Virtual Reality ROI? Virtually Nonexistent

Are you ready for a world of virtual realities embedded with brands?  Trust me – I’m not, either, but it seems ad world is getting ready (once again) to embrace the concept, even if consumers aren’t.

For me, virtual reality is not a big market, and there are a number of proof points why.  First off, remember the buzz around virtual worlds like Second Life way back in 2005-2006? Brands were excited by the prospect of creating virtual experiences that immersed their audience directly into the brands, so they set up homesteads to engage with consumers, but the consumers were outnumbered by the brands. The idea is invigorating because of the depth of interaction coupled with the reduced cost vs. real-world experiences, but it still lacked quite a bit of reality.

Second proof point: the “miss” of 3-D TV.  3-D television was supposed to revolutionize the TV experience, but to date it has not caught on. I would argue it’s been completely passed by.  Consumers didn’t want to be immersed in their TV experience for many reasons (clunky interfaces, glasses, etc.) and while 3-D is not the same as virtual reality, it is a stepping stone to get there.



Third proof point: just look at the wave of horrible virtual reality movies.  Anyone remember “Johnny Mnemonic”?

All that being said, I understand the tipping point for VR to be the Facebook acquisition of Oculus.  If Facebook were to start crafting virtual realities as an extension of its social platform, it could change the game for how many people actually see things. Still, from my perspective this is going to continue to be a niche, although potentially large niche, opportunity.

Virtual reality requires a few things that create impediments to mainstream adoption.  First and foremost is technology, which can be pricey.  Those Oculus goggles are not cheap.  Unless hardware costs are decreased dramatically, you are limiting the audience right off the bat. 

Second, VR requires focus and full immersion. You cannot be engaged in VR while multitasking, and most new-media formats are meant to be multitasked.  Mobile is the fastest growing medium and it’s primarily because you use your mobile device while you’re doing other things.  It pairs well with TV and other media, but VR does not.

The other impediment is that VR requires a stationary audience.  You have to be at home, immersed in the reality being presented.  It’s not an intermediary experience, like checking your phone while on the train or in line at the grocery store.  That focus of location, compounded with the required focus of attention, means you have to be committed to VR 100%, and in an increasingly fragmented world that kind of commitment is hard to come by.

I think VR is a natural extension for gamers because most of the criteria mentioned above are typical of hardcore gamers.  They are focused, they are not multitasking, they purchase expensive hardware and they access that hardware at home. 

VR is not something I see taking off big time, so brands diving back into virtual reality need to be careful of their investment, know what the potential truly is, and the timeline for reaching that potential.  Otherwise the results could be much like wave one of virtual worlds: virtually nonexistent.

2 comments about "Virtual Reality ROI? Virtually Nonexistent".
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  1. Nic Mitham from Non-retailer: Provider / Vendor, July 30, 2014 at 2:06 p.m.

    Cory, which Oculus Rift games/experiences have you tried and what do you think of them?

  2. Mary Spio from Next Galaxy, July 31, 2014 at 8:10 a.m.

    I agree that for widespread adoption of fully immersive virtual reality experiences to gain mainstreammass market non-gaming content such as content for sports, music, movie and much more will have to be created along with platforms and devices for consuming content. However to its a misnomer to relegate virtual reality to second life and 3D TV's. There are over 1.35 Billion registered users of virtual worlds and this number is going to continue to grow. The Oculus Rift and other head-mounted devices simply signal the transition of full immersion to a mainstream mass market. More devices are going to enable communication and the ability to interact with your environment even with the devices on.
    Consumer virtual reality like any emerging market will find its place especially given the number of players that have gotten behind it. It's like saying in the early days of the internet that it's not going to take of because of a few bad looking websites. Virtual Reality is going to take off and in a much bigger way than anyone can anticipate, might not be in the next twelve months but it's coming!!!!

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