Virtual Reality Demand Exceeding Ability to Supply Equipment

The virtual reality (VR) business won’t grow as quickly as expected this year — and it has no one to blame but itself, according to a research report out this week. Manufacturers of the VR hardware aren’t cranking out headsets quickly enough, the report found.

Facebook’s Oculus Rift headset and the competing HTC Vive are among the VR headsets that have admitted in recent weeks to supply chain hiccups.

Accordingly, research firm SuperData has slashed its 2016 sales forecast for VR hardware and software to $2.9 billion — a 22 percent drop from an outlook last month.

It was the second time the outlook for VR has been slashed by SuperData, which in January had initially forecast $5.1 billion in VR revenue for 2016.

Virtual Reality Equipment

Virtual Reality Equipment Shortage Should Be Short-lived

“There is a significant gap in the ability to fulfill consumer demand due to parts shortages and unforeseen popularity,” SuperData noted.

More than 13 million Americans said they intend to buy VR headsets this year, but only 7.2 million are estimated to ship, SuperData reported.

Last week, the maker of the Oculus Rift pushed back shipping dates of the high-end headset because of an “unexpected component shortage.”

Rift orders made this week aren’t expected to be delivered until July or August — despite the fact that its headset is priced at a steep $599, not including a tricked-out PC that typically costs at least $1,000.

HTC’s Vive headset, priced at $799, has meanwhile been delayed by “payment processing” issues. New Vive orders aren’t expected to be delivered until June.

Still, Superdata backed its earlier forecast for longer-term growth, saying VR sales will reach $22.86 billion by 2019.

…Here Come the Virtual Reality Movies

They’re all the buzz this week at the trendy Tribeca Film Festival in New York — which has set up a “Virtual Arcade” where you can don a VR headset and take in as many as 18 film shorts pushing VR’s capabilities to the limit.

Case in point — an animated featurette called Invasion! “When hostile extraterrestrials land on Earth, only an intrepid bunny can save the planet,” writes Times reporter Neil Genzlinger. “Or, actually, two bunnies: Look down toward your feet and you will see that you have acquired a rabbit body. The story doesn’t last long, but the sense that you have fur lingers awhile.

“If you’ve never watched a film in this format, it’s rather mind-blowing,” he says. “But you may need a neck massage afterward from looking up, down and all around.”

Heh… We can only imagine what you’d need with VR for porn — which has been blazing technological trails for decades, to the immense profit of early investors in technologies like streaming video, digital video cameras and even digital payment systems like PayPal.

Onward and Upward,

David Bross
For, The Daily Reckoning

P.S. Click here to see our full investigation into what the future of virtual reality could look like and how you can benefit from owning the hidden companies driving the biggest advances right now.