Benedict Evans take on: The VR winter

Published on
May 9, 2020
by
Benedict Evans
No items found.
Benedict Evans take on: The VR winter
“Our vision is that VR / AR will be the next major computing platform after mobile in about 10 years. It can be even more ubiquitous than mobile - especially once we reach AR - since you can have it always on… Once you have a good VR / AR system, you no longer need to buy phones or TVs or many other physical objects - they can just become apps in a digital store.’ - Mark Zuckerberg, 2015

We tried VR in the 1980s, and it didn’t work. The idea may have been great, but the technology of the day was nowhere close to delivering it, and almost everyone forgot about it. Then, in 2012, we realised that this might work now. Moore’s law and the smartphone component supply chain meant that the hardware to deliver the vision was mostly there on the shelf. Since then we’ve gone from the proof of concept to maybe three quarters of the way towards a really great mass-market consumer device.

However, we haven’t worked out what you would do with a great VR device beyond games (or some very niche industrial application), and it’s not clear that we will. We’ve had five years of experimental projects and all sorts of content has been tried, and nothing other than games has really worked.  

Meanwhile, it’s instructive that now that we’re all locked up at home, video calls have become a huge consumer phenomenon, but VR has been not. This should have been a VR moment, and it isn’t.

Does that tell us anything? Surely if a raw experience is amazing, the applications will come with a bit more time? Well, perhaps. If you try the Oculus Quest, the experience is indeed amazing and it’s easy to think that this is part of the future. However, if you’d tried one of today’s games consoles in 1980 you’d have had the same reaction - clearly amazing and clearly part of the future. But it turned out that games consoles were a 150-200m unit installed base, not the 1.5bn of PCs, let alone the 4bn of smartphones. That’s a big business, but it’s a branch off the side of the tech industry, not its central, driving ecosystem. Most people’s experience of console games is the demo in the window of a Microsoft store in the mall - they say ‘that’s pretty’ and walk past. A long time ago a school teacher named Hammy Sparks (yes, really) blew my mind by suggesting that there can be different sized infinities - in tech, there can be different sized amazings.

Smartphones are broad and universal, whereas consoles are deep and narrow, and deep and narrow is a smaller market. VR is even deeper and even narrower, and so if we can’t work out a form of content that isn’t also deep and narrow, I think we have to assume that VR will be a subset of the games console. That would be a decent business, but it’s not why Mark Zuckerberg bought Oculus. It’s another branch off the side of tech, not the next platform after smartphones.

There’s a bunch of ideas that float around here. One is that you can’t really do apps and productivity yet because the screens aren’t high enough resolution to read text, so we can’t yet work in a 360 degree virtual sphere, and that will come. Another is that the headsets need to be even smaller and even lighter, and do pass-through so you can see the room around you. Yet another is that we just have to keep waiting, and in particular wait for a larger installed base (presumably driven by those deep-and-narrow games sales), and the innovation will somehow kick in.

There’s nothing fundamentally illogical about any of these ideas, but they do remind me a little of Karl Popper’s criticism of Marxists - that when asked why their supposedly scientific prediction hadn’t happened yet they would always say ‘ah, the historical circumstances aren’t right - you just have to wait a few more years’. There is also, of course, the tendency of Marxists to respond to being asked why communist states seem always to turn out badly by saying ‘ah, but that isn’t proper communism’. I seem to hear ‘ah, but that isn’t proper VR’ an awful lot these days.

To put this another way, it’s quite common to say that the iPhone, or PCs, or aircraft also looked primitive and useless once, but they got better, and the same will happen here. The problem with this is that the iPhone or the Wright Flier were indeed primitive and impractical, but they were breakthroughs of concept with clear paths for radical improvement. The iPhone had a bad camera, no apps and no 3G, but there was no reason why those couldn’t quickly be added. Blériot flew across the Channel just six years after the Wrights’ first powered flight. What’s the equivalent forward path here? There was an obvious roadmap for getting from a duct-taped mock-up to the Oculus Quest, and today for making the Quest even smaller and lighter, but what is the roadmap for breaking into a completely different model of consumer behaviour or consumer application? What specifically do you have to believe will change to take VR beyond games?  

Poking away at this a bit further, I think there are maybe four propositions to think about.

  • Is it true that we are essentially almost there, and a bit more iteration of the hardware and the developer ecosystem will get us to a tipping point, and the S Curve will turn upwards? How would we know?
  • Are we where smartphones were before the iPhone? All of the core technology was there - we had apps and touch screens and fast data networks and so on -  but we needed a change in the paradigm to package them all up in a much more accessible form. Is Oculus the new Symbian? It’s worth noting that no-one was really saying this about mobile before the iPhone - as I wrote here, the need for a new approach was  only obvious in hindsight.
  • Is there a fundamental contradiction between a universally accessible experience and a device that you put on your head that shuts out the world around you and places you into an alternative reality? Is ‘VR that isn’t deep and narrow’ an oxymoron? That, after all, was the answer for games consoles. I suspect a lot of people in tech would reject this out of hand -  the right VR, when we have it, must be the future, but one can’t actually take it as a given.
  • Or, by extension, is this the point - that ‘real’ VR needs some completely different device and that’s what would take it to universality? VR as HMD is narrow but VR as, say, neural lace is not?

Reading Mark’s quote above, as he talks about the merging of AR and VR, it strikes me that this and many visions for VR (cf ‘Ready Player One’) are really describing not ‘an HMD but a bit better’ but glasses, or perhaps contact lenses, or maybe even something even further into the future like neural implants. On that basis I think you could argue that even the Oculus Quest is not 3/4 of the way ‘there’ but actually still just at the beginning of the VR S Curve. The successor to the smartphone will be something that doesn’t just merge AR and VR but make the distinction irrelevant - something that you can wear all day every day, and that can seamlessly both occlude and supplement the real world and generate indistinguishable volumetric space. On that view the Oculus isn’t the iPhone - it’s the Newton, or the Apple 2, which were also far from universal, and the platonic ideal universal device is a decade or two into the future.

In turn, the trouble with this argument is that when tech people take about ‘ten years’ or ‘twenty years’, they are effectively right on the edge of science fiction - my grandfather wrote a lot of science fiction, but I try to think about the stuff we have now, and the roadmaps we have now that might tell us what we can build next. But if ‘real VR’ needs something that’s ten or twenty years away, we’re in for another VR winter.

Pulling all of these threads together, the issue I circle around is not just that we don’t have a ‘killer app’ for VR beyond games, but that we don’t know what the path to getting one might be. We can make assertions of belief from first principles - there was no killer app for the first PCs either, but they looked useful. When I started my career 3G was the hot topic, and every investor kept asking ‘what’s the killer app for 3G?’ It turned out that the killer app for having the internet in your pocket was, well, having the internet in your pocket. But with each of those, we knew what to build next, and with VR we don’t. That tells me that VR has a place in the future. It just doesn’t tell me what kind of place.

Benedict Evans is a Venture Partner at Mosaic Ventures and previously a partner at A16Z. You can read more from Benedict here, or subscribe to his newsletter.