VR may still be young, and adoption still low compared to the world of traditional gaming, but it can’t be ignored that mounting sales of the Playstation VR headset—effectively a very expensive accessory for the PS4—is adding up to considerable revenue. In an era where Sony appears to have a significant lead in console sales already, and with PSVR sharpening the system’s competitive edge, pressure is mounting for Microsoft to figure out its Xbox VR strategy.
Moving the Needle
Gamespot reports Sony’s latest PS4 sales figures (including both PS4 and PS4 Pro) at a whopping 67.5 million units. Microsoft meanwhile hasn’t publicly revealed their Xbox One sales figures for some time, though estimates earlier this year put it somewhere between 30 and 40 million units. Competitively, that’s a massive gap. And it isn’t helping Microsoft that, for gamers on the fence between the two consoles, PlayStation has a big fat check mark in the VR column while Xbox doesn’t.
It isn’t just the weight of VR support that could be furthering PlayStation’s edge, but there’s revenue to be considered too. PlayStation VR’s sales figures might not be huge relative to PS4, but it’s an expensive device—often even more expensive than the console that powers it—and it adds up to something considerable.
VR and AR intelligence firm Greenlight Insights estimates that Sony has sold 1.5 million PlayStation VR headsets through October 2017. The headset is sold in several different bundle configurations ranging, in the US at least, from the $500 Launch Bundle to the now discounted standalone headset at $290. Roughing out a $350 average selling price (which is conservative given the generally higher prices in Europe), we can estimate that Sony has pulled in some $525 million in hardware revenue. Software revenue on top of that stands to add considerably more.
That’s not a huge amount in comparison to revenue from the PS4 console itself, but it’s definitely a needle-moving figure—and a new revenue stream that Xbox isn’t tapping—that furthers Sony’s console lead. Pressure is mounting Microsoft to figure out how its VR plans pan out on Xbox.
A False Start for VR on Xbox One X
Back when it was introduced at E3 2016, Microsoft made a clear point to talk about how that the Xbox One X (at the time called ‘Project Scorpio’) would “lead the industry into a future in which true 4K gaming and high-fidelity VR are the standard, not an exception.” It was even announced that Fallout 4 VR would be coming to the system.
Hardly more than a month later, Xbox head Phil Spencer was giving mixed messages about VR support on the Xbox One X. In 2017 it became clear that the console wouldn’t have any type of VR support for its launch next week, and Microsoft hasn’t even said whether or not we’ll see VR on the Xbox One X in 2018.
The marketing blunder is particularly odd, as Microsoft has executed an impressive rollout of their ‘Windows Mixed Reality’ VR platform on the PC side. Last month saw the launch of Windows VR headsets from a slew of PC hardware vendors, and a big update to Windows 10 which bakes VR directly into the operating system.
With the Xbox One X purportedly running Windows 10 underneath the hood, and Microsoft continuing to push their ‘Universal Windows Platform’ (which encourages developers to build apps which are cross-compatible with any Windows 10 device), the writing is on the wall for Xbox One X to get roped into Microsoft’s Mixed Reality platform at some point. The big question is: when?
In a candid interview earlier this year, Xbox Head Phil Spencer suggested that Microsoft was staying away from VR on Xbox because they didn’t feel that the family room is a good place for tethered headsets. He figured at the time that the industry is “a few years away [from a wireless VR solution].”
But if Microsoft is planning on waiting “a few years” for wireless tech before rolling out a VR offering on Xbox, they could be handing away a couple billion dollars in extra revenue to a competitor which already has a sizable lead.
Greenlight Insights and Road to VR co-author the 2017 VR Industry Report, the Fall Update edition launches soon with the latest insights into the state of the VR industry.