Since the advent of the Quest series of headsets, the VR game market seems to have been injected with a shot in the arm, and its development speed far exceeds that of the Rift era. From Quest 1 to the present, it has been about 4 years. Where is the VR game market now? At GDC 2023, senior VR game studio and publisher nDreams announced a series of data, noting that its sales have doubled compared to 6 years ago, and will continue to see greater growth in the future.
Viewing the VR game market from the perspective of VR developers may allow us to better understand the current market situation and future development trends. At the GDC event, nDreams also predicted the sales of headsets such as Quest and popular VR games. It believes that the revenue of “Beat Saber” may have reached 300 million US dollars, which is quite a considerable amount. And its success also represents the potential development space of future VR games. In addition, nDreams CEO Patrick O'Luanaigh also believes that the growth trajectory of Quest 2 is close enough to Xbox that it may even surpass Xbox in the near future.
The following is a more detailed content of this GDC speech, please take a look if you are interested:
It is understood that nDreams has entered the VR industry since 2013. In 2006, there was only one employee. Now the company has 230 employees (expected to grow to more than 300 by the end of the year), and it has 4 studios. Previously, he has developed and published a number of popular VR games (approximately 13-15 models), including "Phantom: Covert Ops", "Far Cry VR", "Little Cities" and so on. Currently, the company is also developing a VR game based on Sony's film IP: "Ghostbusters: Rise of the Ghost Lord", which is expected to be launched this year.
O'Luanaigh said: 2023 is an exciting year for VR. The industry has just entered the growth curve, and many big things will happen. It is also predicted that seven new mainstream VR headsets may appear on the market this year, including new PC VR. And some super manufacturers will also enter the VR industry, so this year is an important year for VR hardware.
Advantages and disadvantages of VR at this stage
Due to the complex settings of the early PS VR and PC VR, it brought users a threshold of use, and the experience was not ideal. However, VR boxes and Rift CV1 lack 6DoF handle positioning, making it difficult to achieve rich VR game interaction. In contrast, the performance, configuration, and experience of PS VR2, Quest 2, PICO 4, Vive Focus and other VR headsets have been upgraded a lot compared to previous VR headsets.
Advantages: 1) High-quality VR content has appeared; 2) The market has seen growth visible to the naked eye, and big game companies, publishers, and IPs have begun to pay attention to VR; 3) The prospect of VR/MR is becoming more and more clear; 4) VR can bring Come to a game experience that is different from PCs, consoles, and mobile phones. It can amplify emotions such as fear, awe, excitement, and love, and immerse people in it.
Disadvantages: 1) Market growth takes time, and some VR developers may take 10 years to start making a lot of money; 2) Many people’s impression of VR is still in the era of VR boxes; 3) New technologies take time to perfect, and the size of VR headsets is still small 4) There are not enough VR hardware manufacturers in the market, and the main players are Sony and Meta.
In addition, based on publicly disclosed data and the number of store reviews, O'Luanaigh predicted the sales and sales of several VR games, of which "Beat Saber" is the best-selling, with an estimated sales of 6 million copies (sales of about 300 million U.S. dollars level), followed by "Half-Life: Alyx", which is expected to sell 1.7 million copies, with sales of approximately $60 million. And "Among Us VR" has sold about 1.3 million copies in only about 4 months since its launch, with an estimated revenue of 12 million US dollars. This is enough to illustrate the growth potential of VR games at this stage.
Compared with 6 years ago, the income level of nDreams has increased several times, and it is increasing year by year. O'Luanaigh predicts that it will further double from 2024 to 2025, and this growth trajectory is basically in line with the status quo of the VR industry.
Current status of VR industry
According to O'Luanaigh's forecast based on online data, the sales volume of PS VR1 is more than 7 million units, while the sales volume of PICO 4 is close to 1 million units, and the shipment volume of headsets in the entire PC VR market is about 9 million units. The sales volume of the Quest series of headsets is 20 million units, which is already a public figure.
He also pointed out that most PS VR1s are probably no longer used due to high user resistance. However, sales of the PS VR2 seem to have exceeded expectations, and Sony believes that its sales will be expected to surpass those of the PS VR1. O'Luanaigh believes that as the price of PS VR2 falls in the future, there is still room for its sales to rise.
Comparing the sales of Quest 2 and game consoles, from the end of 2020 to the end of 2022, the sales trend of Quest 2 is close to that of Xbox Series S/X, and even slightly higher than Xbox most of the time. If the Xbox market is big enough, the Quest 2 market has reached a similar level. In addition, compared with mainstream game consoles, VR updates and iterations are faster. With subsequent technology upgrades and optimizations, the VR headset market will continue to grow.
Practitioner Survey
In order to further understand practitioners' views on the VR game industry, nDreams surveyed 25 VR practitioners (including CEOs and senior developers of VR companies in North America and Europe, etc.) to understand their views on VR and the VR market. For example, the respondents in the survey answered the following six questions:
1) Do you believe that the VR game market will surpass the console game market?
Some people believe that VR games will surpass console games, but it will take a while. Some people also believe that when AR and VR are popularized and 2D content is upgraded to 3D, VR games may surpass console games. Some people believe that the development trajectory of VR games is close to that of console games, and may reach the same scale as console games in the future. Of course, some people think that the application scenarios of VR are not limited to games, so VR games should target mobile games instead of console games.
2) What are your expectations for the future of VR?
Respondents believe that VR can allow developers to fundamentally reimagine game design and allow players to feel immersive stories. Some people also believe that VR brings more room for breakthroughs in game design, applications, and user experience. Some people expect that cloud computing can reduce the unit cost of VR hardware.
O'Luanaigh pointed out that the future of VR is already in sight, and the VR market has reached the level of game consoles, which is exciting.
3) What are the major challenges that VR still needs to deal with?
- People have negative preconceived impressions of VR;
- An active consumer market allows large-scale VR games to be profitable. The current budget of VR games has reached between 10 million and 20 million US dollars, but there is still a considerable gap with AAA PC games, so the VR market still needs to continue to develop;
- Hardware cost, size, and weight also need to be optimized to further reduce the barrier to entry, reduce setup and content loading time;
- VR is unique and should not be compared to PC, game consoles, mobile devices, the best VR games are designed specifically for VR, but copied or ported from other platforms.
4) The biggest misunderstanding of VR from the outside world
- VR is not only for games, but also for watching movies, socializing, etc.;
- VR box is not real VR, too many people have not experienced high-quality VR equipment;
- The VR market is not niche, it is a thriving ecology;
- The main users of VR are not just teenagers. The largest age group on Quest is between 25 and 34 years old, and another 20% of users are over 45 years old;
- There is a lot of great content for VR, and it's growing.
5) Will F2P (free-to-play online games) become the most important VR business model?
F2P games perform well on VR all-in-one machines, but 3-4 of the respondents believe that VR games can start from the GaaS model in the short term. With the continuous enrichment of content and the growth of user base, there may be opportunities to achieve F2P. This model is expected to require a user base of hundreds of millions of people. Some people also believe that F2P still has room for profit in VR at this stage, and may even become an important part of the VR ecosystem in the future.
At present, nDreams already has a dedicated studio dedicated to the development of F2P VR games. It is estimated that within 2-3 years, F2P VR games are expected to develop.
6) What impact will Apple's entry into the VR market have on VR games?
Some respondents believe that the new competition is a good thing, and a big brand like Apple is expected to change people's perception of VR technology. Others believe that Apple's entry into any market will bring that market into the mainstream. Of course, just like the first-generation iPhone, Watch and iPod, the initial shipments of Apple VR headsets may not be very large, but after a period of development, its user scale will also grow rapidly.
In short, O'Luanaigh believes that VR has left the stage of hype and reshuffle, and will start to embark on a growth curve. At the same time, the shipments of Quest series headsets are expected to surpass Xbox. Reference: GDC