This is the second of the two part article focussing on 2015 numbers for Virtual Reality. If you missed the first part, please see our article from earlier this week. Thank you for all your comments and support.

#3 The Controllers Dilemma 

Over this year, we have spend a lot of time talking about the HMDs. A majority of that has focused around the head set and the title releases that will be made available for each of the platforms. In fact, we were surprised by the attention that our article received about the patent describing the potential eye-tracking feature of the PlayStation VR device.

There is however a major factor that should not be overlooked by the marketing and pricing teams of the device offerings and these happen to be the “Controllers”. I have seen forums filled with fan expectation and anticipation, not to mention over heated discussions around the ergonomics of these controllers on r/Oculus. The use of the controllers is  important to the overall experience of enjoying virtual reality. As we move into the second quarter of 2016, Controllers will definitely be a big topic of conversation.

There are some interesting elements to the decision making here. It is not entirely a decision that can be made alone by the HMD provider. This requires careful coordination as well as managing joint expectations with the main partners; the Game development Studios.

The Gaming companies would prefer that the units launch just with the ordinary gamepads. That would reduce a lot of complexity in their development cycles for the titles and with reduced complexity there will be less costs. The other aspect here is that the game studios would like less barriers of entry for the consumer to experience their game. They would not prefer if the consumer had to shell more money to buy a specific controller to enjoy their game. Traditional gamepads have in fact become common and cheap over the years. The other important criteria to consider is how many of the available gaming titles released with the launch are indeed going to support the custom controllers?

From a strategic product positioning perspective, it is still an important decision. Lets assume that you are Oculus. Do you enter the market with just a gamepad knowing that your competitor is absolutely going to have custom controllers available for their fans when they launch their product? Do you stage your product launch in two phases? The first launch in early 2016 offers just the gamepad and you time the release of your Oculus Touch with HTC VIVE product launch in April.

This offers a couple of advantages. First by not pairing an additional set of custom controllers, you will have a pricing advantage over HTC VIVE and by subsequently offering the controllers in April, you will still have fans anticipating these new controller units, who wouldn’t mind spending a marginal dollar.

Since there is so much of consumer interest in these unique controllers (+30%), it may not be a prudent decision to entirely drop them from the launch offerings. In fact, from the images leaked last week of HTC VIVE, it appears that they may have made some design changes to their controllers.

I know that we can speculate various scenarios till the cows come home. Hold your breath. It’s only a matter of few weeks and we can all find out what the offering is from our VR Gods.

#4 Repairability and Support

Complex product launches require that the product has a well-defined support structure in place. When consumers pay premium prices, they will want an excellent support in terms of access to support centers for repairs and customer support to help with issues. Brands will pay a hefty price if they take short cuts in planning this, since this is a new product category and is priced at premium.

Product launch strategy will need to account for this key fact. Can you afford to launch the product world wide in a big bang rollout or do you need to carefully orchestrate the launch by focusing on key geographies. Do you have the scale in your support structure to handle a big-bang rollout? Is your support staff adequately trained to handle the customer calls?

Companies with some experience in this area “may” have a slight advantage. SONY has been in the hardware business and is conversant around product support issues. HTC has been in the support business for its phones for a while in different geographies.

#5 What’s the buzz

There have been a few buzz words that have been used directly or indirectly for this product category in 2015. I’m not sure if careful and deliberate initiatives have been put into place in order to translate these brand associations into unique selling propositions. Given that all the three core brands have very similar hardware in terms of refresh rates, latency and resolution, these buzz words may have the potential to be a game changer if they can be properly framed as a premium differentiated offering.

The first of these belong to PlayStationVR. If you look at the press events and interviews over the past year, you will notice a lot of chatter around the “True RGB” attribute of their product.

Searching for “True RGB” and “True Sub pixels” in 2015 yield only about 6,500 results. If this were to be a core offering, I would have expected more chatter around this. Perhaps, the product brochures and ads will take care of this in the future. It has certainly not been in the top of the consumer minds.

The second of these attributes belonged to HTC VIVE. The concept of “Room Scale” gaming experience. Searching for HTC VIVE with “Room Scale Experience”, “Room Tracking” and “Room” in 2015 yielded ~275,000 results. That amounts to roughly 6% of the total search results for HTC VIVE in 2015.

It will be interesting to see which attributes of the brands are positioned when the products are marketed in their first generation launches. At this point, the key determinant will absolutely be the quality of the VR experience from the headset which in my mind will be largely driven by the titles made available by the game studios for each of these devices and the unique experiences of folks!

We wish you all a Very Happy and a Fun filled 2016!!