Why Immersive Reality’s Next Phase Will Be a Long Game
Immersive reality, also known as extended reality (XR), is entering a new growth phase.
The cycle initiated by Meta’s VR headset Quest, developed by Reality Labs, is closing as a new one begins. It will be driven by the emergence of mixed reality (MR) and new player entries, including by Apple and Google. But at least in the beginning, this new cycle will be marked by more linear growth, as opposed to the first cycle’s big-step change driven by the first two Quest devices.
We can expect a more subdued growth trajectory for a few reasons, related to the capabilities and limitations of four emerging headsets: Meta’s Quest 3, Apple Vision Pro, Google-Samsung Headset and Sony’s PSVR 2.
There was (and is) reasonable hype surrounding each, just as there was in pre-launch anticipation of the Oculus Quest, whose buzzy prototype was named Oculus Santa Cruz. But the outcome for each of these new headsets will be a bit different than common expectations would suggest.
PSVR 2 (Sony)
I had high hopes for PSVR 2, which many expected to reinvigorate tethered VR as a whole, giving also new life to the stagnating PC VR market thanks to the many high-quality VR games that could have been made compatible both with Sony’s new console and PC. But while the headset is technologically impressive, its content catalog is still limited and doesn’t allow users to fully exploit its new feature set, such as new eye-tracking capabilities. This, together with the price of the device, likely held back unit sales, despite improving 8 percent over the first-gen PSVR. But overall, the PSVR 2 appears more incremental versus game-changing for XR’s total value prop.
Apple Vision Pro
In June 2023, Apple announced Vision Pro, its long-awaited mixed-reality headset. But initial euphoria quickly gave way to the realization that the device would only reach a narrow market, given its starting price point of $3,500. Reports in July also surfaced that Apple was cutting production targets for Vision Pro due to design complexities that make it difficult to manufacture.
The device is expected to launch in the U.S. in early 2024, followed by selected international markets by year’s end, suggesting that a global rollout wouldn’t occur until 2025. Sources have suggested a cheaper version is coming that would presumably have greater mass-market appeal, though probably not until 2025 or 2026. Further, the Unity Beta for Vision Pro developers isn’t yet available, meaning many devs like me can’t yet start experimenting with the development of application for the device, something that at this point probably will happen later in 2024.
All this would suggest Apple is playing the long game with its entry in the space. Apple is an outlier in significant ways that other manufacturers aren’t. Given its deep bench of hardware products, increasingly supported by its Services business line, Apple doesn’t need to rush Vision Pro’s development, release or uptake. As Tim Cook loves to say, “Apple doesn’t have to be the first, it has to be the best.”
Despite the prolonged rollout, Vision Pro has restored some enthusiasm to the XR ecosystem. If Apple is interested in XR, it’s a strong signal that XR is the next-gen consumer technological platform. Nevertheless, Vision Pro’s early drawbacks, on price in particular, don’t suggest it will be the device that launches wider consumer adoption, at least in the short term.
Google and Samsung
The XR dev community has been waiting for moves by Google and Samsung, so it was affirming to see the two announce in February that they were working together on an MR headset. Each company is contributing to this device doing what it knows best: Google is handling the operating system (Android XR) and Samsung the hardware. Respectively, Google and Samsung have helped grow the smartphone and overall mobile ecosystem to its current stature, so we suspect they can do the same with immersive headsets.
But recent rumors have highlighted internal confusion surrounding the device. Google reportedly doesn’t have a clear XR strategy, leading some key engineers to depart altogether. Development on Samsung’s headset has also been delayed, as management was surprised by the features announced for Vision Pro so teams are taking more time to build a competitive device.
In short, there’s drama. Ultimately, the companies are expected to come forward with a device but probably not this year. And if Samsung is indeed playing catch-up to Apple, it’s likely it would be priced out of reach of the average consumer.
Quest 3 (Meta)
Let’s come to Meta and its highly anticipated forthcoming MR headset, the Meta Quest 3. All previous generations of Quest have advanced the industry, and expectations are equally high with this one. This is the first Meta headset with “high-resolution passthrough AR,” which basically means the user can wear it and see its surroundings with a good visual fidelity. And for the first time it has also a depth sensor, which will make sure the headset can analyze and understand the room in which the user is playing.
But while XR devs and enthusiasts are eager to get their hands on the device, it’s an open question whether the average consumer will be. Quest 2 was sold as an affordable gaming-centric device, with many (a few hundred) games released for it over the years. For some consumers, those incentives are clear.
But the Quest 3’s main selling point is that it adds mixed-reality capabilities. But gaming in mixed reality is seldom exciting, so if the Quest 3 continues to be a VR device focused on gaming, mixed reality will be a harder sell. If Meta wants to use mixed reality as Quest 3’s main value prop, it should make the device transition to be more general purpose — a bit like a Chromebook or a tablet — with features and utility focused on what MR does.
The task of transitioning to mixed-reality capabilities is perhaps more challenged because Meta’s Quest Pro already tried to push a bit in this sense — and failed. Launched in October 2022, Quest Pro introduced mixed reality and eye tracking. I’ve seen a few interesting experiments using them, but the device sales were actually disappointing, and in fact its discontinuation has already started. If mixed reality was such an added value, Quest Pro should have had another outcome.
The Quest 3 has just launched at $500, by no stretch a small amount of money. For XR more than for other consumer tech, price is a defining factor predicting the success or failure of a given device, at least as far as unit sales. That basic premise has driven Meta’s strategy with XR, which has always been one of selling devices at cost or under cost to facilitate higher sales numbers.
I suspect the Quest 3 won’t be the device that makes the XR market explode. Current economic conditions are driving down consumer spending, the device isn’t cheap, and the added value for the average consumer isn’t clear yet — unless, of course, Meta launches an abundance of wonderful MR apps that make it so. But the just-happened launch event of the Quest 3 showed nothing in this sense. Even more, Mark Zuckerberg at the Meta Connect event looked more interested in promoting the Meta AI chatbot than his new headset.
From my perspective, Quest 3 is part of a long-term strategy of Meta’s Reality Labs efforts, marking an initial step on its path to transition from a pure VR emphasis to a mixed-reality one. It’s part of its journey toward AR glasses worn every day. But that requires building and scaling a completely new market and establishing a new need in the minds of consumers. That transition won’t happen overnight.
In sum, development in the XR space is taking longer than expected to achieve new waves of adoption. So, what still needs to happen? In the past, the community has blamed high prices, headset weight, a lack of compelling content, field of view (FOV) and eye tracking.
But each of these missing aspects is already offered in various devices on the market. Quest 2 is cheap and has quite good games; all the most recent headsets are lightweight; new devices such as the HTC Vive Flow or Bigscreen Beyond are small; we have wide-FOV devices like Pimax; and eye tracking came with Quest Pro and PSVR 2.
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But advancing XR development still hasn’t pushed the adoption to the consumer market. So far, it seems to me the industry has been too narrowly focused on some specific technical feature versus the overall value of the device given to the user, measured as its real everyday usability. Apple is working on exactly that, on communicating clear use cases understandable by average people, and that’s why it’s attracting a lot of interest.
At a certain point, we’ll reach an inflection point when XR starts to become more mainstream. I believe we’ll get there, but the road ahead is still long.
Antony Vitillo is an Italy-based developer turned entrepreneur who has worked with virtual and augmented reality technologies since 2014. He is the co-founder of New Technology Walkers, a consultancy focused on breakthrough technologies, and writes “The Ghost Howls,” a blog about AR and VR.
