Recently, Valve CEO Gabe Newell said something very telling about its massive investment in VR:
"We think VR is going great... We’re also pretty comfortable with the idea that it will turn out to be a complete failure.”
Which might seem like an odd thing to say, until you see how few VR apps are earning any worthwhile level of revenue on Valve's Steam distribution network, as Road to VR notes:
Sorting content ‘by VR’ through the Steam store, the number of titles that support the technology comfortably exceeds 1,000. While a few early indie VR titles have seen a few million in revenue, according to Valve only 30 of Steam’s VR apps have made over $250,000.
Unless it's a no-frills app made by a 1-2 person indie team, $250,000 is barely breaking even, or just as likely -- given that typical VR development budgets are in the mid-six/low seven figures -- losing money. And just 3% of all VR apps to that well.
To put that in contrast, consider this: It's likely there are still more people making more money from creating virtual content in Second Life than making money from VR content on Steam. Seriously:
- Gross Resident Earnings... totaled US$55 million
- More than 50 accounts earned more than US$100,000 each
- The top 25 accounts, as a group, earned about US$12 million
That was the Second Life economy highlights of 2009, but in 2015, the total gross Resident earnings were a bit more, at $60 million, so it's still likely the case that the 25 most successful SL content creators are earning roughly an average of $480,000 each if not more. Which to be sure, isn't exactly a 1 to 1 comparison, but it does help to illustrate why GabeN is smart to be cautious about VR.
Pictured: Job Simulator, one of the few VR hits.