The COVID-19 pandemic has dealt a severe blow to the VR arcade industry, and since even before the virus it wasn't exactly a thriving business, TechCrunch argues that he probably won't recover.
VR arcades were born a few years ago when it was realized that the technology was not taking root for the average consumer, between high costs, low frequency of use and the need for a dedicated space to use it. Several companies have made significant investments in this regard – HTC with its Vive brand has staked a lot on it, also considering the increasingly rapid decline in the smartphone sector. Second TechCrunch, the VR arcades can even be considered an attempt in extremis to save a sector that, in the face of massive investments in previous years, was not reaping the desired results.
In the last few weeks, there have been at least three closures of companies operating in the world of arcade VR. The US subsidiary of Sandbox VR has filed for bankruptcy, while Disney has not renewed the lease to the startup The Void, which operated in the Downtown Disney complex in California; finally, Apple, we said just yesterday, bought Spaces, which had closed in recent months due to the pandemic. We know that Apple is working on building something in the world of virtual reality, but it's hard to imagine that it will keep us reopening Spaces as it was.
As we said, the pandemic has hit this type of sector hard for reasons that, knowing how the virus spreads, it is obvious to imagine; but the difficulties were present from before. As early as 2018, for example, IMAX had closed its last seven arcade VR – here too, after investments in the tens of millions of dollars just a few years earlier.
The problem is that, although the most acute phase of the crisis has passed in most of the world, the pandemic is still far from being resolved. For example, in Italy we are observing a growth in infections in this period, due to holidays and the increase in travel, even if it is fair to point out that for now the lethality is significantly lower. In America, however, the situation is far more serious, and the death toll is rapidly approaching 200,000. In short, it will still take some time before it is safe (and above all that it is perceived as safe by the vast majority of the population) to return to playing with virtual reality in closed spaces and with shared equipment. This means that probably several other startups with not too deep pockets will be forced to close, or to radically change their business model.
In general, we have often said, VR is turning out to be a hole in the water for the vast majority of companies who believed in it – net of a scenario as remote and impossible to predict as the one we are currently in. To date in the USA among the companies of a certain level there is practically only Facebook with its Oculus – Facebook Connect will be held on September 16. Microsoft is creating spaces in the working world with HoloLens, which however operate in a slightly different sector, that of augmented reality. Magic Leap had promised great things, but in the end the final product disappointed a lot, and sales were practically nil. Now this startup is also trying to reinvent itself in a business key. But the success of the operation is far from obvious.
Could the VR industry be saved? Yes, the source argues, but it will take a radical change in technology and consumer habits. It takes an epochal innovation to make virtual reality palatable – a bit like when Apple introduced capacitive screens and finger-friendly UI to the world of smartphones, which already existed but were only appreciated by a niche of users.
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