Microsoft’s press event at gaming conference E3 this week drew the massive attention you’d expect from one of the big three console makers. The substance of that attention, though, wasn’t on new exclusive titles, or even the kludgy branding of the company’s new high-powered Xbox One X console. In fact, Microsoft garnered the most attention for what it didn’t say: what form, if any, its vision for console-based virtual reality will take.
The absence of VR at least shouldn’t have come as a surprise. That’s in part because the company warned a few days earlier that it wouldn’t dive into “mixed reality,” Microsoft's umbrella term for virtual and augmented reality experiences. But it’s also because of a simple truth. The console VR experience isn’t yet good enough to be a must-have feature. If and when it finally is, the Xbox One X will be more than ready for it.
In October of last year, Sony released Playstation VR, a virtual reality headset for its Playstation 4 console. It’s good! It can’t compete with HTC Vive or Oculus Rift powerhouse rigs, but it occupies a comfortable middle ground between those high-end VR experiences and the more casual, smartphone-based approach offered by Samsung’s Gear VR and Google Daydream.
But while Playstation VR has found critical success, its sales indicate that virtual reality only tops the wish lists of a small percentage of console gamers. Sony has moved a million Playstation VR units since October. That sounds impressive, but less so in the context of the the PS4 install base of at least 55 million, according to recent figures from research company SuperData. That puts Playstation VR adoption at about 1.8 percent of its potential market.
That’s not at all intended as a knock on what Playstation VR has achieved so far. But it’s a reminder that for all the promise of virtual and augmented reality, the market for it hasn’t quite materialized.
Why not? Expense, for one. A Playstation VR headset costs $400—the same as a top-end PS4 Pro. (The pricing on either may well change at Sony’s E3 press conference Monday night.) Microsoft appears to have placed a bet, though, that the bigger hiccup is experiential. Specifically, that supporting a console-level quality of VR experience requires a hardline connection between headset and home base. Which means, in practice, an unsightly, inconvenient cord stretching across the living room.
“I think there are just issues with, my TV’s across the room, I’ve got cables hanging out,” Xbox chief Phil Spencer told the BBC. “When I do this on my PC, I’m closer to my PC, that seems to be a more user-friendly scenario today.”
Which makes sense; your roommate’s far less likely to trip over a cable that connects you to your PC than to a console across the room. Well, hopefully.
Let the that cord also serve as a metaphor for VR as a whole, which as an industry—and on consoles especially—isn’t even in its infancy. It's downright umbilical.
“VR will take a couple more years to move from its chicken-and-egg dilemma,” says Thomas Husson, principal analyst at Forrester Research. Playstation VR in particular has a decent number of available games, but not many must-have titles. It’s also been slow to develop broader entertainment experiences, aside from a recently reported Breaking Bad project.
Again, it’s still a million VR units ahead of any other console. That’s worth something. But on the scale Microsoft’s shooting for, maybe not as much as it seems.
In case it’s not clear, just because Microsoft didn’t pay VR any mind during its E3 keynote doesn’t mean the Xbox One X isn’t a virtual reality workhorse. With 4K gameplay and HDR support and a powerful processor, it’ll be able to handle those programs whenever they do materialize just fine.
Of course, the Xbox One X isn’t the only console Microsoft sells. It released the Xbox One S last August, a more affordable model but one still powerful enough to play all of the games Microsoft highlighted for the Xbox One X at E3. And so one simple explanation for Microsoft’s VR dodge comes to the fore.
“The reality is that when VR games and other applications launch on the Xbox platform, it will be on the Xbox One X and on Windows 10 PCs,” says Lewis Ward, analyst with research company IDC. “It doesn’t make sense for them to bring it up, because then they’re going to unleash a can of worms.” Those worms taking the form of angry Xbox One S owners, who likely won’t get to play with the shiny new VR toys.
Microsoft, meanwhile, says its interest in VR rests elsewhere. “We believe that right now a Windows PC is the best platform for mixed reality as its open ecosystem and enormous installed base offer the best opportunity for developers, and Windows offers the most choices for consumers,” the company said in an official statement. “Therefore, our primary focus is making our Windows Mixed Reality experiences a success.”
That may sound like a dodge, but it includes heavy kernels of truth. Think first of the install base alone. SuperData pegs the number of Xbox consoles in use at around 25 million. By 2020, says Ward, the number of Oculus and Vive-capable PCs on the market will be 150 million. Microsoft’s also actively carving out a lower price-point for the market, with “Mixed Reality VR” headsets that work on Windows 10 PCs, with much more reasonable specs, coming available from partners like Acer.
The active word there being partners. After all, between Windows 10 and Xbox, Microsoft has one of the largest digital storefronts in the world. They’ve built it. People will come.
“Microsoft doesn’t need to invest heavily in VR games. If it's running a successful storefront, and offering a platform on which a wide variety of third-party vendors can monetize, Microsoft’s going to be happy, I think,” says Ward. Instead, Microsoft has chosen to invest heavily in Hololens augmented reality, which has use business, medical, and other cases that outstrip the consumer market.
So yes, Microsoft left virtual reality off the stage at E3. It didn’t miss much in doing so, though. The Xbox One X will be ready if—and when—the future of console-based VR becomes the present. In the meantime, it’s refreshing to focus on right now.
