Virtual Reality Gaming

Whilst virtual reality technology is becoming increasingly popular, it still faces challenges in the gaming sector. Let’s take a look at the history of VR gaming and the challenges it faces.

An entry by Martin Hartmann and Aaron Fröhlich

Thursday, 8 September 2022

Media, Technology and Society

History of Virtual Reality Technology

Virtual Reality has a long history. As early as 1838, Sir Charles Wheatstone was able to construct a machine that allowed him to view an image and make it appear three-dimensional. In the decades that followed, many inventors continued to explore the idea of immersing oneself in different worlds. And video games seem like the perfect medium in which to apply and further develop this technology. A look back at the history of VR reveals that the technology has seen many successes, but also its fair share of failures.

1956 – The Sensorama VR machine

One of the first VR machines was the Sensorama, invented by cinematographer Morton Heilig. It was capable of stimulating multiple senses through 3D video, audio, vibrations, smell and even wind. Heilig regarded it as the ‘cinema of the future’.

1968 – The Sword of Damocles

In 1969, VR technology made huge strides thanks to Ivan Sutherland. He invented the first head-mounted display (HMD). Although it could only display virtual wireframe shapes, it was capable of tracking the user’s movements. However, there was one major drawback, which earned it the nickname “The Sword of Damocles”: it was so heavy that it had to be mounted to the ceiling.

1985 – VR goggles and use cases

Jaron Lanier and Thomas Zimmerman at VPL Research, Inc were the first to sell VR goggles and control gloves. During this period, VR found applications in the military, in flight simulators and in NASA training simulations.

1993 – Sega attempts its own VR headset

By 1993, VR was already being used as a gimmick for games in arcades. The gaming company Sega then announced that it would develop its own headset for arcade games and the Mega Drive console. Shortly afterwards, the project was quietly cancelled. Sega’s official reason for this decision was that the experience was so realistic and immersive that players could injure themselves whilst using it. However, it was more likely that the VR helmet caused people to suffer from motion sickness.

Figure 1: Sega VR glasses were announced but never released (Source: Sega)

1995 – Nintendo’s failure with the Virtual Boy

Nintendo, Sega’s biggest competitor at the time, actually released its own VR console: the Virtual Boy. Unfortunately, it turned out to be one of the biggest failures in the company’s history. Common complaints from gamers centred on the lack of games and the fact that it was uncomfortable to use. It also only used a red and black colour palette. Nintendo also included health warnings for liability reasons, which
contributed to the Virtual Boy’s commercial failure.

2012 – The next generation

VR was never dead, but it took more than 15 years for mainstream interest to return with the Oculus Rift. The Kickstarter campaign for the VR headset raised more than $2.4 million, with over 9,500 people backing the project. In 2014, Facebook (now Meta) acquired Oculus for $2 billion. In the years that followed, other major companies such as Sony, Google, Samsung and Valve developed their own VR headsets.

2022 – Where is VR now?

Today, there are several VR headsets on the market that can be used to play video games. Headsets are also paired with controllers that allow the player to use their hands within the virtual space. Three popular VR headsets are:

Valve Index (2019): Valve hosts thousands of PC games on its Steam platform. The Valve Index benefits from this integration.

Meta Quest 2 (2022): Meta has completely dropped the name Oculus Rift and now sells the headset under the new name Meta Quest 2. The headset can also be used without connecting it to a PC, which is a major advantage for the consumer market.

PlayStation VR 2 (2023): Sony stands out by targeting console gamers with PlayStation VR. The second edition is rumoured to be released in 2023.

Figure 2: Three modern VR headsets (Source: Valve, Meta, Sony)

With the recent rise in investment in the VR market, experts also expect sales to increase. Forecasts from 2019 predict that VR sales in gaming will continue to rise steadily over the next few years.

Figure 4: Revenue from virtual reality gaming is expected to rise (Source: PwC, Omdia)

So what is played in VR? What works, and what doesn’t?

VR as a gimmick

With VR hardware for games finally being released from 2014 onwards, many well-known game developers began incorporating VR as a fun gimmick into established titles such as Fallout 4, showcasing their technology to a wide audience. This naturally led to players of traditional games having their first experience with VR hardware. But as time has shown, this did not really catch on.

Intuitive immersion > traditional gaming

The unique, novel nature of using VR did not sit well with previously established games that were played using traditional monitors and controllers. Moving characters whilst standing or sitting still with a VR headset on proved to be a major issue. Instead, the popular games seeing rising VR usage turned out to be those that most naturally and intuitively reflect the actual VR player – someone who isn’t moving their feet but is instead sitting in a chair, using their hands and head.

Figure 5: Microsoft Flight Simulator: Deluxe Game of the Year Edition (Source: Xbox)

It is for this reason that games such as Microsoft Flight Simulator and Project Cars have found their way into many VR headsets around the world. In these games, the player’s movements correspond very closely to those within the game. This contributes to a sense of true immersion and helps prevent motion sickness – an unpleasant experience caused by a discrepancy between actual and expected movement. There’s just something about simulation-style games that suits the natural VR experience. However, resourceful game developers have found other ways to make their VR games creatively intuitive. A great example is the popular Beat Saber, where players stand still in a fixed environment, slashing at obstacles that come towards them!

Figure 6: Beat Saber player merged with the in-game environment (Source: Experience VR)

VR as a social platform

By blending gaming and socialising in a way, VR has also become a social trend, where players can interact in virtual spaces built using game engines. In light of the growing discussion surrounding the concept of the Metaverse, platforms such as VRChat are therefore becoming increasingly important.

Figure 7: Board game night on VRChat (Source: Deutschlandfunk Nova)

Users there create avatars to represent themselves and meet in dedicated virtual rooms that can be rented using real money. Just as you would for a party in real life! And with the number of VR headsets in ordinary households on the rise, one can assume that this is just the beginning… That is, if VR gaming can overcome the challenges still holding back its market and those that lie ahead.

Challenges facing VR gaming

The hardware-software dilemma

One of these challenges is a persistent shadow that has hung over the industry from the mid-2010s right up to the present day: low hardware sales lead to limited potential for software sales. And where sales potential is low, investors naturally shy away from putting their money in. It used to be safer to invest in traditional gaming, for example. The result: no software is produced for hardware that is already struggling, because investors simply do not see the return on investment (ROI) needed to fuel the ambition of VR game developers.

A vicious circle. At least, that is what many VR developers say in interviews. So why should the average consumer buy expensive VR equipment? For years, nobody could really answer this question (except for VR gaming marketers, of course). The answer could lie both in the tireless efforts of game developers hoping to see their dreams come true, and – perhaps more likely – in the heavy investment in VR gaming currently taking place, as mentioned earlier. And one of these investors might actually go a little too far, potentially posing the next challenge on the horizon.

Risk of a Meta monopoly

Still with us? Then perhaps you’ve also noticed something that stood out when we presented the popular state-of-the-art VR hardware packages earlier. Among the three, one might notice that the Oculus / Meta Quest 2 is backed by a company not exactly renowned for its reputation in the gaming market: Meta, formerly known as Facebook. The world-renowned social media platform operator has eagerly jumped on the VR gaming bandwagon in recent years and is continuing to consolidate its position within it.

Figure 9: Highest VR headset sales for Facebook/Meta (Source: SuperData Research)

Whilst it had already captured the lion’s share of VR hardware sales in 2020, almost 80 per cent of VR headsets sold in 2021 were also Oculus Quest 2 (now: Meta Quest). And this is just the trend for 2020 and 2021. To this day, Meta continues to build on its investment in the gaming sector by acquiring an ever-increasing number of renowned game development studios, such as Beat Games. Headlines about Meta’s mergers and acquisitions are appearing on tech news sites with increasing frequency. Given that Reality Labs (Meta’s VR business) is currently operating at a loss, it is clear that Meta is pursuing a market strategy that many would describe as aggressive. And so, after the US Federal Trade Commission had already filed a lawsuit against Facebook for creating a monopoly not long ago, Meta may once again find itself at the centre of antitrust discussions. This time, however, the focus is solely on its VR business. If this situation escalates in Meta’s favour, the VR gaming market could find itself in a tricky situation, with a giant company controlling both platforms and development.

Conclusion

One thing is crystal clear: VR technology, and VR gaming in particular, has faced – and continues to face – its share of challenges. Since VPL Research unveiled the iconic and pioneering design of its VR headset in 1985 and Sega launched its first gaming applications with a similar design, the hardware design has not changed much: it is still a headset comprising goggles. It is still used in a stationary position today, with no movement of the feet. Hand-held controllers are
still mainly used, with the only innovations being in finger precision. So, evidently, the most obvious changes have taken place everywhere else: game engines have become much more complex, 3D space has been mastered, and the computing power of hardware has begun to soar, with ever-increasing resolutions and refresh rates. Game developers have earned their standing as respected artists who create sophisticated
on-screen experiences. Gaming, in general, has become a widespread social phenomenon as well as a well-accepted part of the media landscape. All these developments paved the way to challenge the limits of traditional on-screen games by bringing gaming into VR. The increasingly respected game developers are finally exploring more of what can be achieved in VR, in an immersive way. What used to be more of a dream originating from niche tech enthusiasts has thus become a mainstream inevitability. And it is certainly this very mainstream appeal that is fuelling the development of VR gaming. Investors clearly see the potential now and are only just beginning to help take VR gaming to the next level. But in order to get it right and really let development take off, the gaming market as a whole will need to strike a balance between mainstream appeal and
independent creativity.

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