Virtual reality could be one of the most disruptive technologies under development today, with the potential to impact education, training, and entertainment. But the percentage of Americans who own any kind of VR headset is still in the single digits, and less than 1% have a fully immersive headset, so there's a long road ahead for the industry.
Despite the relatively slow pace of VR adoption so far, the technology hit some notable milestones recently. Sony's (SONY 0.22%) PS4 VR headset surpassed 2 million units sold, adding to the 1 million or so HTC Vives and Facebook's (META -0.71%) Oculus Rifts that have been sold.
Those three companies are the ones to watch as VR grows. But here's where matters stand today.
The HTC Vive was the hottest high-end headset when it was launched in spring 2016. It runs games on Valve's Steam platform, which is a favorite among gamers, and had the best technology of the early headsets.
Where the HTC Vive falls short is on the ease-of-use front. Users need to set up sensors in the corners of a room, using mounts that most homeowners or businesses would also have to install. There's also the challenge (both technical and aesthetic) of running cords and cables all over a room.
HTV's Vive isn't without its flaws, but it was an industry pioneer and showed the value of VR at the high end of the market.
Oculus (purchased by Facebook back in 2014) introduced the Rift about the same time the HTC Vive was announced, but it was something of an incomplete product. Handheld controls weren't introduced until late 2016, and its front-facing sensors somewhat limit the ways it can be used.
But Oculus took a huge step forward in 2017 when it lowered the price of Rift to $399. It reportedly shipped 210,000 units in Q3, topping the Vive's 160,000 units.
What investors, consumers, and developers should get excited about are Oculus' 2018 plans. The Oculus Go is on track to arrive next year -- a simple, self-contained headset priced around $200, which could make VR accessible to the masses. Better yet, the company is working on an untethered headset with Rift-type capabilities -- the prototype is called Santa Cruz -- which is also expected sometime in 2018. With these new products, Facebook has a bright future in VR.
The surprising leader in the VR race so far is actually Sony. Sales of its PS4 VR headset recently topped 2 million units, leading the high-end VR market. Sony has quietly built the biggest platform for high-end VR, and given the 70 million PS4 consoles it has already sold, it could grow further.
One disadvantage Sony could have going forward is that its headset's tie to the PS4 may turn from an advantage to a weakness. Standalone headsets from HTC and Oculus will untether the VR market from any console or computer, which should open up the market to non-gaming consumers.
We're just scratching the surface of virtual reality's potential
There are only a few million high-end VR headsets in consumers' hands today; such devices are still years from widespread adoption. But the companies that can build the technology and platforms that take it VR mainstream will have a multi-billion dollar opportunity ahead of them. Facebook's Mark Zuckerberg has set a goal of getting VR into the hands of 1 billion people -- a market hundred of times larger than the current one.