#635: Candid Assessment of the VR Industry from a Leading Indie Developer

denny_headshot-200x200What is happening with the VR industry? Is the adoption and growth still on target to support a vibrant and diverse ecosystem of independent VR developers? Leading headset manufacturers have not been transparent in sharing any specific information, and the analyst data that’s been released have not been a reliable or comprehensive source of data. So it’s been difficult to get an honest and candid assessment about the overall health and vibrancy of the virtual reality ecosystem. But there are a few companies who have some deeper insights into the VR ecosystem, and these are the independent VR development companies who have released best-selling VR titles.

Denny Unger of Cloudhead Games has the unique perspective of having a launch title of The Gallery: Call of the Starseed with the HTC Vive, and then a year and a half later they released the second episode of The Gallery: Heart of the Emberstone. There was a significant dropoff of sales of their second title from the first title, and so Unger has the experience of going from the “Peak of Inflated Expectations” on the Gartner Hype Cycle down into the “Trough of Disllusionment.” He expects that VR will turn the corner within the next couple of years, and that focusing on producing smaller experiences aimed at the location-based entertainment market is a going to a way to survive this temporary winter in the VR market.

Unger says that headset sales are being used as the primary metric for success, however, as an independent VR studio they are more interested in looking at the active attachement rates when doing their own internal planning for the next couple of years. That is, how many VR consumers are using their VR headsets either every day or at least once a month? Versus how many have bought a VR headset, but aren’t using it because the content hasn’t been compelling enough for them?

Unger suggests that the active attachment rates are the more important metric, but no one in the VR industry wants to have a transparent and honest conversation as to how this ecosystem is growing, how to best track and promote the growth, and reflecting on whether or not their strategies are working. Unger suggests that there’s a middle-tier of independent VR developers who have not received a lot of support from the major headset manufacturers, and even the mainstream press hasn’t been investing the time or interest in covering some of these non-AAA tier VR game experiences.

So I had a chance to catch up with Unger at GDC where we have a candid conversation about the state of the VR industry, why he thinks VR games may be in the “Trough of Disllusionment” (it could be in the slope of enlightenment for other VR industry verticals), and some of the things that major headset manufacturers and content funders can do to support this middle tier of VR development in order to have a more robust, healthy, and vibrant VR developer ecosystem.


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