Please ensure Javascript is enabled for purposes of website accessibility

Forget Facebook: Here's a Better Virtual Reality Play

By Chris Neiger – Apr 13, 2016 at 2:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sony is poised to take the lead in virtual reality.

 
Image source: Sony. 

The virtual reality (VR) market is fighting an uphill battle. As of right now there are just 8 million PCs that can handle true virtual reality graphics processing. The tech is so detailed and immersive that 99% of computers on the market this year won't be able to handle true virtual reality.  

And that's bad news for Facebook's (META -1.86%) Oculus. The company unveiled its $599 Rift headset recently, and it's probably one of the best on the market right now, but it needs a powerful PC to run on.

But that doesn't mean that all companies will have to wait for PCs to catch up. Sony Electronics' (SNY -3.72%) PlayStation 4 console is already selling like gangbusters (over 36 million so far, compared to Xbox One's 20 million), and the company is on the brink of selling its recently debuted PlayStation VR headset. 

Sony's VR advantage is pretty significant: tens of millions of its consoles are already capable of handling its virtual reality headset, it's cheaper than the Oculus Rift, and there's a long line of developers and game makers already producing content for it.

Virtually unstoppable 
Think about this for a moment: If you wanted to sell a device that allows people to play their video games in new and exciting ways, who would you sell that device to? You wouldn't go to people who only play games occasionally. You'd target gamers, of course.

And that's the beauty of Sony's PlayStation VR. The hardware is targeting the exact people who already want to play games, and it works with the equipment (the PlayStation 4) they already have.

But even among PC-owners who have VR-capable machines, most would prefer a Sony virtual reality headset over a PC virtual reality headset. 

If you don't believe me, check out what the Gamer Network found when it polled a largely PC-gaming population about whether they'd be more willing to buy a headset for their computer or a PlayStation VR headset. The survey found that while 75% of the gamers owned a PC that was VR-ready, only 15% of them wanted a VR headset for their computer. But among the same group, nearly 20% said they wanted a PlayStation VR  -- and only 35% had a PlayStation 4 right now. 

So even among people who have PCs that are ready for VR, it appears that Sony's VR headset is still in higher demand, according to Gamer Network. 

And then there's the price. The PlayStation VR will sell for just $399, a full $200 cheaper than the Rift. And users can pre-order a PlayStation VR launch bundle right now that includes motion-sensing controls, cameras, and the headset for $499, which is still $100 cheaper then the Rift's headset-only price. 

And the final key advantage for Sony is content. The Oculus will have to convince developers that it's worth all the time and effort to invest in creating content for a device with a high price tag and limited appeal. Sure, Oculus has its own content creation studio, but that can only take it so far. 

Meanwhile, Sony says it already has 230 developers and publishers making content for its PlayStation VR. 

How this helps Sony's business
Sony's in the midst of refocusing its attention on its businesses that are actually growing. That means you'll see the company pouring more time and resources into its gaming business. The PlayStation VR could be the first evidence of this, and it's likely a very good thing. 

Sony's fiscal third quarter 2015 gaming revenue increased by more than 10% year-over-year to $4.89 billion. That means that Sony's gaming division brought in roughly 23% of the company's total revenue for the quarter. 

The company is focusing its attention on gaming just as virtual reality costs and technology are becoming mainstream for gaming consoles. And with VR expected to grow into a $70 billion market by 2020, Sony is poised to reap the benefits of this gaming evolution. 

Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sanofi Stock Quote
Sanofi
SNY
$36.97 (-3.72%) $-1.43
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$137.79 (-1.86%) $-2.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.