This Sex Game Could Help Oculus Sell Virtual Reality in Japan by John Gaudiosi @FortuneMagazine March 28, 2016, 8:43 PM EDT E-mail Tweet Facebook Linkedin Share icons When Facebook spent $2 billion to acquire Palmer Luckey’s Oculus VR company in 2014, virtual reality sex games probably weren’t a top priority. But just as the porn industry has embraced Oculus Rift and virtual reality across Google Cardboard, Samsung Gear VR, and Valve/HTC Vive, now so has the adult video game industry. Those wondering what the adult video game industry actually is need to look to Japan. Although there are a variety of “adult” games for the North American and European markets such as BoneCraft and Night Party, Japan has a 30-year history of developing anime-style games involving sex. Kafuji Sato, co-producer at Japanese company ImagineVR, which just released BeacHouSeX for Oculus Rift, says this genre used to make up a large percentage of PC game sales in Japan. But piracy has shuttered most adult PC game studios over the years. “There is still high demand for adult games, but piracy makes it difficult for companies to sustain their business,” Sato says. Get Data Sheet, Fortune’s technology newsletter. Virtual reality could help change that, just as the adult entertainment industry in the U.S. is embracing virtual reality as a way to make money amid the availability of free online porn. Porn site Pornhub is even offering free virtual reality porn trailers to entice new users. By 2025, adult virtual reality content is forecast to be a $1 billion business, the third biggest sector behind video games and NFL-related content, according to Piper Jaffray analyst Travis Jakel. Jakel forecasts that 3% of virtual reality users will pay on average $35 for adult content in 2016, accounting for $13 million in total spending of the total market. This compares to 5% of virtual reality users spending an average of $56.66 on games, accounting for $35 million, and 15% of VR users spending an average of $8.19 on movies, accounting for $15 million. Available now in tandem with the launch of Oculus Rift Consumer Edition, BeacHouSeX is the first “erotic game” designed for the Japanese virtual reality market. Citor3 Entertainment Studio, a collaboration of Finnish game developers and film professionals, worked with Japanese 3D artist Kakomiki and ImagineVR on this project. To dive into the adult video game business with Citor3, company CEO Jari Vuoristo shuttered his post-production studio, Toast Post Production, after nearly 15 years in business. In its place, he built a new, small team of coders, 3D effects, film professionals, and game developers to create BeacHouSex using the Unity video game engine, which is currently used by more than 90% of Oculus games and experiences, according to Palmer. “We want to make a statement that adult content can be made with quality graphics and storylines, while respecting the player,” Vuoristo says. BeacHouSeX is a first-person perspective game that puts players in control of a young man who connects with an attractive young Asian maid after a day at the beach. The current game features a single bungalow environment, but Vuoristo says his team has developed a larger world and will await feedback from virtual reality users before adding additional downloadable content. Vuoristo says the biggest challenge in developing this game for virtual reality is motion sickness. This is currently the reason why all adult virtual reality content has a fixed camera perspective, including 360-degree, live-action content. PornHub Just Released a Virtual Reality Channel “We haven’t fully tackled the issue, but we have some clever ways to make it much more convenient through delayed response,” Vuoristo says. Citor3 has developed an algorithm that eases the head movements of a virtual character. He says this technology will debut in his company’s “fully interactive erotic virtual reality experience,” FemDomination, which debuts later this spring. That title has been designed for virtual reality, and puts the player in a submissive role with a variety of dominant virtual female characters. FemDomination features virtual women who are more photorealistic, which Kafuji says won’t translate to the Japanese market because of a preference for more cartoonish anime-style characters. That’s why Citor3 partnered with Kakomiki and to bring ths 3D artist’s Asian female character, called AB4, into BeacHouSeX. The character is a mixture of anime and realistic art styles, which also opens up the game to both Japanese and Western markets. Kakomiki says he was glad to offer his AB4 model for this international virtual reality project, which he also tweaked and polished. “After providing the model, I was quite impressed by Citor3’s development speed,” Kakomiki says. “I will be glad to challenge myself and polish the 3D model for the next VR project opportunity.” While Kakomiki’s collaboration could attract an audience in the competitive Asian market, it will still be a challenge to combat the piracy issue. According to Joost van Dreunen, CEO of Superdata Research, the seedy nature of sex games has relegated them to the fringes of the industry, providing publishers of those games few options for distribution and making them vulnerable to piracy. “The current popularization of VR as a new platform rejuvenates the hope of sex game publishers to reach a broader audience,” van Dreunen says. Already there are several Western adult VR experiences, such as Charm Crew Complete’s Sana’s VR Experience, Otium VR’s Club Vixxxen, and Affect3D’s Girlfriends 4Ever that are targeting early Oculus and HTC Vive owners. For more about adult virtual reality, watch: Now the Asian market, which traditionally has relied on Net Cafes for free-to-play online PC gaming to combat piracy, has a new way to entice consumers to invest in home PCs. Sato believes adult virtual reality experiences could help Facebook fb and HTC/Vive to sell hardware. After all, playing a normal online game in public is one thing. Interacting with virtual sex characters in public—even when wearing a virtual reality headset—is something else.