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The Oculus Summer Sale spawns a new competitive analysis

Zenbane
MVP
MVP
A great new article has been published by VRBeginnersGuide.com

Throughout the past 15 months there has been ongoing debate centered around the competition in the VR Industry. At the forefront of that debate is, of course, the quintessential: Rift vs Vive

Everyone has their opinion, bias, and speculation. The lack of "official sales" numbers also forces consumers to rely on alternative sources of information (e.g. surveys, research agencies, search engine statistics).

Yet the Oculus Summer Sale has dropped the Rift down to a price that was promised before its official release (In September of 2014, Palmer went on record for stating that the Rift should reside between $200-$400). Thanks to the lengthy Summer Sale, the competitive analysis has returned to the public eye.

I love the VRBeginnersGuide.com article because it addresses the full spectrum of the Rift/Vive debate, and paints a very clear picture of a reasonably expected outcome.


Is this the Beginning of the End for the HTC Vive?





Things were looking rather grim for Oculus at the end of 2016. SuperData Research estimated there had only been 243,000 Rift units sold verses 420,000 HTC Vive units. Even with Oculus releasing their Touch controllers near the end of the year, it seemed like much of the community had already written Oculus off. The new controllers were supposed to bring the Rift into direct competition with Vive’s Room-scale tech, but launch did not go smoothly. Full room-scale was still officially experimental and thousands of users reported glitches with the tracking.

At first glance, it may seem the Vive is going from strength to strength. Releasing some cool new trackers to bring more objects into the virtual world, and the Deluxe Head Strap. There is an eye tracking attachment in development that will allow foveated rendering and the new Knuckle controllers are set to be the new standard with full 5 finger tracking.
But, all of these new upgrades have issues.

The trackers will, at best, result in a whole bunch of new peripherals that are only suited to one or two jobs. Eye tracking is great for developers working on foveated rendering, but from a consumer stand point it probably won’t see widespread use in games until a year to two’s time. By then we will be staring down the barrel of VR generation 2. The Deluxe Head Strap will set you back at least $100USD and early adopters found the foam on the back disintegrated in contact with water. Reviews indicate that at best the comfort level only matches that of the Rift. So, that’s $100 to bring an already more expensive product up to the same comfort level as the competitor?

Finally, while the Knuckle controllers looks awesome, they are made by Valve, not HTC. Let’s talk about why this is a bad thing.

Not everyone realizes that the Vive was actually a joint venture between Valve and HTC. Valve developed Open VR and the Lighthouse tracking system, and Vive builds the hardware. So, for a start the main trump card HTC has, Lighthouse tracking, is not even their tech. The upcoming LG headset, which will shortly be followed by other major brands, will use the exact same tracking technology. The Knuckle controllers will also most likely be compatible with these new systems.

The main implication of this arrangement is that HTC only makes money from selling hardware, the Vive and it’s add-ons. Steam wanted VR to be an open platform and prevented HTC from developing exclusive software to go with the Vive. Recently HTC circumvented this agreement by opening Viveport, an exclusive software environment only accessible on the Vive, similar to OculusHome. But Viveport can only save them if they continue to dominate the market. That will be difficult for two reasons. 1: Other major brands are about to jump aboard the Steam VR train, and  2: Oculus price cuts.


Why You Won’t See a Vive Price Drop

Oculus has a different business model, the Software ecosystem. Their model is all about making money from selling software for the Rift, not selling the Rift itself. This is why Oculus was able to drop the price so drastically less than 12 months after the original release. The more Rifts in homes, the better. HTC on the other hand famously and proudly proclaimed they were selling the Vive for a profit from launch. This would explain not only why many Vive users experience broken hardware (dead pixels, broken lighthouses, shoddy controllers and disintegrating head straps), but also why HTC will never be able to price match with Oculus.


HTC has Been in Trouble for Years



This is what has happened to the HTC stock price in the past 5 years. It’s not a pretty picture. In August of 2015 their stock price was so low that the company was valued at less than the value of their actual physical Assets. A signal that investors have zero faith in the company’s long-term earnings potential, either in the form of eventually turning a profit or even getting acquired by a larger firm. The price has barely shifted since then. They recently had to sell one of their factories just to keep up funding for VR and with their latest smart phone failing to score a decent slice of the market there is little reason to believe things will get any better any time soon.


Signs of the End

We quoted SuperData’s sales estimates at the start of this article. 243,000 Rift units verses 420,000 Vive units. The more recent numbers, however, are looking quite a bit different. A June 2017 report by Research firm IDC estimates the Rift has sold about 520,000 units, compared with 770,000 of HTC’s Vive. Which this does show the Vive still in the lead. Have a think about what these new numbers mean. If both estimates are accurate, then in the past 6 months Oculus has sold 277,000 to HTC’s 350,000. Much closer numbers than last year. Also, Oculus just announced the new all-in-one Rift package will be set at a price of $499USD, close to half the price of the Vive. With both systems now performing practically the same; how do you think those numbers will look in another 12 months?

We have little doubt that VR is here to stay. The overall numbers just keep getting better and VR’s future is looking to be on very solid ground this year. But with LG, Microsoft, Apple, Acer and ASUS among others about to enter the market, the Vive’s days as Steam VR’s poster boy look well and truly numbered.


Full article:
https://www.vrbeginnersguide.com/is-this-the-beginning-of-the-end-for-the-htc-vive/

One source reporting news of HTC selling their second Factory:
https://www.androidheadlines.com/2017/03/htc-selling-another-phone-factory-fund-vr-business.html

❤️
43 REPLIES 43

Techy111
MVP
MVP
I don't usually comment on threads like this because I don't know what I'm talking about. So I won't. But @snowdog  😄 you cheer me up lol
A PC with lots of gadgets inside and a thing to see in 3D that you put on your head.

Syrellaris
Rising Star

Zenbane said:




I think it was a good article, it will def be interesting to see who in the end will be crowned the winner. I have my faith in Oculus for that, but don't underestimate openVR from steam.


Agreed. And Oculus does have plans to join OpenVR as well:
Here, Rubin is referencing Oculus' work with the Khronos group (of OpenGL fame) on developing a common set of industry-wide VR standards. Announced back in December, the effort aims to create a set of "APIs for tracking of headsets, controllers and other objects, and for easily integrating devices into a VR runtime. This will enable applications to be portable to any VR system that conforms to the Khronos standard, significantly enhancing the end-user experience, and driving more choice of content to spur further growth in the VR market."

Oculus has joined a range of companies including Valve, Nvidia, ARM, Epic, Unity, Google, Samsung, LG, Razer, and more in signing on to support Khronos' VR standards work. Rubin says it's this kind of multi-company collaboration that interests Oculus more than previous efforts to create "open" VR standards.
Reference:
https://arstechnica.com/gaming/2017/02/oculus-affirms-its-commitment-to-open-vr-standards/

But the same issue arises that we see with the Knuckles... OpenVR involves Valve not HTC. So Valve will benefit from everyone who joins in while HTC continues to struggle from the outside. It's a very odd Partnership between Valve/HTC. Once LG hits the market I suspect they will quickly become the Rift's biggest competitor.


hmm, I wonder if it would not be more beneficial to HTC to simply focus on their intended market these days. Which i believe is more Smartphones? 

andysonofbob
Heroic Explorer
I think HTC's needs to focus on the Vive's only true advantage it has over the Rift: large area roomscale.  They should target organisations that require people walking inside virtual representations of stuff e.g. designer apartments, office space proposals, walking inside engineered something or t'other.

I think the Rift package, after factoring for price now trounces Vive, especially if you live in the UK with an average salary and barely large enough space for room scale.

Why would you 'honestly' buy Vive now?

stargate88
Protege
HTC found other battles to win.

* Enterprise: they have their enterprise version of the HMD
* Accessories: audio, wireless, extra sensor that you can attach to a lot of things
* Chinese market? 

Anonymous
Not applicable

Zenbane said:




I think it was a good article, it will def be interesting to see who in the end will be crowned the winner. I have my faith in Oculus for that, but don't underestimate openVR from steam.


Agreed. And Oculus does have plans to join OpenVR as well:
Here, Rubin is referencing Oculus' work with the Khronos group (of OpenGL fame) on developing a common set of industry-wide VR standards. Announced back in December, the effort aims to create a set of "APIs for tracking of headsets, controllers and other objects, and for easily integrating devices into a VR runtime. This will enable applications to be portable to any VR system that conforms to the Khronos standard, significantly enhancing the end-user experience, and driving more choice of content to spur further growth in the VR market."

Oculus has joined a range of companies including Valve, Nvidia, ARM, Epic, Unity, Google, Samsung, LG, Razer, and more in signing on to support Khronos' VR standards work. Rubin says it's this kind of multi-company collaboration that interests Oculus more than previous efforts to create "open" VR standards.
Reference:
https://arstechnica.com/gaming/2017/02/oculus-affirms-its-commitment-to-open-vr-standards/

But the same issue arises that we see with the Knuckles... OpenVR involves Valve not HTC. So Valve will benefit from everyone who joins in while HTC continues to struggle from the outside. It's a very odd Partnership between Valve/HTC. Once LG hits the market I suspect they will quickly become the Rift's biggest competitor.


The Khronos Group is developing the OpenXR SDK. OpenVR is Valve's SDK running under SteamVR. When OpenXR is released we'll see all SteamVR headsets, including HTC's and LG's, benefiting from it. And I guarantee you that at least 80% of it is going to be the Oculus SDK because Oculus are so far ahead of everyone else in terms of R&D.

I said ages ago that the entire industry should adopt the Oculus SDK as a standard and we'll start seeing that soon. Vive owners are going to be in for a pleasant shock when they experience the performance increases afforded by ASW. There was a poster on Reddit around a month or so ago that posted that he was amazed by the increased performance between running a Rift he bought during the $399 deal and running his Vive via Revive.

And it will give Valve the incentive to fix SteamVR being broken for a lot of Rift owners too if the OpenXR SDK is mostly the Oculus SDK, because if they don't you'll see Vive and LG headset owners having the problems that Rift owners have had with SteamVR. To be fair, they have been working hard on fixing these issues, I haven't had a problem with SteamVR for a while now. Still not fixed for everybody but that'll happen sooner rather than later.

Anonymous
Not applicable

Techy111 said:

I don't usually comment on threads like this because I don't know what I'm talking about. So I want. But @snowdog  😄 you cheer me up lol


One does one's best lol 😛

Zenbane
MVP
MVP


HTC found other battles to win.

* Enterprise: they have their enterprise version of the HMD
* Accessories: audio, wireless, extra sensor that you can attach to a lot of things
* Chinese market? 


Chinese market is likely true. Although that market is still in its infancy, and Asian Industry fluctuates as much as all their rollercoasters, na' mean?

But as for Enterprise? Would you care to elaborate with some real examples? As far as I can tell, Enterprise VR is even less established than the Asian market. Yet if we had to pick someone right now who will dominate Enterprise... it would be Microsoft with AR (imo).

The Accessories "battle" isn't a real thing. Without the software to fully take advantage of the hardware, then it just becomes a decorative piece of shelf-art.

Anonymous
Not applicable
The problem that HTC have with these accessories is the same problem they have with their headset - price. We're talking $99 for the Deluxe Strap, $200+ for wireless and $200+ for foveated rendering plus AT LEAST $99 for the Knuckles controllers. That's more than $600 for accessories, $200 of which will give you a Rift-like experience. So a Vive owner will be spending a grand on a Rift-like experience rather than selling their Vive and getting a Rift instead.

There can't be THAT many people either that rich or that stupid, surely..? 😮

Zoomie
Expert Trustee
This article summarizes things we've been discussing here for quite a while.  To be honest it feels like the author has been lurking here and taking notes for the past 6 months.  Kudos to them if they did.

FaceboOculus is playing the long game while HTC was looking for quick profits to turn around their fortunes.
Valve is also playing the long game, which means I don't expect to see them exit the scene any time soon.  Their model is firmly established as a software distribution hub and as long as there are compatible headsets they're not in any real danger.
Any sufficiently advanced technology is indistinguishable from magic. - Arthur C Clarke

Zenbane
MVP
MVP
I completely agree that Valves strategy makes their long game apparent. The gap between Valve and HTC is increasing in girth  :#