VR Hits and Google Fails

Virtual Reality: The Console of the Future

This week, Facebook announced that 60 virtual reality titles have generated more than $1m in revenue. This comes almost 5 years after Facebook released its first consumer headset: the Oculus Rift CV1. Even some games like Five Nights at Freddy’s: Help Wanted and Onward have hit the $1m mark in the first week, pointing to increased VR adoption.

When looking at VR, you have to look at it as a standalone console, which is why we believe adoption has been slow. With a high price point and lack of high-quality games, consumers have been reluctant to make the purchase. Also, gaming is inherently social and has some of the strongest network effects; therefore, buying a new console when your friends don’t have it makes it an even harder purchase. VR finally appears to now be catching a wave of adoption.

VR is poised to be the next console, facilitating far more experiences than your Xbox or PlayStation. From fitness (FitXR) to social (Rec Room and Messenger) to traditional gaming, VR offers significant value that could make VR an important part of gaming’s future. Even Apple is reported to be developing a VR headset (The Verge).

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Google's Gaming Graveyard Gets Bigger

Google has officially announced that they are shutting down the first-party content division of Stadia. Google’s graveyard (Killed By Google) is vast and now we can add Stadia’s exclusive gaming content division to the gaming graveyard that includes Nexus Player (2014-2016), YouTube for Nintendo 3DS (2013-2019), and Game Builder (2019). This is an interesting move by Google, because what makes Stadia successful was not going to be the tech, but instead the cloud-native games. As we’ve written about before, exclusive content is what matters in gaming to players.

Google actively decided not to purchase a publisher and attempted to build vs. buy. It is easy to be the Monday morning quarterback and say that Google should have competed for ZeniMax and outbid Microsoft’s $7.5B price tag, but they didn’t and now are searching for content via third-party developers. This is now the second technology giant to fall on its face generating first-party content, the other being Amazon’s infamous failed Crucible launch (Gamerant). In contrast to Google’s fold of first-party gaming content, we expect to see another strong Amazon push on this front.