Samsung, Google, and Qualcomm Collaborating an XR Device

Image courtesy Samsung
The News

In early 2023 Samsung formally announced that it was collaborating with Google and Qualcomm to build some kind of XR device, but revealed no additional details.

What it Means for 2024

We still don’t know exactly what Samsung and Google are building, but there are signs that the device will be revealed (if not launched) in 2024. This marks a re-entrance into XR for both Samsung and Google.

Back in 2015 Samsung worked with Meta (at the time, Facebook’s Oculus division) to launch what was technically the company’s first consumer headset, Gear VR. The mobile-phone based headset saw several iterations over the years and reportedly moved millions of units, but for a wide range of reasons people didn’t continue to use the headsets and Samsung and Oculus abandoned the phone-based form-factor. Samsung was also one of a handful of hardware makers to build a Windows Mixed Reality headset in collaboration with Microsoft. But that venture was eventually disbanded.

Google was also pretty early in the XR space and in 2016 launched its own phone-based VR headset, Daydream View. Similar to Samsung, the device saw a few iterations but usage didn’t persist and Google abandoned the effort in 2019. Google also acquired key early PC VR studios—those behind Job Simulator and Tilt Brush—and even launched a PC VR version of Google Earth. All of which have been left to wither except for Owlchemy Labs, the Job Simulator studio, which continues to make VR games today.

Given this string of abandoned XR attempts, we can be sure that both Samsung and Google would not be re-entering this space lightly.

Very likely the move itself and the timing is a somewhat forced effort to try to keep Apple from taking an early foothold over Android in the XR space. The big question on my mind is if Samsung and Google have internalized their prior missteps, or if that knowledge has been scattered as past XR projects were abandoned?

Microsoft Officially Abandoning Windows VR

The first wave of WMR headsets launched in 2017 | Image courtesy Microsoft
The News

Microsoft announced that it plans to remove support for its entire WMR platform on Windows, which will make Windows VR headsets incompatible with future versions of Windows.

What it Means for 2024

Just as rivals Samsung, Google, and Apple are all jumping into XR, Microsoft is dropping out. At least that’s the case for its Windows Mixed Reality platform.

Since the company announced that Windows Mixed Reality will be deprecated, we’ve learned that Windows Mixed Reality and Windows VR headsets will continue to work at least until late 2026 for consumers and late 2027 for enterprise customers. At which point Windows Mixed Reality software will no longer be available for download. That will mean Windows VR headsets that are already set up will remain functional (though officially unsupported) until users update to a version of Windows that doesn’t include Windows Mixed Reality.

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Considering that Windows Mixed Reality headsets make up only about 5% of the PC VR market and they will continue to work normally until late 2026, the impact for 2024 will be minimal.

As Windows VR is left to wither, it remains to be seen if Microsoft will press ahead with HoloLens 2 or eventually abandon that platform as well.

Meta VR Content Revenue Slows as it Continues to Invest Billions in XR

Meta CEO Mark Zuckerberg wearing Quest 3 | Image courtesy Meta
The News

Meta revealed that Quest Store games and apps have generated over $2 billion in revenue as of October 2023. While the store is still earning for developers, looking at revenue over time shows that things have cooled off compared to prior years.

And despite being the leading force in XR today, Meta still isn’t even close to turning a profit overall from the investments it’s making in its XR division, Reality Labs. In late 2023 the division hit is lowest quarterly revenue since it began reporting that figure.

What it Means for 2024

As of its last quarterly update, Meta has spent a staggering $43.5 billion on Reality Labs. And even when you count what it has earned back, the division is still in the red by $37.5 billion. While many of those investments surely haven’t manifested into marketable products yet, there’s only so long that investors will tolerate investments that aren’t seeing near-term returns. And even for a nearly trillion-dollar company, $37.5 billion is nothing to sneeze at.

We won’t know for a while yet how well the 2023 holiday season looks for Reality Labs (Q4 has always been is strongest quarter), but my gut feeling is that it won’t be materially different when compared to the division’s track record overall.

Every quarter that goes by without Reality Labs justifying money spent will mean more pressure from investors. This puts Meta in a curious place… on the off chance that Vision Pro is a flop, it could be the last straw that makes the company’s investors fully turn against the existence of Reality Labs.

Purely from the perspective of the company’s other activities, Meta has yet to find real mainstream traction with its XR products. And with Meta’s continued struggles to make its XR services easy and appealing enough for the mainstream, there’s no reason to think that will change in 2024.

Valve Launches SteamVR 2.0 and Steam Link on Quest, Bolstering Rumors of a New VR Headset in the Works

Image courtesy Valve
The News

After a period of near complete silence about the company’s XR plans following the launch of its Index VR headset and Half-Life: Alyx, Valve busted back onto the scene in 2023 with the launch of SteamVR 2.0. This long-promised update went a long way toward modernizing the SteamVR interface while adding Steam platform features that were previously missing.

And not long after, Valve launched Steam Link on Quest, allowing customers an easy and direct pathway to play SteamVR content on their headset without going through the long-forgotten Oculus PC software layer.

What it Means for 2024

Valve works in mysterious ways and it has always been difficult to predict exactly what they’ll do next—there’s not a whole lot of software companies out there that also make VR headsets and handheld gaming PCs.

Valve’s latest moves have shown that the company hasn’t given up on VR. And that gives new meaning to its long-rumored follow-up to Index, which has become to be known as ‘Deckard’. Deckard is said to be a wireless VR headset that would stream games from either a host PC or dedicated VR console.

SEE ALSO
Meta VR Studio Behind 'Lone Echo' Shuttered After No New Game Release in Nearly Three Years

With sales of the company’s Index headset finally starting to wane in 2023, Valve may feel renewed urgency to get its rumored headset out the door sooner rather than later.

What were your biggest XR stories of 2023 and what do you think is coming in 2024? Drop a line in the comments to let us know!
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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."

  • Very nice summary. I would add RayBan Meta smartglasses: they are good according to many reviews, and they just added integrated AI, which is very cool (but scary from the privacy side)

  • ViRGiN

    > HTC launched its first real competitor to Meta’s Quest line
    bruh.

    • Ben Lang

      In the sense that it was a 6DOF headset with controllers that played some of the same game. Prior to that, Vive Flow was trying to be something else.

  • kool

    Quest didn’t respect the console pipeline. It’s only been out 3 years of course it’s still selling. You should space your products 4years apart to complete the cycle. It should have been quest 2 for 2years then quest pro and quest slim the last year to allow late comers in. If quest 3 had launched this year it would have had more games at launch and some attention after apple launched it at device. Sony needs to show gamers what they have badly and sooner than later astrobot and Wipeout will do for now but they need at least 5 more aaa to gain momentum. Pcvr is finally getting better support with uevr but they still have a ways to go to build vr emulator for all games, honestly idk what pc gamers want they buy quest to play pcvr so let’s see what happens.

  • Octogod

    Purely from the perspective of the company’s other activities, Meta has yet to find real mainstream traction with its XR products.

    Meta has sold well over 20,000,000 headsets in three years. This beats Xbox and Xbox X/S, and (after this holiday) likely on par with the Nintendo 64. It would be in the top twenty game consoles sold of all time.

    To put this in context, the first iPhone sold 6m in the first year. In three years, all iPhones sold 26m. Quest sold right in that same range.

    • Ben Lang

      Units don’t equal traction.

      Gear VR moved millions of units and was disbanded.

      Kinnect moved tens of millions of units and was disbanded.

      The question is: how many headsets are actually being used on a regular basis? Even though it is the dominant one in XR, Quest is by most measures still a small marketplace that not yet self-sustaining.

      • Octogod

        Units are always the best indicator of traction for tech products. To ignore them is to make up an arbitrary metric unused by the tech industry or the market for decades.

        That said, it’s fine to focus towards other metrics of success. if your chosen metric is weekly or monthly active users, then what are you comparing this against? Console? Mobile? Social? And if so, what are those values? My point being, you can’t make a data argument with no data.

        If it’s revenue, and you state that Q4 is the brightest, then cropping data collection in the summer will make the numbers look like a drop in revenue. When 2023 financial release, we can watch the numbers go up and learn why charts are compared at equal timeframes.

        • Christian Schildwaechter

          50mn+ Google Cardboard were distributed, so it must be the most successful VR platform ever. If not, unit numbers must be pretty useless.

          You compare to something similar. So you don’t compare Q3/23 to Q4/23, but Q4/22 to Q4/23. Or you divide the reported total revenue of games sold through the number of devices sold, and end up with more than twice the numbers of games sold for each PS4 compared to Quest 2. Obviously comparing game sales directly makes little sense with hugely different user bases, so you have to find a way to make them comparable, like looking at game sales per device.

          Unfortunately companies don’t release a lot of useful information, so there is always a risk in getting things wrong. Ideally one compares different sources, and for a long time the yearly Quest sales cycle was visible in not only Meta’s quarterly numbers, but also activity on Steam, which is about 50% Quest, and also the number of new reviews for top 20 apps on the Quest store.

          It’s fair to assume that if three different data sources show very similarly repeating curves, these are real trends, not just some artifacts due to improper use of metrics. And you can literally see the numbers jump up after Christmas and then a almost similar drop about four months later in several years. Which is why looking at active users is so important.

          • Octogod

            No one is comparing a <$10 toy where all apps are free to $300 tech devices where most apps cost money. If they are, they're either disingenuous or stupid.

            Active users or time on device isn't reported, which is why sales of hardware is the only consistent public data point.

            Active users is an ideal goal, but it's one guaranteed to lose on. Device growth though? That is one that is possible to beat consoles in the next three years.

          • Christian Schildwaechter

            – I bought more Cardboard apps than the average Quest user buys Quest games. A significant number of (younger) Quest owners seem to never buy apps, playing mostly Gorilla Tag and other free games. In surveys 26% of US teens say they already own a VR HMD. Checked against Quest sales, this group makes up >75% of all Quest owners. The same survey now asks about VR use every six months, with reported 5% daily, 12% weekly, 34% monthly, and 48% less than monthly or never using their HMD, and activity numbers falling from survey to survey.

            – Sales of hardware usually isn’t reported either and therefore no public data point. Estimates and upper limits had to be calculated from quarterly MRL revenue, Quest recall numbers, leaks and Qualcomm PR blunders. For active user counts we have relied on cross-referencing different sources like Steam hardware survey, review counts on Quest Store and Steam, concurrent VR user counts and occasionally accumulative Quest store numbers from Meta. We also KNOW that Quest 1/2 had 6.37mn monthly active users in 2022-10 from internal Meta memos leaked to the WSJ, which meant that only 37% of all sold Quest were still in use during that month.

            – In late 2021 Resolution Games presented an estimate of 5mn active users across all VR platforms, based on the usage statistics they saw in their own 10+ VR games published on Quest, PSVR and PCVR. This led to an uproar from VR users claiming that the numbers must be much higher due to much higher unit sales for VR HMDs, but in the end the numbers from Resolution Games proved to be astonishingly close to what could be derived from other data sources referencing completely different aspects of the market.

            – A major requirement for platform growth is more software, which will only be developed if it sells enough copies, and only active users buy software. Which is why developers don’t care about the about 12.5mn Quest 2 sold that apparently only collect dust. They only care about the remaining active users. It doesn’t really help that millions of Quest 2 are given away each Christmas as presents, when the vast majority of users stop using the HMD they didn’t pay for themselves after about 3-4 months with very few apps bought. Which is why the active user number is so important, even if difficult to establish with a large margin of error. Statistics based on cross referencing multiple independent sources is far from perfect, but still way more reliable than someone “believing” in the success of VR just guessing based or making unverified assumptions about the relation between unit sales and active users that turn out to not match reality.

          • Octogod

            * Yes, Cardboard apps were free to $2. Number of apps means nothing.

            * Quest users spend half a billion plus a year on games for the past three years.

            * Yes, the demographic is younger and younger people don’t buy games, they get them free and use microtransactions. As a major report stated last month, the leading game purchase was digital currency or subscriptions, not games. This is not unique to Quest.

            * Sales of hardware is reported on by the HMD vendor. So is number of chips sold by Qualcomm. These are public companies so they share numbers.

            * 37% of sold devices being active is astonishingly high for Quest. It would blow every other HMD out of the water by double, easily.

            * None of what you’re saying matches the publicly reported revenue data from Meta.

            * The verified source I have is the deposit from Meta larger than your salary that comes in each month. :)

          • Christian Schildwaechter

            You’re trying really hard to define Cardboard out of existence, but it had a lot of hype going for it from 2014-2016. And no, apps didn’t go for free to USD 2. I don’t think I payed more than USD 4.99 for any of my apps, but e.g. Mattel had released their own “View-Master VR” cardboard clone and sold matching “reels” on the play store, each for USD 14.99 featuring three different VR environments. They actually sold plastic reels in toy stores for grandparents to give out as presents, but those were basically just play store coupons.

            Others tried to offer “professional” apps, similar to those available on App lab for hundreds of dollars. They just all died with dropping interest and Google abandoning the platform, though there are still holdouts like iVRy for using a phone as a Steam VR streaming HMD, now even capable of 6DoF on ARKit/ARCore capable smartphones.

            No doubt Quest is doing better and making more money, not only relative to Cardboard, but to other existing VR platforms too. So yes, if you compare a 37% Quest retention rate to what is probably a 0.01% retention rate on Cardboard, that’s phenomenal. Obviously 37% is not quite so phenomenal compared to something like a PS4 or Steamdeck, or half a billion a year compared to Apple generating about USD 100bn revenue a year just from mobile games on their App Store. And you were the one that started comparing Quest to Xbox and iPhone sales, so we’re talking gaming devices, not just VR.

            And please point out where Meta has ever reported hardware sales, esp. in units, other than the two display boards hanging in a coffee shop during a press conference that listed the exact production numbers of DK1 and DK2. And which “publicly reported revenue data from Meta” my numbers supposed don’t match. We do all these cross-referencing only because there is a lack of official data, so you just claiming that the results don’t match official data, but not providing a source after I wrote it doesn’t exist isn’t particularly useful. And I’d really like to see these numbers, as it would save me a lot of time/math.

          • Octogod

            As someone who made many Cardboard apps, you’re not correct on facts. Cardboard didn’t have hype, it had accessibility due to low cost, made by Google to purposefully torpedo VR as a low cost gimmick. And it worked. The low cost hardware with mostly free apps was the reason. Anyone who had paid apps died, including the View-Master line which was quickly discounted (I have the whole set). When the cuteness wore off it died very fast. It was the single most damaging possible launch for VR.

            The contrast here is that there is an economy on Quest. This is one which developers can survive by making software, which has never happened before in the history of VR. Most developers who worked on Cardboard or Rift games left the industry. Hell, even Insomniac lost $20m+ on their VR apps in the Rift days.

            You can’t compare phones or social media companies to VR. That’s my entire point. They’re a different category and unique to the entire history of tech, but any tech hardware specifically designed to play games seems more valid. So, Quest beat Xbox X/S and matches Gamecube. Not bad.

            You can’t link to sources here, but Road to VR reported the numbers in March. Very easy.

            If you want to do the math, you can compare this to their public reported revenue numbers and figure out EXACTLY how many HMDs are sold each quarter in that period and for future quarters.

          • Christian Schildwaechter

            The link argument is just a lame excuse for not having sources I’ve heard a thousand times. It’s trivial to provide links, you can replace the dot in the URL with an underscore, you can provide the title of articles and the date, so they can be googled, or just provide a list of specific keywords or an exact quote from the article that can be searched for and result in the article as the first hit.

            made by Google to purposefully torpedo VR as a low cost gimmic

            There is ignorant “Cardboard poisoning the well” nonsense, and then there is utterly insane “intentionally torpedoing VR” conspiracy theory as the next level of twisting history to whatever fits your argument.

          • Octogod

            There are so many logical flaws in your thinking you resort to all of them in one message. Congrats.

            Again, the blog was on RtoVR in March. Very easy to find.

            When you release a $5 product and convince people they shouldn’t buy a $1,000 product, it works at satiating demand. As someone who demoed to tens of thousands, most people felt they’d tried VR when they’d had a cardboard, which was wildly incorrect. It took Google leaving the industry for VR to begin to thrive.

            Labeling things “conspiracy theory” when you don’t like them continues to show the quality of your work.

  • xyzs

    I have big hopes regarding the Apple Vision Pro.
    Finger crossed it will kick the XR trend a lot, and drive tech improvements through competition, interest from the mass and reputation.

    4K RGB OLED screens need to become a new standard, just like having more than full HD phone screens became the norm since Apple made their retina iPhones.
    And standalone graphics need to go from Meta Game Cube to something that is truly enticing for 2024.
    Eye tracking needs to become a standard, not a nice to have option.
    Friction needs to decrease a ton.
    Form factor and weight need to shrink a ton.

    etc.

    I hope 2024 will be less lame than 2022/2023.

  • JB1968

    The big truth and also irony in this very good article is that Meta not only distorted the VR market for competition (with Q2 price dumping) but also shot yourself in the legs by releasing too many “upgraded” products(Qpro, Q3) with higher price than Q2. This all endagers the whole VR industry and also makes the VR section of Meta the biggest chunk of company financial debt. I can’t help myself but Meta is really the evil part of VR.

    • Arno van Wingerde

      Well, I do not agree with the evil part: it is in Meta”s interest to grow the market, although you and I may question their strategy at times.
      But I downvoted you because I disagree with the console cycle part. AFAIK all games till run on Quest2, so it is better to consider the Quest 3 as a Pro model console or a “Quest 2.3”; somewhat better but runs the same games. With a console, many games no longer run on the previous model, but that is not the case here, so no break or major problem for Quest2 owners. The Quest 1 is now dropped for most support or upgrades – there is your console cycle. Contrast this to Sony not supporting PSVR 1 at all.

  • david vincent

    Who cares about Visio Pro ? UEVR is finally out, biggest VR event of 2023 !