1. Chemy JMHT's Avatar
    According with some developers interviewed by VentureBeat it's very hard to get profit for the smaller developers.

    OK, I think it's right, is hard, but I don't think impossible at all, I think now the best way to do it is receiving as much help as possible, I am figuring out how to achieve that (not a developer, only trying to see how to do it), and I think the main problem is catching the attention of the big ones, right now with the new alliance among some of them (GVRA) should be a little bit easier not again not easy enough.

    Well going back to the article and hoping it doesn't discourage you but the opposite, to try harder:

    VR developers begin sharing some of the ?hard truths? of virtual reality?s rough economics | VentureBeat | Arvr | by Jeff Grubb
    12-14-2016 10:55 PM
  2. pjs37's Avatar
    Sorry but I am not buying it. By all accounts from the little research I have done this was not a terrible VR game to VR game reviewers. But reading the reviews I see immediately what the problem is between audiences and developers.

    Let us pretend I am a normal gamer who has money for a gaming PC and a HTC Vive and I love Steam. I want to use this thing so I go to the VR Section on Steam and click through the popular releases. I see this game: Well it looks to me from the brief trailer and the screenshots that this is a minecraft clone that has guns. Well that has only been done a million times before on Steam. Darn it I want a game that makes my Vive sing and justify the huge amounts of money I spent on this. Heck my iPad can play Minecraft...So I move on.

    The last official numbers of the Vive sales I saw it was 140k units sold. They sold 2300 games to this market which is desperate for any compelling game. I am sorry but that has less to do with gamers expectations being too high and prices being too low then it has to do with presentation and the game being compelling to the target market. I get it they made DayZ so they are not idiots but come-on. Lets not blame the audience on this. Exclusives, lock-ins whatever had nothing to do with this. Yes developers should work with the hardware companies to utilize the full potential of these games but lets try by making compelling games instead of glorified tech demos with only a few short levels and a handful of maps and wondering why people won't dish out $30 for that.

    Development costs are the same as it is for any other game being developed. Yes your market is much smaller but I believe they are a lot more ethusiastic and willing to spend money then you give them credit for. This market has spent $700+ on gaming computers and $600-$800+ on very specialized hardware. I don't think spending $30 or even $40 on a game is not a stretch. But give them a good compelling game to want to spend that money on.
    12-15-2016 07:57 AM
  3. pkcable's Avatar
    I've asked a couple of my developer friends to comment here.
    12-15-2016 10:11 AM
  4. EgoAnt's Avatar
    I have no doubt that it is difficult to make a profitable game at this point. There are lots of developers creating VR content for a market that is a small fraction of the size of the larger PC gaming market. Plus, because VR is a moving target right now, with new hardware and software releases almost daily and few established standards, your development and support time are increased. Then, on top of all that, your game needs to be highly optimized to run at a steady 90 FPS.

    All of that is expensive. We are seeing the same things we saw in the early days of iPhone development, but without the same level of adoption. For me, making a VR game right now isn't about making a profit, it's about getting in at the ground floor of a new platform that could either take off like a rocket as costs come down, or explode on the launch pad.
    Chemy JMHT likes this.
    12-15-2016 10:41 AM
  5. Russell Holly's Avatar
    There's so much that goes into making a great VR experience, it's incredible. On top of just building a great experience you have to find a way to get it out there so people notice it. Thinking about Fantastic Contraption, I'm pretty sure their Mixed Reality experiences are some of the only reasons people know about that game.

    Seeing people complain about pricing is frustrating. These experiences clearly require more work than your average game, and everything can't be a dollar.
    12-15-2016 12:20 PM
  6. Chemy JMHT's Avatar
    One good strategy is to simply develop to everything, I mean, you make you game 3D and VR compatible and you will have an already established market and also the new VR market.

    I didn't really believe this is a non-profitable market, but the main problem is some are very talented developers, but not good enough in marketing, also there is a good part of luck related.
    12-15-2016 01:32 PM
  7. VirtuaTyKing's Avatar
    I saw a similar article stating that this is the reason many dev's are picking up exclusivity deals.
    12-15-2016 03:57 PM
  8. KermEd's Avatar
    For what it is worth (and my two cents). I'm a bit tired, so sorry if this is rambly.

    VR is a niche market, you need to understand how niche markets work, if you want to be profitable.

    Most VR development houses (ourselves included) have proper business plans and game design documents - they will need both to work with companies like Sony. Which means, they should be able to roughly estimate their sales volumes, target market size and know exactly what platforms they are targeting. In other words, these companies should know within a reasonable margin of error "how many users they can sell to". Companies like the one in the article should know exactly what the estimated value is before even stepping into the market.

    Now, before we go too much further, it is important to understand that most studios will do better in any niche market, the less other studios step in. You want to be the only company serving products of type X. This reduces the number of competing titles in the market, and significantly increases their influence and market potential, as well as building up a unique fan base belonging to the company. This is how I did well on BlackBerry, it is a niche market, with few developers, and by building for that experience, you can corner part of that market for yourself. As BlackBerry profitability increased for mobile developers, I started to find all of my apps and games cloned by no-name companies overseas.

    So, the less the market seems viable, the more money companies like those in the market stand to make. This is important, because it suggests there is an alternative reason behind such an article.

    In reality, games for VR studios should be broken down into three root categories...

    • Non-VR PC games (200+ million players) ~ 5$/title
    • Mobile-VR (10+ million players) ~ 2$/title
    • HD-VR (400k players) ~ 20$/title

    If a development team can't build for more than one headset at a time ... HD-VR could be as low as 80K players - if they know this in their business plan, they should know right away what their real sales potential is. If they sell their game for 10$, even at 100% market saturation, they would be capped at 800,000$. That is a firm limit and any niche market (VR included) should have this consideration into their business plans. For example in BlackBerry 10, our firm market limit at the launch of the Z10 was 10 million users. No matter what you do, you will not sell to more than the maximum unless you support multiple platforms.

    So, what many VR shops like our own Red Iron Labs do - is focus on building for multiple experiences (for example, our games support ~11 headsets, and no headset, without sacrificing the game experience) or on exclusivity agreements. This allows us to grow our audience to 200+ million, instead of limiting it to 400k or ensuring we are payed back for the cost of limiting our reach. Building for only one or two experiences is a short sighted approach if you are trying to be profitable in VR. 2016 & 2017 is very much expected to be an experimental experience at best --- developers should not expect it to be a get-rich-quick scheme for game development - and building VR only experiences, need to consider this very carefully in their ROI estimations.

    So, in otherwords, yeah. VR is a smaller market. Now, there are some external influences.

    Remember how I said that negative articles help niche companies make money? The opposite is true as well.

    Unfortunately, a series of articles went out at the start of the big development push into VR - these articles suggested it is an extremely large purchase market and almost a guaranteed win. Many development houses bought into this without doing their due diligence. This also caused a large volume of mobile devs (most with no VR experience) to suddenly begin pumping out VR 'games' (many of which are not really good VR experiences or even really games). This results in a market saturation with many low budget titles ... much like what we've seen on mobile platforms in the past. This is hitting VR as we speak and those titles started coming to the surface right just before these guys pumped out their title.

    So, is VR really profitable? Well, niche markets are funny. You usually get a much deeper penetration rate (in mobile games for example, the average game reaches less than 0.01% of the market). A niche market has less to choose from, and I've found it isn't too difficult to get as high as 10-15% market penetration. This means the "average" sale point of a game, is probably going to do much much better in a niche market. But with a much lower ceiling or cap.

    There is also Lloyds rule of Marketing. I always say, if you get your game to 4 out of 5 stars, regardless of any platform, your game at that point depends entirely on marketing. Getting your game to 4.5 out of 5 will make almost no difference.

    So, my experience? It is incredibly early to say for certain. But yes, VR is not a one-stop wonder for making cash. It is profitable, but only within reason, and only if you follow a smart ROI and planning process and only if you approach it responsibly. But if you decide to roll the dice ... and make a VR only game with a limited maximum number of users, especially "just another zombie game" (VR horror players is a secondary niche market) or a puzzle game (targeting only casual players)... in my opinion, you begin building for a subset niche market of a subset niche market ... and you have to know exactly how well that will sell...

    That said! You also have to weigh the truth of games sales against the "flappy bird" stories in VR as well (fantastic contraption). Every market has averages and limits, and everything is a numbers game at the end of the day. But we are starting to get way too many developers building way to many 'things' (good or otherwise) for a limited user base. It'll swing back the other direction for a while.
    12-16-2016 09:14 PM
  9. Chemy JMHT's Avatar
    @KermEd your answer is more like an article than an answer.

    Very clear, all the points touched and explained.
    pkcable and KermEd like this.
    12-17-2016 11:55 PM
  10. KermEd's Avatar
    @KermEd your answer is more like an article than an answer.

    Very clear, all the points touched and explained.
    Thanks!! I felt it was super rambly
    12-19-2016 11:28 AM

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