VR Profitability For Publishers Is 3 – 5 Years Away, Says Analyst
HTC Vive
(Last Updated On: June 13, 2016)

The media may be talking up VR like the second coming but it doesn’t mean that VR is going to hook into the mainstream market when it comes to consumer interest any time soon. In fact, Wedbush Morgan Securities analyst Michael Pachter believes that publishers won’t begin to see significant returns on the whole virtual reality market until three to five years from now.

GamesIndustry.biz reported on Michael Pachter’s estimates that VR right now is still in its infancy; with the nascence of technology trying to find a foothold in today’s enthusiast market, it’s still a ways off from being a profitable with mainstream consumers.

According to the Pach-Man, VR will only reach close to 5 million people in 2016, and double that in 2017, stating…

“We expect VR HMDs to sell fewer than 5 million units in 2016, and expect to see that sales figure double in 2017 and to double again in 2018. Once the installed base of HMDs has reached 20 million or so, it is possible that one or more of our covered publishers will begin to monetize its IP and to generate profits from virtual reality,”

That’s actually a very reasonable estimate given that right now VR just isn’t saturated enough in the market to make any of the top publishers big returns on their investments when it comes to VR-exclusive games.

There are games like Edge of Nowhere and Obduction offering VR compatibility, but insofar of big AAA titles exclusively adopting VR… that hasn’t happened yet.

It sort of turns the entire VR landscape into a chicken and egg scenario, where people aren’t going to buy high-end VR HMDs if there are no good games for them, and publishers aren’t going to spend big money to make high-end games for the VR HMDs if people aren’t buy the the headsets.

Nevertheless, Pachter and other analysts believe that VR will eventually get to the point of profitability.

Not everyone believes that VR is going to be as big as the media claims, though. Superdata Research even lowered their forecasts by 22%, according to a report from GI.biz back in April. In fact, various market research firms have been scaling back on their enthusiasm for VR as delays and high costs of entry have essentially made products like the HTC Vive and Oculus Rift designed purely for top-market enthusiasts.

Nevertheless, Pachter mentions to GamesIndustry.biz that e-sports will be a longer road to profitability for publishers than VR. He’s estimating that publishers won’t see immediate returns on the e-sports sector until it grows substantially, and he’s expecting that that won’t happen until up to a decade from now.


Ads (learn more about our advertising policies here)



About

Billy has been rustling Jimmies for years covering video games, technology and digital trends within the electronics entertainment space. The GJP cried and their tears became his milkshake. Need to get in touch? Try the Contact Page.

  • C G Saturation

    Kinda ironic that Virtual Reality seems to be getting games made by people with little to no imagination. What’s the point in making goggles that let you experience stuff that you can probably already easily do in reality? They need to be more creative.

    • I think that’s part of the problem right there: zero creativity.

      The only thing that could spur sales of VR headsets is No Man’s Sky… that’s assuming they implement VR support.

      Just about all the exclusive VR titles are just kind of ho-hum and humdrum. Tech demos without any sort of advancing innovation in tech.

  • Bitterbear

    There is no must have game for the mainstream audiences. Right now we just have pretentious walking/flying simulators and platformers seen on a floating faux 50-inch screen.

    I’m waiting for a game with something this:

    https://www.youtube.com/watch?v=x76VEPXYaI0

    And that it should include a terrain editor so that people can make their own tracks.