Don't expect Microsoft's next-generation console, Project Scarlett (now known as Xbox Series X), to put much of a focus on virtual reality. Xbox boss Phil Spencer said in a new interview with Stevivor that Microsoft is building the new console based on what fans are asking for--and "nobody's asking for VR."

Spencer said in the interview that he has a number of issues with VR as a platform, beginning with the fact that he sees it as an "isolating" technology that separates people instead of bringing them together. Virtual reality technology may one day explode in popularity, but for now, it is a niche market, Spencer said, so the company doesn't plan to focus on it.

"I have some issues with VR--it's isolating and I think of games as a communal, kind of together experience," Spencer explained. "We're responding to what our customers are asking for and… nobody’s asking for VR. The vast majority of our customers know if they want a VR experience, there’s places to go get those. We see the volumes of those on PC and other places."

Spencer added that VR as a market isn't big--"nobody's selling millions and millions" of VR headsets, the executive said. This may one day change, but for now, Microsoft has no plans to focus on VR for its new console.

Microsoft originally had plans to support VR on an Xbox platform. When Microsoft announced the Xbox One X back in 2016, the company said the console was VR-ready, though nothing ever came of this. In 2017, the Xbox website removed mention of virtual reality support for Xbox One X.

Spencer has said he believes VR will eventually "find its spot" in gaming--but it might not be soon. "I don't think the creators in the game space have yet found--well, they haven't obviously perfected the craft of building VR games," Spencer said. "It's so early; I think we're a couple of years before we'll really see that hit mainstream."

In a thread on Twitter, NPD analyst Mat Piscatella said he thinks Spencer has made an astute observation about VR. He added that the revenue from VR games spending so far has amounted to a "rounding error of [a] rounding error."

The data suggest that Phil Spencer is spot on with his assessment of VR gaming. Perhaps someday this market can develop, but it's been years and the overwhelming majority of games consumers just don't care. Rounding error of rounding error for games spending, tiny niche. — Mat Piscatella (@MatPiscatella) November 26, 2019

It's cool tech... VR gaming pushes boundaries and can provide experiences no other platform can. But it also has severe limitations when it comes to pricing, play pattern and play environment most will never be able to adopt into their lifestyles. Definition of permanent niche. — Mat Piscatella (@MatPiscatella) November 26, 2019

Of all the possibilities for gaming's future, the market opportunities are in breaking down barriers for players, making it easier for people to play and to connect with others. VR, by it's very nature, doesn't work that way. VR can be a successful niche, but a small one. — Mat Piscatella (@MatPiscatella) November 26, 2019

Hundreds of millions have been invested into the VR gaming market... thinking of the opportunity costs, what all those people could have made with all that investment, and all the money those products could have made... makes my money loving heart hurt. — Mat Piscatella (@MatPiscatella) November 26, 2019

Spencer and Piscatella are not alone in doubting VR as a commercially viable platform currently. Cyberpunk 2077 developer CD Projekt Red recently said it's not afraid to launch the game close to the VR-exclusive Half-Life: Alyx because VR is a teeny tiny niche of a market. Valve is only releasing Half-Life: Alyx as a VR game because it wants to boost VR hardware sales, according to CD Projekt Red.

Xbox Scarlett launches in Holiday 2020 with Halo Infinite as a launch title.