Cause of Failure

The startup themselves admitted that they were ahead of their time with a product whose market was never fully developed. They expected the VR market to grow at a much faster rate, but it didn’t happen at the speed they expected.

The virtual reality headset market had four consecutive quarters of decline before it returned to show signs of growth in Q3 2018. Enterprises have opened themselves up to adopting VR for its uses in different industries like healthcare, education, manufacturing, and firms that want to provide a different customer experience. But consumers haven’t cozied up to it because of its steep price and inability to understand how to use it. In other words, VR hasn’t gone mainstream yet.

Vreal’s failure looks more like collateral damage to the downward slide that the VR industry faced. It just wasn’t time. Its founder, Todd Hooper, has founded and operated a lot of companies in the entertainment space, including gaming. It looks like he had the right set of skills to win at a startup in this space. Vreal is the story of a company that was in the right place at the wrong time.

Vreal’s competitor Virtalis develops visualization systems for defense, construction and military sectors. This is an indicator of how a product pivot could have saved Vreal. Since there were very few VR headset manufacturers at that time, like HTC, Oculus, Samsung, Xiaomi, and Sony, the price of these products wasn’t affordable for the majority as well. The fact that VR headsets weren’t cheap (they still aren’t) just added to Vreal’s problem as they insisted on having the VR hardware to be able to enjoy the content thus limiting their reach.

Also, remember that Vreal operated in a sub-niche with a product that wasn’t widely adopted yet. There were just too many things that didn’t fall into place for Vreal to succeed. The adoption of VR technology will not die down as it holds significant potential for the long-term. We will soon see more startups in the VR headset space, especially for the gaming fans.



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