Consumer VR

in 2020

By @elijah_tai

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The VR Flywheel
A mental model for thinking about the nascent ecosystem

Audience Developers

Initial R&D
investment from
companies and Hardware
startups Content

Marketplace

@elijah_tai
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Early consumers seed

the audience for devs

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Growing audience
Audience Developers de-risks platform and
creates opportunity

Hardware
Content

Marketplace

@elijah_tai
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Audience Developers

Hardware Developers release

Content content into
marketplace

Marketplace

@elijah_tai
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Which attracts
more consumers

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Audience Developers

Hardware Which sells more

Content content on the
marketplace

Marketplace

@elijah_tai
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Audience Developers

Hardware
Content

Marketplace sales fund

more R&D since Marketplace
hardware usually sold at
loss
@elijah_tai
Applying the flywheel to some
Facebook events

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Facebook stimulates flywheel through M&A:

Beat Games acquisition (Nov 2019)
Audience Developers
(Oculus Studio)
Beat Saber, by Beat
Games, is the most
Beat Games popular VR game to
date.
Hardware
Content Sold over
1 M copies in
4 months.

Marketplace

@elijah_tai
https://www.theverge.com/2019/11/26/20984468/facebook-acquisition-beat-games-beat-saber-vr-studio
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Facebook stimulates flywheel through M&A

Sanzaru Games acquisition (Feb 2020)
Audience Developers
(Oculus Studio)

Sanzaru Games is
Sanzaru Games the creator of
Asgard’s Wrath
Hardware
Content

Marketplace

@elijah_tai
https://www.oculus.com/blog/welcoming-sanzaru-games-to-facebook
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Facebook stimulates flywheel through M&A

CTRL-Labs acquisition (Sep 2019)
Audience Developers

CTRL-Labs
for $500M -$1 B Hardware
Content

CTRL-Labs is a
brain-computer
interface startup
Marketplace

@elijah_tai
https://www.theverge.com/2019/9/23/20881032/facebook-ctrl-labs-acquisition-neural-interface-armband-ar-vr-deal
Applying the flywheel
to everything else

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Hardware: Falling prices, f ull 6-DOF and cordless, PC-less setups

are reducing barrier to entry for high quality VR

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Oculus Quest has best experience : cost tradeoff

High overall
experience

$ $$$

“overall experience” =
Low overall content, image quality
experience @elijah_tai
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Before Oculus Quest:

Gaming PC required → poor product evangelism

Wires limited movement

Was a hassle to set up

Can’t take to friend’s

house
Image: Oculus ad

@elijah_tai
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After Oculus Quest:

Gaming PC not required → easier product evangelism

No wires, no setup required

Full 6 degrees of freedom

All-in-one @ $399 USD makes

friends want one

Image: Oculus ad

@elijah_tai
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Lots of cases for Quest on Amazon testify portability

@elijah_tai
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Oculus Link allows Quest to tether device to PC

for Rift + SteamVR content

https://www.oculus.com/blog/play-rift-content-on-quest-with-oculus-link-available-now-in-beta/?locale=en_US

@elijah_tai
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Google and Samsung killed their mobile VR programs in late

2019 due to low adoption and subpar performance

@elijah_tai
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… but new form factors show manufacturers are learning

Pico Neo 2 with better weight distribution Panasonic with new goggle form factor

Image: Tobii @elijah_tai

Image: newatlas.com
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Hardware in summary

● Standalone, PC-free headsets with inside-out 6-DOF tracking is new industry benchmark
● Mobile VR was a failed experiment; future devices will be fully dedicated to VR
● New form factors with better weight balance are on the way

@elijah_tai
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Audience: Quest rekindled interest in VR. Active discussion and

user-generated content drive engagement.

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Peak search interest in Oculus Quest 33% higher than Rift and
PSVR’s peaks

Source: Google Trends @elijah_tai

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Very engaged /r/OculusQuest Reddit community growing

10-15% month over month

@elijah_tai
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Highly visual nature makes VR content easy to share on Reddit

@elijah_tai
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Discord as community-building tool for developers to engage

with early testers and fans

@elijah_tai
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“Is it mainstream now?” question is hard to kill

@elijah_tai
https://www.youtube.com/watch?v=VAi0o7NdyR4
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Audience in summary

● Search volumes for Oculus Quest at its peak were 33% higher than the peaks of previous
VR headsets such as Oculus Rift and PSVR
● Reddit useful for users to share their experiences with other VR users
● The most engaged audiences use Discord as a way to provide feedback and stay up to date
with developer-specific announcements

@elijah_tai
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Developers: SideQuest has become a pre-Oculus Store testing

ground. Indie studios see blue ocean.

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Sideloading is a new way for developers to get VR games into

hands of Quest owners. 200K active users.

SideQuest’s Discord chat group has nearly 21 K members as of

Feb 1, 2020

Many developers use SideQuest to prove their game’s commercial

viability to Oculus.
@elijah_tai
https://uploadvr.com/sidequest-interview-video/
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Mid-size indie game studios see blue ocean in VR

"Coming from a PC/mobile space myself, it's a challenge with a smaller market. But it's also nice
because it's a niche with a very, very passionate audience actively looking for content and ready
to spend on the right game … It's a much bluer ocean in that sense, which is really
refreshing in a way."

- Oskar Burman, in interview with gamesindustry.biz

@elijah_tai
https://www.gamesindustry.biz/articles/2019-12-06-fast-travel-ceo-navigates-vrs-speed-bumps
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Large AAA game studios haven’t ruled out VR

Excellent purchase drivers for VR hardware.

Half -Life: Alyx, produced by Medal of Honor

Valve, has the largest team ever coming in 2020.
committed to the project. Coming
March 2020. @elijah_tai
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Developers in summary

● Devs frustrated with Oculus Store helped grow SideQuest into what it is today
● SideQuest used to incubate pre-Oculus Store games - traction in SideQuest shows
potential in Oculus Store
● Both indie and AAA game studios such as Valve, Respawn are releasing new VR games this
year. Ubisoft also planning new AAA game.

@elijah_tai
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Content: Facebook building social VR game. Rhythm and

shooter games are doing best on Quest.

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Facebook’s social VR world, Horizon set to launch in 2020

https://www.oculus.com/facebookhorizon/ @elijah_tai
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Games with plenty of movement are most popular on Quest

Top Quest games, ranked by VRDB (excluding Vader

Immortal titles):

1. Beat Saber - rhythm

2. Pistol Whip - rhythm shooter
3. Arizona Sunshine - shooter
4. SUPERHOT VR - shooter
5. The Thrill of the Fight - boxing

Data from: https://vrdb.app/quest

@elijah_tai
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Quest now has 154 titles on Oculus Store, from 53 in 9 months

https://www.oculus.com/experie
nces/quest/section/226705144
927006

@elijah_tai
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Content in summary

● Will be interesting to keep an eye on how Facebook monetizes Horizon, if they do

● Top games on Quest are games that fully utilize portability of the device, such as rhythm
and shooters
● Number of titles available for Quest tripled in 9 months

@elijah_tai
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Marketplace: Oculus saw holiday success, Quest accounts for 40%

of Oculus Store sales.

Audience Developers

Hardware
Content

Marketplace

@elijah_tai
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Oculus sold almost $5 M of content in Oculus Store on Christmas

day
On Christmas day, people bought almost $5 million worth of content in the Oculus
Store. That's an outlier day, but still this is real volume by any measure and it shows the progress
this ecosystem is making.

- Mark Zuckerberg, investor call on Jan 29, 2020

@elijah_tai
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Oculus Quest now accounts of 40% of Oculus Store sales

https://www.roadtovr.com/2019-major-i
nflection-point-vr-heres-proof/

@elijah_tai
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Year-over-year monthly connected VR headsets on Steam are up

75%

@elijah_tai
https://www.roadtovr.com/analysis-monthly-connected-vr-headsets-on-steam-record-high/
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Marketplace in summary

● Oculus Store generated $5M in sales on 2019 Christmas Day

● Oculus Quest is now 40% of Oculus Store sales
● Steam sees VR hardware connections increase 75%

@elijah_tai
Big Tech on
hiring spree

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FB has a team of 4,000 working on building their own OS

Facebook’s most popular headset, the Oculus

Quest, runs on Android. In order to become
less dependent on the Android OS, they’ve
brought on an ex-Windows OS engineer to
help them build their own VR/AR OS.

https://twitter.com/alexeheath/status/1207677654616461312

@elijah_tai
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Hiring for AR has increased 30x

https://venturebeat.com/2019/08/01/apple-lists-ar-vr-jobs-reportedly-taps-executive-who-finalizes-products/
@elijah_tai
What about the
Web?

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Why is the Web relevant in VR?

1. Future-proofing against new hardware - the

browser and Web are intrinsically cross-platform
2. Infinitely extends the available content
3. Developers do not need approval from any
marketplace to distribute an idea
4. Lower barrier to entry for enterprise applications
5. Updates to content are immediate and do not
require additional downloads

@elijah_tai
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Oculus Quest is first 6-DOF VR hardware where browser was

placed front-and-center

@elijah_tai
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Moonrider, a WebXR game, has thousands of daily actives

@elijah_tai
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Many different ways of making VR content for the Web

Frameworks: Creator Tools:

@elijah_tai
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Many different ways of consuming VR content on the Web

@elijah_tai
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Performance improvements to come with WebGPU and

WebAssembly

@elijah_tai
Predictions
for 2020?

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I predict we’ll see in 2020:

● More headsets with built-in cameras that enable users to interact with the
world around them
● PSVR support for WebXR to bring 5 M+ users to WebXR
● More stable WebXR API and more performant frameworks that increase the
viable scope of WebXR projects
● Jump in hardware adoption through launch of Half-Life: Alyx
● Better avatar tech to provide players with immersive identities
● E-commerce use cases in VR/AR to provide a unique experience for buyers

@elijah_tai
Thanks for
reading!

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