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Visitors play the game "Farpoint" with the virtual reality head-mounted 'Playstation VR' developed by Sony Interactive Entertainment during the "Paris Games Week" on October 26, 2016 in Paris, France. Photograph by Chesnot—Getty Images

We’re in a Virtual Reality Bubble

Nov 15, 2016

The staff of Fortune is assembling its predictions for 2017 in our annual feature, the Fortune Crystal Ball, now on newsstands in the December 1 issue of the magazine. Here’s one of our forecasts.

Gaming and entertainment firms are pouring big money into virtual reality, betting that it’s destined to be the next big thing. There’s just one problem: early adopters aside, consumers don’t agree.

As of November, shoppers can buy any of the big three “first-generation” headsets: Oculus VR’s Rift, HTC’s Vive, and Sony’s PlayStation VR. But there’s no sign of a mass frenzy to scoop them up. That’s in part because they lack a “killer app” to justify spending hundreds of dollars on yet another gadget.

For more on Virtual Reality, watch this Fortune video:

To be sure, there are signs of growth in VR. Research firm Deloitte expects 2016 to be the industry’s first billion-dollar year. But it’s looking likely the rocket ship will stall in 2017, unless makers of the pricey software can come up with a raison d’etre—and soon.

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