UPDATE, 10/28: Bumped up for weekend discussion!
"Both Sansar and High Fidelity are operating under a very shaky premise," says Wagner James Au, author of The Making of Second Life. "They're gambling their whole companies' futures on the premise that there's going to be a large market consisting of tens of millions of VR owners.
But that's fine, because if there was one point I wanted to come across in that article, it was that one. Both companies (not to mention Microsoft, Google, Facebook, Sony, and all the other major tech companies creating VR headsets) are now careening toward a very unknown future based on unchecked premises and shaky assumptions. We still don't know how many people in the world actually want to buy and use virtual reality on a regular basis, and so far, signs are not encouraging.
I know what I don't know on this topic -- but I don't know if Philip Rosedale and Ebbe Altberg know what they don't know. A couple years ago, Philip suggested to me that VR adoption would be as rapid as smartphone adoption. Two years later, we're nowhere near that rate. In presentations about Sansar, Altberg has cited Goldman Sachs' forecast that VR has a big and bright future. I'm not sure if Ebbe actually read Goldman's forecast, but I did, and it is rife with questionable assumptions. Both High Fidelity and Sansar are being developed to run with Oculus Rift and HTC-Vive, and as it stands right now, their install base is tiny:
In the best forecast I've seen, Oculus and Vive won't even have a combined install base above 1 million this year. And now both are competing against at least four cheaper alternatives: Google Daydream, Samsung Gear VR, Playstation VR, and Microsoft's just-announced headset line. For the industry as a whole, the excess of competing headsets pretty much insures none will predominate, risking market cannibalization. For Sansar and High Fidelity, we are talking about two platforms struggling to compete amid a sea of competitors for a tiny consumer base. For Sansar to justify its $20 million-plus development budget, the company likely needs at least several hundred thousand heavily monetized players. And it will be nigh impossible to attract those numbers next year, or even the year after that.
And yes, both Sansar and High Fidelity are accessible via PC. But when I tried High Fidelity for Mac earlier this year, it was clear the user experience is not optimized for that platform. I haven't tried Sansar's PC, Mac, or mobile options, but my fear is the same thing will be true for them. What is definitely true is that High Fidelity and Sansar have spent little time promoting their non-VR options, and from the general public's perspective, they're all about VR -- which will also hurt adoption of their non-VR alternatives.
The irony in all this? Sansar is being developed from the revenue earned by Second Life, while High Fidelity is also partly financed by SL revenue. (Since Linden Lab is an investor in the company.) So the next wave of virtual worlds is gambling that this time, virtual reality hype will generate actual consumer interest -- even though everyone involved knows that Second Life itself couldn't meet those inflated expectations.
Or to put it another way: Sansar and High Fidelity are being built on the back of Second Life and its dedicated users without any clear proof that there's enough people interested in VR to justify that gamble.
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