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As we have stated previously, we think the predictions of the death of the console will prove incorrect for at least this generation. Of course Sony can’t stand still, because its competitors sure won’t and that takes us to the other part of the weekend’s event that we wanted to share.
Besides new games in the pipeline for the PS4, Sony also allocated a substantial chunk of the weekend to the PlayStation VR, previously called Project Morpheus. We think this bit of kit will help position Sony to be at the forefront of the virtual reality (VR) market opportunity as it goes primetime over the next few years.
Virtual reality and augmented reality (AR) are likely to become widely prevalent in an array of industries over the next decade. Gaming and entertainment are in particular the logical places for VR to take off and as the technology develops, the experiences for users will quite literally only be limited by our imaginations!
Digi-Capital has taken a shot at forecasting the market opportunity for VR by 2020 and pegs it around $30 billion, from a standing start in 2016. Going forward, we would expect these figures to continue growing at well above average industry pace for a number of years, capturing a larger percentage of the more mainstream industry market share.
Sony’s PlayStation VR will be competing head to head with the Oculus Rift when both are released in “early 2016” and we don’t have any details on pricing yet. Nevertheless, we think they will be reasonably competitively priced to encourage adoption. Facebook closed the deal to buy Oculus in 2014 and according to publications that have had some hands on experience with prototypes from both companies the immersion is amazing, and even enough for you to forget about that “dorky” looking headset.
Up until recent years a major sticking point had been simulator sickness (akin to motion sickness) but the latest iterations of the products have dramatically reduced latency, reducing the risk of nausea for the vast majority of people.
Although VR has had its false starts, it really seems on track to be in the ‘wild’ in a big way next year. We expect Sony, Apple, Facebook, Microsoft and Alphabet / Google (NASDAQ: GOOG, initial buy $219.65) to be some of the major players in VR over the next decade. Of these companies though, if Sony gets its shot on target, it stands to, by far, make the biggest difference for the company as it is still trying to get back to a sustainable profit footing.
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