Virtual reality is facing an old, forgotten threat: fragmentation

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Virtual reality is facing an old, forgotten threat: fragmentation

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The VR market is in transition and facing an old threat: fragmentation into platforms as well as technology types.

Meta Quest has been the leading VR platform for several years with millions of users. For studios and developers looking to build a profitable business in this market, there is no way around the Quest Store.

But in 2024, new serious competitors enter the market to challenge Meta’s dominance.

Apple is building an entirely new VR platform with Vision Pro, based on the VisionOS spatial operating system. By the end of the year, Google and Samsung are expected to join the fray, creating a third major ecosystem for standalone headsets based on Android XR, another new operating system optimized for VR and AR.

Meta Quest is also based on a modified version of Android, but it is unclear to what extent the platforms will be compatible with each other. In any case, Google and Meta have not been able to agree on closer cooperation.

VR platforms in 2025: More choices than ever

The situation for developers and consumers could become way more complex in the next five years than it has been in the past four years when Meta Quest dominated.

By 2025, there could be half a dozen headset platforms to choose from, with very different app offerings: Meta Quest, Pico OS, VisionOS, Android XR, SteamVR, and Playstation VR 2. The OpenXR industry standard covers half of these platforms, and it’s still unclear to what extent Android XR will commit to it.

It is unlikely that developers will release their content for all of these platforms; the effort would simply be too great. Consumers will therefore have to choose a platform and inevitably miss out on some content.

VR controllers or hand tracking?

Further fragmentation is looming at the input method level. VR studios have been developing for controllers for almost a decade and have developed a design language that is optimized for this type of input.

Apple’s focus on hand and eye tracking as input fundamentally challenges this paradigm. Most games and apps designed for controllers cannot be easily translated to hand and eye controls, and an important component of that game and user experience, namely haptics, is completely lost.

Games and apps need to be rethought from the ground up for these new types of input, and a significant amount of knowledge built up over the last decade would be useless. The VR community is divided on where this will lead.

Virtual reality or mixed reality?

There is also a risk of fragmentation within the leading Quest platform itself. With mixed reality, Meta is pushing a new type of technology that differs from virtual reality in that it incorporates the physical environment into the experience. Virtual reality and mixed reality are not mutually exclusive, and mixed reality could expand the VR market rather than fragment it. But the technology is still relatively new and untested, and we will have to wait and see how consumers respond.

For developers, this choice can present a real dilemma: Should they focus their (usually scarce) resources on established virtual reality, try something new in mixed reality, or use both technologies simultaneously? The choice of technology has far-reaching consequences and can make or break a studio. Some long-established studios like Fast Travel Games have already made the decision, knowing that the industry is going through a risky phase of self-definition.

I have only touched on the challenges facing virtual reality in this article, but it is easy to see that the market could move in many directions over the next five years, contributing to its fragmentation rather than its expansion.

My prediction is that two platforms will emerge as winners. Because the already small VR market cannot take any more.


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