Microsoft may not have stuck the landing with the launch of Xbox One in the latter half of 2013; however, it seems to have done everything right in the years that followed to not only change the public perception of the Xbox brand but set a new benchmark for the future of the video game industry. From backward compatibility to Xbox Game Pass and the upcoming Project xCloud, Microsoft is determined to make video games more accessible than ever been before. So why isn’t the company behind Xbox interested in Virtual Reality?
Long before the release of Google Stadia and Project xCloud, the video game industry was determined to make Virtual Reality the future of the medium. What started with the release of the Oculus Rift on PC soon expanded to the HTC Vive, the PS4 exclusive PSVR, Nintendo Labo, Oculus Go, the completely wireless Oculus Quest, and countless others for mobile phones and PC. VR is slowly becoming more accessible to the wider audience with higher quality games available, but it’s a niche corner that has yet to win over the larger player base.
In a recent interview with Stevivor, Executive Vice-President of Gaming at Microsoft Phil Spencer a.k.a. the Head of Xbox commented on the companies plans for Virtual Reality and whether or not Xbox Scarlett would support the technology. “I have some issues with VR — it’s isolating," Spencer said when asked about Microsoft's stance. "We’re responding to what our customers are asking for and… nobody’s asking for VR. The vast majority of our customers know if they want a VR experience, there’s places to go get those. We see the volumes of those on PC and other places.”
This may come as a surprise to many considering the development of the Xbox One X. While the Xbox One wasn’t designed to support VR and the companies venture into VR development ended as soon as it began, the Xbox One X was developed with the capability to support the peripheral. When the console was originally announced as Project Scorpio, VR support was confirmed as one of the consoles pillars alongside 4K HDR graphics and 6 teraflops of computing power. Of course, that capability never came to fruition and now it's clear why Microsoft chose to move away from the technology in favor of other avenues.
The data suggest that Phil Spencer is spot on with his assessment of VR gaming. Perhaps someday this market can develop, but it's been years and the overwhelming majority of games consumers just don't care. Rounding error of rounding error for games spending, tiny niche.— Mat Piscatella (@MatPiscatella) November 26, 2019
In October 2019, it was reported that the PS4 had become the second highest-selling video game console of all time at 102 million sales worldwide, while PSVR was last reported at 4.2 million in March 2019, earning Sony almost $2 billion in revenue. PSVR has sold an impressive number of units, especially when compared to Oculus Rifts' 1 million, Quests' 0.4 million, and HTC Vive’s 1.4 million, but not when compared to the overall size of the PS4 install base. Video game analyst Mat Piscaltella commented on the situation stating the data for VR in 2019 suggests Phil Spencer’s assessment is spot on, calling Virtual Reality a “permanent niche” product due to the play pattern, pricing of the technology, and the environment required.
Phil Spencer has gone above and beyond to change the public perception of Xbox One since launch and push the future of video games in a new and exciting direction. "We're responding to what our customers are asking for,” Spencer said. While PS5 will likely support the existing PSVR as well as any future iteration of the VR tech, Xbox Scarlett will focus on cloud-streaming through Project xCloud, and its Netflix-like game subscription service, Xbox Game Pass. Public reception to xCloud has been very positive so far compared to the mediocre launch of Google Stadia, and Xbox Game Pass reported to have been at 9.5 million active users in a NeoGAF thread back in May.
Phil Spencer knows that even the PSVR, the most popular VR headset available on the market right now due it's price and ease of use, isn't selling millions of units every year. For new technology that's still in its infancy, VR is coming along nicely and the product and games are improving year on year with more expansive experience like the recently announced Half-Life: Alyx. However, VR is a niche corner of the market that doesn't have the same demand as Microsoft is seeing with backward compatibility, Xbox Game Pass and Project xCloud.
Xbox Scarlett isn't due to release to the public for another year and it the Xbox One X has shown audiences anything, companies like Microsoft will shift with the market in order to provide the best experience possible. Right now, Xbox has no plans to integrate support for VR technology but that could all very well change if the demand is there. For those interested, here's our full review of Google Stadia, Microsoft's direct competition to Project xCloud and video game cloud-streaming.