Will VR Go Mainstream? And what does that mean?

Oculus Mistake

Canada’s Globe and Mail just published an article with the title: Facebook’s massive Oculus mistake: VR can’t go mainstream. I agree with some of that headline…but not the rest!

1) I agree that VR immersive headsets such as Oculus will not be ubiquitous. Too many people will not want an experience that shuts out the rest of the world while gaming or watching video or being on social media. This is almost certainly not the next smartphone or tablet market.
2) On the other hand, if only 10% of global households buy a VR headset for at least occasional use, that is 100 million units. This will be a premium product, so call it a $500 average selling price. That’s a $50B market over the next decade, or probably no more than $10B in any given year.
3) That is utterly tiny compared to sales of smartphones, TV sets, tablets or even PCs: each of which will be over $100B in annual revenues globally in 2014.
4) But it is not nothing, and growing markets that have peak sales of $10B can still be very attractive and important.
5) None of which means that what Facebook paid was the right price, too high, too low or whether this was a good idea or not! I don’t make those sorts of calls.
6) But in a technology world of “mass niches”, the fact that VR won’t go mainstream doesn’t necessarily mean that Facebook’s acquisition was a “massive mistake.” That MAY turn out to be true, but we won’t know for a few years.


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