Oculus’ Botched Launch Harms The VR Ecosystem

J.P. Gownder
Vice President, Principal Analyst
April 12, 2016

April 12, 2016: The day Oculus updated its Rift shipment timeframe for customers. As has been widely reported, Oculus customers face widespread months-long delays in the deliveries of their virtual reality headset purchases. To add a personal anecdote, I ordered within the first 5 minutes of the pre-launch window (once the web site started working, which it didn’t at first), and my Rift shipment has been delayed from March 30th to “between May 9 and 19th,” assuming Oculus actually succeeds in meeting its new dates.

While my personal Rift delay is merely an annoyance, the botched launch has real repercussions for the VR ecosystem. Oculus’ delay:

  • Hurts developers of games and apps. The diversity and depth of the VR developer ecosystem is impressive. While many developers focus on games – logically enough, since that’s a key early adopter demographic – others offer applications ranging from clinical treatments for PTSD to collaboration in virtual spaces. The common denominator? None of these developers are making money if there are no headsets available. And while many apps can be ported to other platforms, Oculus has been the centerpiece of many developers’ high-end VR efforts.
  • Hurts media startups and innovations. Media, too, sees a potential loss. While some media companies go the route of the New York Times and focus on Google Cardboard phone-based VR, others are counting on developing truly immersive experiences that simulate presence. Studio Jaunt VR has an Oculus app that, again, won’t be addressable until customers receive their Rifts.
  • Helps HTC Vive. On the flip side, Oculus’ main competitor in high-end VR, the HTC Vive, faced minor launch problems of its own. But these were based in payment processing, not hardware problems. Why? HTC is a well-established hardware vendor with many smartphone, wearable, camera, and tablet product releases under its belt. Though priced $200 higher than the Rift, both devices require a ~$1,000 PC. For early adopters, the extra $200 won’t necessarily be material, and the Vive has two other advantages anyway: It ships with hand controllers (which Rift won’t get until later this year in Oculus Touch… again assuming they can execute on that timeframe) and base stations for tracking the contours of a room.

In fact, the Rift launch fiasco should never have happened. The official statement cites an unspecified “component shortage,” but usually such contracts are locked down many months in advance. Oculus has had 2.5 years to plan for this launch, so there’s really no excuse.

While the long-run viability of VR won’t be automatically impeded by the launch debacle, we’ll keep an eye on this situation to see if it improves. Oculus remains the progenitor of the modern VR movement, and a strong Rift in the marketplace (along side the HTC Vive and, later, Sony Playstation VR) will be a key precondition for market takeoff in high-end VR.

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J. P. Gownder is a vice president and principal analyst serving Infrastructure & Operations Professionals. He covers innovation in the context of disruptive devices — from PCs to mobile devices, augmented and virtual reality (AR/VR), digital signage, and robots. Onalytica named him one of the five most important people in the world in the area of wearable computing for 2015. Follow him on Twitter at @jgownder.

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