Oculus Looks to Ignite Standalone VR Space

Attractively Priced Oculus Go Headset Starts Shipping

This week at its F8 developer conference, Facebook announced that the Oculus Go standalone virtual reality (VR) headset is now available in 23 countries, priced at $199. First announced in October 2017, the device doesn’t need to be powered by a smartphone or PC like most VR headsets currently on the market.

Oculus Go can track a user’s head movement and comes with a hand controller. It doesn’t offer more advanced inside-out tracking, which means the user has to stay seated while using the headset. It features a Qualcomm Snapdragon 821 processor, the same chipset used in the original Google Pixel phone. Oculus claims it has optimised hardware for VR, and that it’s able to achieve better performance than the Samsung Gear VR smartphone headset. Users have access to over 1,000 games, movies and experiences on the Oculus Store.

Initial reaction to the headset has been very positive, with testers (including my colleague Geoff Blaber) praising its display quality and comfort. The lack of inside-out tracking and dual hand controllers is noted as its biggest weakness, but this was balanced against its price. I believe the $199 price tag will entice casual VR users and that the Oculus Go will emerge as the most commercially successful standalone VR headset to date.

Standalone VR devices should start gaining traction this year, especially in China where Oculus has partnered with Xiaomi. The Chinese electronics giant manufactured the Oculus Go headset, and will sell an own-branded version of the device, called the Xiaomi Mi VR Standalone, in its home market.

Oculus Go and Xiaomi Mi VR Standalone

Sources: Oculus and Xiaomi

I also expect enterprise and education vertical markets to start moving away from smartphone VR to standalone VR devices, a shift that will accelerate as the latter become more affordable. The integrated design that standalone VR products offer is also more attractive to these markets than a headset that requires a smartphone.

Two other leading standalone devices are the Lenovo Mirage Solo, which is based on Google’s Daydream VR platform, and the HTC Vive Focus, which runs apps from HTC’s Viveport content store. These headsets offer the superior inside-out positional tracking and are priced considerably higher than Oculus Go. The Mirage Solo retails for about $400, and the Vive Focus, which hasn’t yet been released outside China, is expected to cost around $600.

Lenovo Mirage Solo and HTC Vive Focus

Sources: Lenovo and HTC

In the standalone VR headset category, pricing will be a crucial determining factor of success. In my opinion, the $400 cost will prove too steep for its target “casual” market, particularly for existing PlayStation 4 or gaming PC owners. At that price, I believe this user group is more likely to buy the more-capable Microsoft Mixed Reality, Oculus Rift or PlayStation VR headsets, which cost $400 or less.

Given the Oculus Go’s price tag of $199, I’m optimistic about its chances of sparking a new wave of growth that can help broaden the appeal of VR, particularly among businesses and in education as well. But despite Facebook’s ambitious goal of connecting people virtually by “defying distance”, in the near term, I believe it will still struggle to achieve the all-important network effect given the isolating nature of the headset.

According to CCS Insight’s latest market forecast, 2 million standalone VR headsets will be shipped globally in 2019, rising to 10 million in 2022. You can read about our latest assumptions for the virtual reality and augmented reality markets here.

VR and AR device shipments and value in 2022
Source: CCS Insight Market Forecast: VR and AR Device Forecast, 2018-2022

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