VR is here, but it hasn't really arrived -- yet

Virtual-reality headsets from Facebook, Sony, Google and more have hit the market in the past year. But will the technology really stick?

Ian Sherr Former Editor at Large / News
Ian Sherr (he/him/his) grew up in the San Francisco Bay Area, so he's always had a connection to the tech world. At CNET, he wrote about Apple, Microsoft, VR, video games and internet troubles. Aside from writing, he tinkers with tech at home, is a longtime fencer -- the kind with swords -- and began woodworking during the pandemic.
Ian Sherr
5 min read
James Martin/CNET

Cool new headsets? Check.

3D interactive, immersive experiences? Check.

Customers? Um.

There's been a lot of hype around VR over the past year, but for all the money being thrown at the virtual-reality market from Facebook , Google and Microsoft , among others, it's still not clear whether the next major change in how we think about computers is going to be driven by VR.

The tech itself seems almost otherworldly. When you strap a pair of goggles onto your head, you put screens so close to your eyes that your brain is tricked into believing what you're seeing. Want to pilot a starship through an epic space battle, walk alongside the dinosaurs or watch the latest superhero movie on a monstrous screen in a theater on the moon? You can do that today, in VR. Cool, right?

And that's why important tech thinkers, like Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai, say VR is the next big thing.

There are a lot of reasons they may be right. Cool factor aside, VR gear is cheap. Google's Cardboard headset, which true to its name is made of relatively cheap paper parts, is often given away for free by Hollywood studios promoting movies or by wireless carriers trying to attract new subscribers. Google's Daydream headset, released in November, is $79, not including the cost of a high-end phone needed to power it. Samsung , meanwhile, has sold a similar phone-powered headset called the Gear VR for $99 for the past year.

Sure, there are more expensive headsets too, like the $799 HTC Vive , which includes goggles that attach to a high-end computer (about $1,000 or more) to power its sharper screen and controllers that mimic your hand movements in the virtual world.

Given that there are a bunch of competing headsets out there, at different prices, you'd think VR would be everywhere.

Enlarge Image

The PlayStation VR has one of the biggest names in the video game industry behind it.

Sarah Tew/CNET

That doesn't seem to be the case. None of the companies selling these VR systems are sharing how many they've actually sold. Analysts estimate that about 10 million headsets have been sold so far this year. Statista, a data analysis company, says there are 5 million of Samsung's Gear VR units in the wild, and about 3.6 million Rift headsets, the $599 system developed by Facebook-owned Oculus VR.

HTC's Vive clocks in at 2.1 million units, and PlayStation VR , made by video game giant Sony , likely sold 1.4 million of its headsets.

Customers are expected to spend about $1 billion on VR stuff this year, according to consultants at Deloitte, which still refer to the technology as a "niche." Spokespeople from Facebook and Google declined to discuss sales of their respective devices, so all we have to go on are analysts' estimates.

Even so, that $1 billion in expected spending this year is supposed to surge to $30 billion by 2020, according to acquisition advisory firm Digi-Capital.

Sounds like a lot, right? But that's not even close to the smartphone market. People around the world bought nearly 2 billion smartphones last year, according to Gartner, amounting to more than $421 billion in sales. Heck, Apple alone racked up nearly $52 billion in iPhone sales just during the 2015 holiday shopping season.

The bottom line is that VR has some distance to go before it makes a dent in the tech industry.

So what's to come in the next year? Here are four things you can expect.

More advertising

We'll see more TV spots for VR. You've probably seen Google's ads promoting its Daydream headset, so it's not a reach to say there are more to come as companies like Sony, Oculus and HTC persuade developers to create games for their respective devices.

More competition

Microsoft is working with Acer, Lenovo and others to create VR headsets starting at $299. There are also rumors that Apple is looking into the technology. Bottom line: Expect the already crowded field to get even more crowded.

Alternative tech

You may not have even had a chance to try VR, and already there are alternatives out there waiting to hit the market. They're broadly called mixed or augmented reality, which is known simply as AR. This tech overlays computer images on the real world, usually through a pair of bulky glasses.

Ever seen the holodeck on Star Trek? That's what we're talking about.

Imagine walking down the street and suddenly a rock monster jumps out from a tree, and you have to fight it. Or getting directions overlaid on the real world -- think, seeing an arrow giving you directions as you walk. Or never having another computer screen, instead just looking at an email or a web page projected in front of you, as if it were floating in the real world. It's wacky, but it's real. Companies like Microsoft, Google, Apple and a startup called Magic Leap are all expected to bring AR and mixed reality to you sooner than you think.

Enlarge Image

The secretive startup called Magic Leap has opted only to show demo videos instead of showing off its hardware.

Magic Leap

Oh, and before you scoff, analysts say the market for these devices -- which, as a reminder, haven't even reached store shelves -- could be three times the size of the VR industry in the next four years, or $90 billion in sales. Together, IDC estimates 76 million AR and VR headsets will be sold by that time.

That doesn't mean it's all a guarantee. Magic Leap, which has raised more than $1 billion in venture funding, including from big Silicon Valley names like Google and the VC firm Andreessen Horowitz, may not be as magical as some had thought. The company told The Information that some of the key technologies it invented won't find their way into the final consumer product.

Perhaps worse, the company's been building its hype with promotional videos purporting to show the technology in action, but apparently they've been concept videos, not real-life demonstrations.

Magic Leap didn't respond to a request for comment.

Bigger push from the big guys

There are already a bunch of apps out there that can do everything from put you in the pilot's seat during an epic spaceship battle to exploring the ocean's depths in a dive suit. But Facebook and Google plan to invest even more.

For Google, that means continued efforts to bring its suite of apps, such as YouTube and Google Earth, to VR.

Daydream believer: The 15 best Google VR apps you can install right now

See all photos

That's similar to the approach it took with its Android software for mobile phones a decade ago. Teams at the company built and then refined apps for Google's services, helping attract the billions of people who use its site while also offering new designs and technologies for developers to create their own apps.

"We want to start early and iterate as much as possible," said Andrey Doronichev, group product manager of VR products at Google. He was also one of the first Googlers creating apps for Android too. "To make the best services the way we think we can make them, having our own platform to move as fast as we need is very helpful."

One of the things he's focused on: alternative ways to use VR, such as with art and news, in addition to playing games and watching movies. So far, Google has released five VR apps for Daydream, including YouTube and "Arts + Culture." And there are already more than 50 apps total in the app store for Daydream.