Xbox VR: Market still too small for Microsoft

Xbox VR: Market still too small for Microsoft

The VR market is currently too small for Xbox Game Studios, and will probably remain so for a long time. 

VR games from Xbox, let alone a VR headset for the Xbox Series X, are not expected in the near future. Matt Booty, head of Xbox Game Studios, told The Hollywood Reporter that the market for virtual reality and augmented reality is simply too small to be commercially successful at this point.

For a VR game to be worth Microsoft's while, it would need to reach around ten million plays, Booty explained when asked if Xbox Game Studios could envisage a foray into VR or AR.

Xbox Game Studios: No VR games for now

“I think for us, it’s just a bit of wait until there’s an audience there. We’re very fortunate that we have got these big IPs that have turned into ongoing franchises with big communities. We have 10 games that have achieved over 10 million players life-to-date, which is a pretty big accomplishment, but that’s the kind of scale that we need to see success for the game and it’s just, it’s not quite there yet with AR, VR,” Booty said.

So, Xbox remains, at best, an interested VR viewer. Xbox CEO Phil Spencer praised Sony, Meta and Valve for their developments in virtual reality in 2021, but even then, he emphasized that Xbox wanted to focus on software rather than hardware.


Cloud gaming instead of VR?

Microsoft's Xbox has been in direct competition with Sony since the launch of the first console in 2001. Over the years, both manufacturers have tried to develop unique selling points for their devices. While Microsoft tried its hand at motion control with the unsuccessful Kinect, Sony later developed the PlayStation VR.

Today, Xbox Game Pass and Sony's Playstation VR 2 are the main rivals. Microsoft currently prefers to experiment with niche cloud gaming. “For us, to be clear, it is a very, very small market. I’m not even sure you would call it a market yet, in fact. It’s very small usage and very small audience,” Booty said. “So for us, it’s something that we consider almost more experimental that we’re trying out to see how it works.”

Incidentally, at Meta Connect 2022, Microsoft CEO Satya Nadella announced plans to bring Xbox Cloud Gaming to the Quest platform. Microsoft and Meta have not yet announced a launch date.

Sources: The Hollywood Reporter