Posted by VRBeginnersGuide

A little history…

Things were looking rather grim for Oculus at the end of 2016. SuperData Research estimated there had only been 243,000 Rift units sold verses 420,000 HTC Vive units. Even with Oculus releasing their Touch controllers near the end of the year, it seemed like much of the community had already written Oculus off. The new controllers were supposed to bring the Rift into direct competition with Vive’s Room-scale tech, but launch did not go smoothly. Full room-scale was still officially experimental and thousands of users reported glitches with the tracking.

Oculus Touch Off to a Shaky Start

Storm in a Teacup

This all caused something of a small panic around Rift circles with people suggesting Oculus’ constellation tracking was fatally flawed and would never be capable of room-scale at all. It seemed to be the last nail in the consumer relations coffin for Oculus. The company had already taken much flak for funding exclusive VR titles that could only be played on the Rift, and the Zenimax lawsuit was still casting it’s shadow across the companies future. Vive seemed set to remain king of the PCVR hill and nobody thought otherwise. But Oculus would not go down without a fight.

Why the Vive is as Good as you Think

As quickly as the tracking glitches arrived, they were swept away in a series of patches. The new motion control games came thick and fast. RoboRecall blew everyone’s collective mind. Even Vive users resorted to hacking the Oculus store just to get a taste of what was being called the first AAA VR game. Rift owners found that large area room-scale was achievable with just 3 sensors. Finally, Oculus undercut HTC by dropping the cost of Rift with Touch to just $599USD , a full $200USD less than the Vive . The battle was back on!

At first glance, it may seem the Vive is going from strength to strength. Releasing some cool new trackers to bring more

objects into the virtual world, and the Deluxe Head Strap . There is an eye tracking attachment in development that will allow foveated rendering and the new Knuckle controllers are set to be the new standard with full 5 finger tracking.

But, all of these new upgrades have issues. The trackers will, at best, result in a whole bunch of new peripherals that are only suited to one or two jobs. Eye tracking is great for developers working on foveated rendering, but from a consumer stand point it probably won’t see widespread use in games until a year to two’s time. By then we will be staring down the barrel of VR generation 2. The Deluxe Head Strap will set you back at least $100USD and early adopters found the foam on the back disintegrated in contact with water. Reviews indicate that at best the comfort level only matches that of the Rift. So, that’s $100 to bring an already more expensive product up to the same comfort level as the competitor? Finally, while the Knuckle controllers looks awesome, they are made by Valve, not HTC. Let’s talk about why this is a bad thing.

Steam VR v. HTC Vive

Not everyone realizes that the Vive was actually a joint venture between Valve and HTC. Valve developed Open VR and the Lighthouse tracking system, and Vive builds the hardware. So, for a start the main trump card HTC has, Lighthouse tracking, is not even their tech. The upcoming LG headset, which will shortly be followed by other major brands, will use the exact same tracking technology. The Knuckle controllers will also most likely be compatible with these new systems.

The main implication of this arrangement is that HTC only makes money from selling hardware, the Vive and it’s add-ons. Steam wanted VR to be an open platform and prevented HTC from developing exclusive software to go with the Vive. Recently HTC circumvented this agreement by opening Viveport, an exclusive software environment only accessible on the Vive, similar to OculusHome. But Viveport can only save them if they continue to dominate the market. That will be difficult for two reasons. 1: Other major brands are about to jump aboard the Steam VR train, and 2: Oculus price cuts.

Why You Won’t See a Vive Price Drop

Oculus has a different business model, the Software ecosystem. Their model is all about making money from selling software for the Rift, not selling the Rift itself. This is why Oculus was able to drop the price so drastically less than 12 months after the original release. The more Rifts in homes, the better. HTC on the other hand famously and proudly proclaimed they were selling the Vive for a profit from launch. This would explain not only why many Vive users experience broken hardware (dead pixels, broken lighthouses, shoddy controllers and disintegrating head straps), but also why HTC will never be able to price match with Oculus.

HTC has Been in Trouble for Years

Signs of the End

This is what has happened to the HTC stock price in the past 5 years. It’s not a pretty picture. In August of 2015 their stock price was so low that the company was valued at less than the value of their actual physical Assets. A signal that investors have zero faith in the company’s long-term earnings potential, either in the form of eventually turning a profit or even getting acquired by a larger firm. The price has barely shifted since then. They recently had to sell one of their factories just to keep up funding for VR and with their latest smart phone failing to score a decent slice of the market there is little reason to believe things will get any better any time soon.

We quoted SuperData’s sales estimates at the start of this article. 243,000 Rift units verses 420,000 Vive units. The more

recent numbers, however, are looking quite a bit different. A June 2017 report by Research firm IDC estimates the Rift has sold about 520,000 units, compared with 770,000 of HTC’s Vive. Which this does show the Vive still in the lead. Have a think about what these new numbers mean. If both estimates are accurate, then in the past 6 months Oculus has sold 277,000 to HTC’s 350,000. Much closer numbers than last year. Also, Oculus just announced the new all-in-one Rift package will be set at a price of $499USD, close to half the price of the Vive. With both systems now performing practically the same; how do you think those numbers will look in another 12 months?

We have little doubt that VR is here to stay. The overall numbers just keep getting better and VR’s future is looking to be on very solid ground this year. But with LG, Microsoft, Apple, Acer and ASUS among others about to enter the market, the Vive’s days as Steam VR’s poster boy look well and truly numbered.

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