When Oculus temporarily dropped the price of its Rift + Touch bundle to £399 to kick off its Summer of Rift sale at the start of July, there were plenty of critics who saw it as another desperate attempt to drum up sales. After all, it had only been four months since the virtual reality headset maker had announced its first major price cut – bringing the bundle down from £799 to £599 – and according to the latest worldwide shipment data, the headset was still lagging behind its main competitors.
According to a recent IDC report, the Rift shifted approximately 99,300 units in Q1, making up just 4.4 per cent of the world’s total VR and AR headset shipments. The Vive, meanwhile, had managed to ship 190,900 units (8.4 per cent), while Sony’s PlayStation VR stood at around 429,000 units (18.8 per cent). Admittedly, all three major headsets were outshipped by Samsung’s mobile-based Gear VR with 21.5 per cent of Q1’s total, though that’s a very different proposition. Oculus’ VP of content Jason Rubin remains unfazed by the Rift’s performance.
“It’s been a great first half of the year for us,” he tells MCV. “Our confidence in our content is way up, and the entire organisation really believes that content is what’s going to drive VR into homes and into the mass market.
“We’ve been kind of tepid up until now, because when we launched VR, there was no content at all. But we recently launched an open beta of Echo Arena, which has probably had the best reception of any title we’ve launched to date in the community. So we’re really feeling that our content is hitting at full cylinders, and because of that, we feel very confident that we can move past the early adopters and lower the barrier to entry so a more casual audience can come in.”
Allowing people to test it in the marketplace in short bursts is a big part of how VR’s going to move into the future.
Jason Rubin, Oculus
Indeed, Rubin tells us the Summer of Rift sale has been a great success for Oculus, both in terms of hardware shipments and overall software sales.
“Our hardware sales are strong after the last price drop. Every dollar isn’t an equal dollar. This $200 drop is a bigger deal than the last $200 drop. It’s not a linear progression down to zero. You end up at a place where people say ‘Oh, this is something I can totally afford,’ as opposed to ‘I’m [still] thinking about this because it’s a large purchase’.”
He continues: “VR usage over the summer has gone up. The video game industry generally tends to be in somewhat of a doldrums [in the summer], but we haven’t found that in VR. We’ve found a lot of people are buying multiple pieces of software, and that’s yet another reason to throw the hardware out there at a very reasonable price and bring in even more people.
“We think that [a £399] price point is very mass market. It’s been proven on other high-end VR systems that are succeeding right now, and we think with the best library in the business, that now’s the time to do this and really drive people into high-end VR.”
Rubin notes he’s also seen an “extremely tight” adoption for Oculus’ Touch controllers.
“Touch is catching up with the Rifts that didn’t have Touch going in, and engagement – how much usage people have, how much they spend in the store, how many times they come back each week to VR – increases with Touch,” he says. “Touch, and your hand presence, is a kind of magic piece of the formula for VR, so going forward we really think of ourselves as Rift+Touch, it’s all one word.”
Multiplayer games in particular are key to growing a successful user base, says Rubin, but that doesn’t mean current hits like Overwatch or Call of Duty would necessarily translate into instant VR success stories.
“Competitive titles are so important because they have that infinite gameplay that can occupy hundreds of hours of somebody’s entertainment time. However, there are limitations, locomotion for example, that a lot of TV-based multiplayer games rely on, but which we can’t simply port over into VR.
“As we’ve gone through time, though, we’ve learned how to have locomotion and do things in VR that are working, and I think Lone Echo [the single player version of Echo Arena, pictured] is a perfect example of that. It’s a title that let’s you move around, but in a very specific manner. Zero gravity allows you to pull yourself through using your arms, which tends to mitigate the locomotion challenges of VR, and we’ve found anecdotally as we were testing that people are really comfortable in there and are really enjoying the title. So Lone Echo is a big win for us from a technology and learning standpoint.”
Simply creating accessible titles isn’t enough, though, as consumers also need to know whether they can actually tolerate virtual reality before they buy a headset, regardless of how much it costs. For Rubin, this means that location-based VR centres are now more important than ever.
“It is a big part of the way that people experience and understand VR for the first time,” he says. “It’s very hard to explain to someone who hasn’t put on a VR headset what immersion really means, because it sounds like one of those buzzwords like ‘extreme’ that you just throw out there and it doesn’t really have anything behind it. But immersion is a big part of VR, and you have to see it in person.
Lone Echo is a big win for us from a technology and learning standpoint.
Jason Rubin, Oculus
“Even at $399 [£308], people aren’t likely to go out and purchase something they don’t understand, so allowing people to test it in the marketplace in short bursts is a big part of how VR’s going to move into the future. We’ve been very aggressive, especially in North America, in doing that on our own in retail locations – for example, in Best Buy, we have a demo that’s free – and we’ve found that the intent to purchase VR coming out of one of those demos is definitely higher than it was going in. So arcades are going to be a big part of VR’s long-term adoption.”
There are still a few hurdles that location VR centres need to overcome, however, with Rubin noting the demand of getting users in and out of the headset quickly as being of paramount importance.
“Many of the titles that we have now work perfectly well and will really excite people at location-based theatres. The challenge is that, unlike the home user, the location-based user can’t have a long training sequence, because effectively they’re then spending a good deal of their money training themselves for something they never get to do. There are a lot of VR games spending ten to 15 minutes easing you into the gameplay before they actually throw you into the game, and that doesn’t work if you’re renting for half an hour, because you feel like you didn’t really get there. So the games themselves work, but we probably want to modify parameters around it, so that you can get into and out of it more easily.
“Staying in [a game’s ecosystem] becomes a big question. Each arcade has a different way of handling it. Do you create a user account to travel with you throughout the Oculus community? Do you set up a user account before going into an arcade?
“There are challenges, but the fundamental gameplay of the titles that we are creating is fine for the arcade. The hardware works; it’s getting the things round the edges to work for our community.
Summer of Rift has clearly been a success for Oculus, then, and Rubin tells us it’s likely we’ll be seeing more of these sales events from the company going forward.
“We, as a Facebook company, are experimenters,” he explains. “We believe in learning through data, and we believe in learning through testing and seeing what works.
“We’ve always known, and we’ve been very clear, that VR was going to be a challenge to get into the mass market, but that it was inevitably going to succeed in the mass market. So, as a company, we tend to test the waters with sales.
“We’re constantly updating our core experiences, our core apps, everything else, on a monthly cadence, and it really is an experimentation process. Unlike the eighth, ninth, tenth iteration of a cell phone, we don’t have that base understanding of what the average mass market user’s going to do with it, so we have to keep experimenting. We know we will get there. We are 100 per cent confident VR is part of the psychological entertainment future. We just don’t know what exact road we take to get there, so these experiments are a big part of what we do.”
For now, though, Oculus is still seeing the biggest amount of growth in the US. Europe, however, is “quickly becoming a massive part of our business,” says Rubin.
“Europe has been a big market for us. We started stronger in the United States, because we’re a US-based company, but Europe is becoming a bigger and bigger part of our business going forward.
“The price drop [happened] simultaneously around the world for all of our retail partners and online partners internationally, including Europe, so we really do consider [the region] to be a core part of our business.”