Where is VR's Nintendo Switch?

The response to Nintendo's portable/console hybrid has been incredible thus far, with sales almost on track to match that of the original Wii. While the VR market has yet to see mainstream appeal on a level anything close to the Switch, Cloudhead Games CEO Denny Unger does believe that it could benefit from a device that offers similar mobile functionality but when at home can "dock" or tether to a PC to utilize its full power. Moreover, he thinks such a device could help to solve one of the more frustrating issues that VR developers have faced in the early days: market fragmentation.

"I think there's some frustration in the industry internally with the fragmentation of the market," he says. "We've got this weird separation between high-end VR and lower tier VR, mobile VR, and consumers have a real tough time going into this understanding the differences, what kind of impact those different technologies have on the experience, which makes it a big challenge for developers to target one or the other or all. To target all platforms is a huge financial investment because you can't build a high-end VR experience and then cleanly port it to Gear VR or some lower-end VR platform. It just doesn't work that way.

"So what you tend to get is developers making something for Cardboard or Gear VR and then trying to up-sell it to Oculus or the Vive, but it's not as good of an experience because it started on the lowest common denominator. If you're working from the opposite end of the spectrum, you can't really backport it. It doesn't even work. There's no motion control. There's no 6DOF tracking. There's no positional tracking."

"I want a headset that connects to my PC, utilizes all the power of that platform, uses room-scale, uses motion controllers, but then I can unplug the thing and take it with me and suddenly it becomes a mobile computing platform"

To that end, Unger says he's amazed that none of the headset makers have worked towards a hybrid device that can scale based on how it's being used - something you can throw in your bag and use on-the-go with lower performance capabilities or tether to your PC when at home for a high fidelity experience. It would be a natural solution to the fragmentation problem, and developers would likely embrace it rapidly.

"I want a headset that connects to my PC, utilizes all the power of that platform, uses room-scale, uses motion controllers, but then I can unplug the thing and take it with me and suddenly it becomes a mobile computing platform," he explains. "It's got a lower tier, a lower bar of entry, and I can only play certain experiences on it, but I can take the same exact headset with me and it does that job on its own. Then I can bring it back to my PC, plug it in, and I have all that power again. That's what I want to see as a developer. They must've considered it."

Unger doesn't have anything against Oculus and others beginning to introduce mid-tier standalone VR headsets like Go or Santa Cruz, but he'd prefer to see more unification around standards and devices.

"This is just kind of a general frustration that I hear from other developers as well. We should be trying to harmonize and come to some kind of platform parity instead of spreading it out so far," he adds.

The odds are, Unger notes, that some company has already thought about this idea behind closed doors, possibly even prototyped it. But costs could get in the way.

"[Companies are] trying to get price points down... I think that to smash all of these bits of technology into a single headset that is a hybrid and does both things is cost prohibitive," he says. "But I also believe that a smart company could take that and make the system modular and let people add on things to that headset to make it more capable or less capable. So they could start with a lower baseline product, but if they want to bump up its capabilities, they can add a couple things for tethering to the PC and whatever. There's a bunch of ways to do it."

Unger remarks that the frustration around market fragmentation ultimately is borne out of the fact that small studios like Cloudhead have been doing the heavy lifting in VR, and he'd love to see the manufacturers do a bit more.

"Smaller studios are taking the biggest risks in VR right now to really drive adoption for these hardware companies. I guess we want some kind of meaningful voice within that development of stuff. We can't dump money into every platform. It's just not possible," he says.

Another area that he'd love to see more of a unified voice around is in educating the masses on VR and what good VR should feel like in general. This is especially true when developers have to deal with players' expectations around game length and a title's pricing. Cloudhead's communications lead actually took to the Steam forums to address this very issue and the "mistrust" that many gamers unfortunately have of VR developers right now.

"The big problem, and you probably heard this from other developers, is the numbers just aren't there in terms of adoption, in terms of the headsets," Unger says. "So consumers come into it and, rightfully so, they expect pricing models that are standard PC gaming pricing models. Because in that market you're dealing with millions of PCs and because there's such a density of platform attachment there, you can artificially reduce your price point. You can say, 'Well, even though it cost us X amount to produce this product, we can drive that price point down to $5 or $10 a unit because we know we're going to roughly hit a 30% attach rate or a 20% attach rate or a 10% attach rate even, and we'll still make our money back.' But VR fundamentally just doesn't work that way because the numbers aren't there.

"I really wish we had more help from the industry, from the hardware makers, from people who have really strong voices... I would love to see an education campaign to help people out"

"So, especially when it comes to a product that's got high production values, like Call of the Starseed or Heart of the Emberstone, our pricing model reflects the actual production costs... And a lot of consumers come into it thinking, 'Oh, this is just like Telltale Games and you're just doing episodes and why is it so expensive?' Again, the reality is it's a lot more like when Valve did Half-Life 1 and Half-Life 2. They were episodes, but each time they launched a new product, they were dealing with new advancements in the tech. Because of that, there was a deeper production emphasis on research and development and creating new systems or new designs to make this thing better. VR is very, very much like that. It's heavily front-loaded with R&D."

Consumers who come into the VR ecosystem expecting some sort of parity with traditional PC gaming are unfortunately going to have a problem accepting how developers price their games currently.

"The big problem for people in VR across the landscape is educating consumers about the slow growth curve of the market and what developers actually have to work with in terms of numbers," Unger says. "So prices directly reflect that, unless you're being supported by a third-party entity or you've got investors or you've got Valve or you've got HTC or Oculus supporting you somehow on the back end.

"As a developer, I really wish we had more help from the industry, from the hardware makers, from people who have really strong voices in the industry, to help describe why it's different, why pricing models are the way they are, why it's hard, where the effort and energy must go to create good experiences in VR. I would love to see an education campaign to help people out.

He continues, "I think the reason they don't do that is because it would show some kind of weakness, some kind of systemic, 'Oh, well then VR's not doing very well, if we have to educate people on the why.' So, as developers, we kind of get stuck with that bill and have to try to educate ourselves. But you have to be careful doing that, because then you look like an asshole, right? If you're saying, 'Well, it's because of this, this, and this,' people don't care. They don't want to hear that."

Getting nasty emails or reading harsh feedback on forums from the audience is all too common for developers nowadays. So as much as Cloudhead may not have enjoyed seeing people complain online, dealing with player toxicity online comes with the territory in 2017.

"What really helps me personally, and it helps most of us in the studio, is to recognize that this isn't just a VR problem," Unger notes. "This is a games industry problem in general. And, even in traditional PC gaming, you have people complaining about price versus content and time. And a lot of times they'll [not think about], well where's the quality in that equation? Was it a quality experience? Did you have a good experience? Sure, it was two or six hours long, but was it good? That seems to be missing from the conversation. But it's endemic in the entire video game industry.

"I don't take it personally. As with any other video game in the industry, yeah, we're pouring 16-hour days into production. Especially in VR, we're taking substantial risks and there's a lot of innovation and invention that happens alongside standard video game production. So it increases the workload for your small team substantially. So it's hard not to take it personally when somebody attacks the game for being too short, or whatever the thing is. It does help to re-frame it in your head as, this is just the industry that we've somehow created together over the last 20 years. It's what people of privilege tend to do."

"It's incredibly risky to get into VR and you have to do it from kind of a place of purity, honestly. You have to really believe that you're bringing something new to the table"

Cloudhead has been one of the leaders in VR since the beginning. It's narrative adventure, The Gallery: Call of the Starseed, was a hit and the Vancouver-based studio has committed to making at least three episodes in the franchise. Episode 2, Heart of the Emberstone, recently released to rave reviews.

"The Gallery: Call of the Starseed was one of the top five selling games in VR of all time. Because it was so successful initially, even though it was a small market, all of the funding from that went directly into Episode 2. And we went from a 12-ish team to an 18-person team and dumped all of the money into upping production value across the board," Unger says.

Interestingly, although Episode 2 offers several more hours of gameplay and has more to explore, it actually cost Cloudhead a bit less to make. "We actually started Episode 1 in early 2013. We were using prototype Oculus Rift hardware at the time," Unger explains. "That was before motion controls and stuff too, so even though we were doing R&D... that was like a three-year span of development. So we actually put more money into Episode 1 than Episode 2, because Episode 2 was a year and a half of production. That was kind of the beauty of Episode 2 - we got into just refining systems, because we'd already done all that hard work. We knew what we were going to do. We could just kind of blow out the length and complexity of what we were doing."

Cloudhead had a clear vision and plan in place, but that doesn't make the VR space suddenly less risky for the team. Unger advises any developers interested in joining the VR industry to tread very carefully at this stage.

"It's incredibly risky to get into VR and you have to do it from kind of a place of purity, honestly," he comments. "You have to really believe that you're bringing something new to the table and you're pushing the conversation a bit further in terms of what the medium is and what it means. If you don't care about that stuff, you're probably getting into it for the wrong reasons. It is very costly. There is a lot of R&D involved. And you're doing things that have never been done before. Because of the very nature of that, things fall apart or don't work and you have to redo them. So if you're not in a studio that's highly experimental, or isn't willing to put in the extra time and funding to do those things properly, then [it's] probably not the industry for you right now."

While the risk in VR remains high at the moment - just ask CCP Games - Unger believes the big turning point is about a year away for the industry. Christmas 2018, in fact, is when the stars may align for the world of VR.

"I want to make Indiana Jones in VR. I want to make a completely pitch perfect version of Raiders of the Lost Ark"

"We constantly have our heads in numbers that are public and not public about where this market is going. We see an uptick in adoption happening sometime after Christmas 2018. So our internal goal is actually to get there. And we've been told this by many industry insiders as well - they want Cloudhead to be there - and if we get there, we're going to be sitting in a really, really good position," Unger says.

Investors and others staying out of VR simply because AR is on the horizon could be making a mistake, too, he says. Even with Apple getting involved, the AR market will take a long time to become established, while VR meanwhile continues to gain a better footing.

"AR is still a good five years out. I say that because we've seen some stuff being worked on and they have a lot of hard challenges," Unger explains. "Everyone's touting how amazing AR is going to be, and it will be, but it's not going to be there for a long time. You'll start seeing stuff coming out that is developer or enthusiast friendly, but it's not the kind of thing that consumers are going to want to put on their face. It's going to have the same trough and dips and ups and downs as VR will. It's going to take longer. The thing about VR is we've already established this design language for what constitutes kind of a stable, good experience in VR. Developers, at this point, can jump in and do some pretty astounding stuff. On the same token, I see a lot of wave shooters and just garbage flooding the market, because that same group of people isn't willing to take the risk or the investment risk into doing brave and different new things and figuring out what it does best."

An industry that could give VR a leg up is Hollywood. There's already been interest from famous directors like James Cameron and Jon Favreau, and the truth is that Hollywood very much needs video game talent in order to make VR work. Some cross-pollination of talent is inevitable, and that's something Unger embraces. He recently attended an event called VR On The Lot, where he spoke to numerous people in film about why 360 video isn't the best use for VR.

"I gave the example of, what I really want to do is be in an environment with my family. I want to see them in some way," he says. "I want to be on the wall with Legolas and he's shooting orcs with arrows on the top of the wall. I want to watch that narrative kind of play out. And it's not going to stop no matter what I do with my wife. But if my kids get bored, they can get up and grab some bows and start nailing orcs as well, right?

"There's a way to build a story that's very movie-like that has a progression that you can be a part of but you've got a limited interactive influence over it. And you can choose to be as much a part of it as you want to be. So driving towards that I think is really important. And, personally, I want to see ports of beloved movies brought to VR. I want to make Indiana Jones in VR. I want to make a completely pitch perfect version of Raiders of the Lost Ark. And I want users to experience that. I want them to be Indiana Jones. That's the kind of stuff I want to build towards."