"There's No Money in VR"

I’ll admit that my interest in virtual reality, like many others, lies in the fact that it is an emerging medium. Yes, it has been emerging since the 1990’s but the technology is finally at the point where VR experiences can be delivered to people in their homes. I have a video production background and I see VR as part of a continuation of media production technology. An opportunity, as it were.

In addition, two-dimensional video has been around since the late 70’s, and cinema almost 100 years before that. It’s time for something new.

VR is a seductive medium. It has the potential to allow you to be anyone that you want. It can put you in others’ shoes, others’ skins. It can be experiential and also very abstract — sometimes both at once. And then there are things like Google's Tiltbrush, which allows you to draw in 3D space — something akin to drawing on air itself.

Despite the myriad possibilities of the VR experience, for "content creators"(I abhor that term , there are not a lot of opportunities to make a living in the medium. Simply said, there are no business models. 

For content creators, there is no money in VR.

In 2016, approximately 12 million VR headsets sold. Worldwide. Apparently, this does not equal mass adoption.

In 2016, approximately 12 million VR headsets sold. Worldwide. Apparently, this does not equal mass adoption.

This is not entirely true, if you count the few mega-corporations such as facebook, HTC, and google funding VR content creation. In this post, I've actually added links to the companies funding VR content creators below. But these are programs and incubators that you have to apply for, which is decidedly not the same as a sustainable funding model that would give a VR creator any sort of livable income.

There may be money for content creators working in YouTube, self-publishing, episodic and unscripted television — even feature films, but not in VR. It just doesn't have the audience for the money people to fund content creators. Not yet.

In fact, most of the funding going into the VR space is going to hardware developers. Granted, VR technology as it currently stands is at a bottleneck: the headsets are too expensive, too bulky, and there is no killer app. For mass adoption, VR needs to be made much, much, much more accessible.

This is some of what I learned in early March when I attended the second day of Versions, a two-day event about VR. The event was hosted by Killscreen, in partnership with the New Museum. The second day was "panels day" and I'd registered to attend four panels throughout the day. 

"Facing Reality: Making Money in VR/AR”

The first panel was titled "Facing Reality: Making Money in VR/AR”. It was the best, and also the most surprising.

The panel consisted of four humans with equally divergent backgrounds in VR:

Obviously, the latter two weren't exactly hurting for funding - their principal function seemed to be, “look at all this cool stuff we’re doing and how great we are!”. That said, they rounded out the panel quite well and provided a very real counterpoint to the independents - the game dev and the producer.

So what did I learn from the panel, aside from the definitive fact that there's no one funding content creators in VR?

My notes from the panel follow. Each panelist gave a presentation and then the four took questions from the audience.

Adaora Udoji, VC

  • Scandinavian countries, and Canada, are giving out grants to VR developers.
  • Who's spending money in the VR space?
    • Huge tech companies such as facebook and google
    • Media and entertainment companies 
    • VCs and angel investors
    • Brands
  • There are a lot of questions regarding VR right now:
    • The industry is in a sort of "Wait and See" holding pattern
    • VR platforms are still figuring out the best ways to distribute VR content
    • Investors, distributors, and creators are currently trying to figure out how to grow audiences for VR experiences

Drew Bamford, Head of HTC Creative Labs

Ari Kuschnir, Founder of production company, M ss ng P eces

Joe Radak, indie game dev

  • Medium post: "The Cost of Making a VR Game"
  • Where's the money for independent content creators? 
    • Investors
    • Oculus, Sony, Valve
    • Distribution platforms such as Jaunt, Within, WeVR
    • Kickstarter/IndieGogo
    • Steam's Early Access program — lets you put up a minimum-viable-product and take pre-orders to finish your game
  • For game devs, the question isn't "How do you make money in VR?", it is, "How do you save money in VR?". Making games is expensive and the returns are uncertain. It's best to keep overhead as low as possible.

Group Discussion

  • "How do you pitch a VR idea?"
    • Create a proof of concept
    • Have a compelling slide deck
    • Bootstrap it, and put it out there
    • Adaora: "There are a lot of seats at the table."
  • "Anything you think about making, think about it serialized."
    • It's good to have an idea that can be a TV show, a film, a VR experience.
    • Henry won an Emmy.

During the Q&A part of the panel, an older fellow representing the US Army stood up and offered money to VR developers, in exchange for working for the government. It felt weird. One of the panelists, or maybe the moderator, callously cracked a joke about, “well, if you’re looking for money in VR, here it is! Doesn’t get much better than this guys!”.

After the panel, I was talking to an acquaintance outside the auditorium, and a shorter version of the man who’d pitched the room effortlessly slid a business card into my hand while I was mid-gesticulation without breaking stride.. 

I kept the card. I don't know why.

CONCLUSION

It was obvious that the whole focus of the panels that day was to "empower and encourage" attendees to make VR content. But why when you can't make a living at it? I appreciated the panel's honesty in reflecting the challenges the face as seasoned pros navigating the VR market.

It was a reality check. The VR gold rush does not exist, at least not for content creators, but the medium does have a lot of potential. Obviously.

Eventually VR will go mainstream, but I wouldn't mortgage your house to create the next VR game/film/etc success. For now, it's the indie creators and the artists that are tasked with taking the risks to find out what works in the medium. Maybe that's how it's always been with new mediums.

Also, I am very excited about the proliferation of VR arcades. Another post, for another time.