrote:To the rebuttal point 5:

Does Nvidia really think the baseline gaming experience is 1920x1030x30fps? Even the consoles tout that they're pushing 60fps at that resolution, and FPS fans and sim racers at least are fond of 120fps (and the sim racing.group in particular is fond of triple screens). IMO the gap between currently commonly-owned GPU hardware and the target GPU isn't vast.

Anyway, my take is the barrier isn't the hardware. The key is the killer app. People will throw money at their machines if the must-have experience is there. Any number of good but not great titles will only cause a repetition of the "3d fad" meme from influential tech reviewers.

Nvidia's hardware requirements go beyond just the performance. See point number 2. Of course there are different variables that will impact early sales - I agree. This is just some core data we didn't have before that will help with the analysis.

Regards,
Neil

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

boomji wrote:Not grim nor wildly optimistic, so good on you Neil :anaglyph
I'd imagine this giving GearVR & PS devs a warm fuzzy feeling.

Totally with you on the "working through this together,Friend or Foe" bit.
Congrats and have a great year ahead.

behram

Thank you! Maybe that's the crazy thing about all this. If the industry actually sells 300K give or take plus another 200K or some reasonable number for SDKs (for content making developers)...where's the fire? The current expectation of what a success is relative to market dynamics in the PC world is way off.

Regards,
Neil

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by benplace »

I disagree with most of this. VR is going to drive sames of everything else.
I have let probably 25 people try my DK2 and all but maybe 3 people asked how they can get one. My Dad asked me specifically after trying sightline the chair if he went out and bought a computer like mine could he get the head set. I told him in March he could.

More sales of 980/970 cards will lead to less costs to manufacture which will lead to cheaper cards and more "Oculus Ready" shields on computers.

You are completely ignoring the non gamer sales as well.. There are plenty of people that will buy it just for VR porn and adults that will want experiences, classrooms at high schools and colleges for education.

Once they release a PC for 999$ with that Oculus ready logo.. Well let's just say there are going to be a lot of people next year with one present under the tree...

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

benplace wrote:I disagree with most of this. VR is going to drive sames of everything else.
I have let probably 25 people try my DK2 and all but maybe 3 people asked how they can get one. My Dad asked me specifically after trying sightline the chair if he went out and bought a computer like mine could he get the head set. I told him in March he could.

More sales of 980/970 cards will lead to less costs to manufacture which will lead to cheaper cards and more "Oculus Ready" shields on computers.

You are completely ignoring the non gamer sales as well.. There are plenty of people that will buy it just for VR porn and adults that will want experiences, classrooms at high schools and colleges for education.

Once they release a PC for 999$ with that Oculus ready logo.. Well let's just say there are going to be a lot of people next year with one present under the tree...

Thank you for your feedback. This analysis isn't about video games or video game sales. The GPU counts are for all the enthusiast level GPUs in the world. It's not content or industry specific.

I would of course prefer that you are right; this would make my year. $1,000 US for a computer plus $500 or so for the HMD is $1,500 (nearly $2,000 Canadian plus tax). If my sales count is a few hundred thousand out of the ballpark, it doesn't matter. If I'm a few million out of the ballpark (and I really don't think I am), it still doesn't matter:

http://gamerant.com/oculus-rift-sales-e ... uckerberg/

The expectation has been set so unrealistically high - intentional or not - it's madness. GPU manufacturers can't just pump out cheap graphics cards because they want to; it takes time for the manufacturing technology to develop and the justified demand to build. I've wrestled with this too; it just doesn't work the way we'd like it to work.

If this industry thinks it will fall apart because it sells a few hundred thousand units to start (which is actually pretty good for an emerging tech as specific as it is), we all need to do some soul searching and figure out what the realistic expectations are. No real industry was based on a one year launch and wild profit plan. HDTV which we take for granted took 10 years. 3D television which everyone calls a failure was selling upwards of 50 million units a year and it didn't need a powerful computer attached to it. This market probably needs a three to five year plan post-launch; that's very reasonable.

I think I said this to someone else: do we schedule our investments and build for the long term, or do we put all our multi-million dollar risk and personal livelihoods on the line and expect to drive our hover-cars by Dec., 2016?

I'm planning to be around in five years, so I'm stepping off the hype train and driving my hybrid, thank you very much. It's always strategically wise to plan for less and hopefully (hopefully) benefit from more.

I'm sorry if I seem brash. I feel ethically concerned that the market has unrealistic and harmful expectations.

Regards,
Neil

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Dilip »

My extract of article

1) PlayStation VR has more chances of success initially
2) Google can change the picture if they do develop their own SoC
3) No company should panic about they are first to launch or not.
4) Its still considerable years before VR can match popularity and
abundance of smart phone.

"Once they release a PC for 999$ with that Oculus ready logo.. Well let's just say there are going to be a lot of people next year with one present under the tree..."

Totally disagree $1000 is no where cheap by this price enthusiast pc was always available

See $1000 Rig i pointed out Back as MAY 2015
https://choosemypc.net/build/?budget=10 ... options=od

here
http://www.mtbs3d.com/phpBB/viewtopic.php?f=140&t=21117


Trouble is to get it off totally we need much cheaper Pc and HMD that should be below $350 + Game like DragonAge/Assassins Creed/Battlefield/Mass effect totally supporting it at full glory.

So its far .... agree with Neil around 4/5 years away for real boom.

We may see drastic changes in Console and Mobile Scenario.

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Dilip »

For simple reason...

RiFT/Vive are Them selves expensive additionally they want user to have very powerful PC thus twice as expensive. Will not change drastically over next year.

Those who already OWN PS4, for them only expense is PSVR that's all. Device won't require frequent update. Ex. PS3 lasted almost 8 years PS4 being year old now can very well last 3/4 more years thus not expensive in longer run. PS4 being known hardware experiences are going to be more refined and identical for all. Very high chance of success. Unless people really don't want VR. As being very same advantages PS MOVE/ KINECT are still very much failures. PSVR really need intelligently build and super addictive programs Little Big Planet/ God OF War VR to save it. iT must not induce any sickness or discomfort or chances of success are very thin. For most it must not cost TWICE THE PRICE OF PS4 something around $500 will do good. The lower the better.


Cardboard on the other hand plays different game. Here HMD is dirt cheap
Smartphones are so far victorious in luring users almost yearly change now. My self is example before i sarted using android my change of device was in 3/4 years now i am changing devices almost in 18 months. So here chances are like Snapdragon 820 owing flagship may make Snapdragon 801 more mid tear friendly. 801 Still is awesome processor for cardboard apps. So little TWIST in ANDROID build and More VR friendliness in next Snapdragons or Mediateks and VR Gaming out of phone has tremendous growth potential.

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

Yowza!

http://www.gamesindustry.biz/articles/2 ... its-report

Looks like I was completely right on this.

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Neil

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Re: Build to Last: VR Sales Figures You Can Count on!

Post by Neil »

I really dislike this glass half-empty mentality:

http://www.digitimes.com/news/a20161205PD204.html

My answer to such an article would be:

"The numbers are where we thought they would be, this is why, and this is how they will grow in the not too distant future and why".

Regards,
Neil

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