The HTC Vive VR prototype head-mounted display
Courtesy of HTC

Shifting the Vive's launch to 2016 sets up three-way battle for the virtual reality market.

By Chris Morris
August 28, 2015

Planning on giving or getting a virtual reality headset for the holidays this year? The options just got slimmer.

Valve and HTC have announced that the Vive, the company’s joint venture VR headset, is largely being pushed to 2016. While a “limited quantity” will be made available this year, the big consumer push is being delayed until the first quarter of next year.

That sets up a three-way battle among the big players in virtual reality—Oculus, Sony, and HTC/Valve. And it leaves just one option this year—the Gear VR, Oculus’ collaboration with Samsung SSNLF that works in conjunction with high-end cell phones from the tech giant.

HTC and Valve declined to discuss the reasons for the delay, but analysts say it wasn’t entirely unexpected.

“I wouldn’t say I was surprised,” says Liam Callahan, games industry analyst for The NPD Group. “To me there’s one or two potential reasons for this: One could be a manufacturing thing. They may need more time. But the other reason could be they’re waiting for the content to be better defined.”

The move, though, does set up a potential slugfest between the contenders as they release their products. The Oculus Rift will ship at the same time as Vive—in the first quarter. Sony’s PlayStation 4 VR headset, currently codenamed Project Morpheus, is scheduled to ship in the first half of the year.

By the end of 2016, says Piper Jaffray analyst Travis Jakel, there could be 12.2 million VR headsets in homes. He expects Rift sales to come in at 3.6 million and Gear VR to hit 5 million. Vive is forecast to sell 2.1 million units, while Sony Morpheus is slated to sell 1.4 million.

Each system has advantages that should make the 2016 battle interesting. Oculus has the deep pockets of Facebook FB behind it, which could result in a subsidized headset, aiding consumer adoption. Vive’s association with Valve gives the headset a link to Steam, the largest PC gaming distribution system with over 125 million active users. And Morpheus from Sony SNE is the only VR system designed for consoles, ensuring that players get a consistent experience that’s not reliant on their PC’s graphics and computer processing power.

None of the systems have released prices yet, though the Rift, Vive, and Morpheus are all expected to fall in the $400-$500 range.

Despite failing to live up to the hype historically, there’s still a good level of excitement about the new VR headsets. Though even the makers of the technology say they expect consumer uptake to be slow initially, they expect momentum to continue building. Callahan agrees.

“It has a lot of buzz,” he says. “We’ve been promised VR culturally, whether it’s the holodeck in Star Trek or the Danger Room in X-Men, for a long time. And the fact is: We’re on the doorstep of it.”

What’s critical, though, is both quality content and a smooth consumer hardware experience. In fact, when Oculus and Samsung began a limited distribution of the Gear VR a little shy of a year ago, there were fears that people would complain about eyestrain or experience motion sickness from the devices, which aren’t as finely attuned as the Rift.

“There was a lot of tension between Samsung and Oculus about what constitutes the right VR product,” said Oculus CTO John Carmack at the Game Developers Conference in March. “There was a fear that if a really bad VR product [went] out, it could set the industry back to the 90s. … I’m kind of surprised we don’t have more Gear VR videos on YouTube of people vomiting.”

That fear of a bad experience hasn’t subsided entirely at any company making a VR headset, though each are confident enough to release retail products next year. However, says Callahan, while each of these systems could have a dramatic impact on how games are played in the future, it would be a mistake to liken the release of the three to 2013, when the Xbox One and PlayStation 4 launched close to each other.

“For consoles you have key IP that’s out when they launch—like a Halo or Uncharted,” he says. “With VR it’s like ‘wait, what do I get?'”

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