Virtual Reality On Kickstarter: The Struggles of Keeping Up With Rapid Growth

Virtual Reality – Fast Growth And Bright Future Forecasts

Virtual reality is a rapidly evolving market, providing unlimited opportunities, and attracting lots of newcomers.  With 1.2 billion gamers worldwide, its impact on the gaming industry in the near future is going to excel beyond all other applications.

Twenty years ago, virtual reality failed to meet investors’ expectations.  However, with the development of the internet and mobile apps, as well as the introduction of inexpensive headsets which employ a user’s own smartphone, and creation of 3D content, it is now one of the hottest markets. Each year, hundreds of millions of dollars are poured into the virtual reality marketplace by venture capitalists and global corporations which include: Facebook, Sony, Microsoft, Google, and Samsung, to name a few.

In addition to receiving attention from larger investors, it is being embraced by average consumers as well. Sales of virtual reality headsets are expected to reach $1.1 billion in 2016, and a lot of startups are looking to jump on the bandwagon. Crowdfunding is one of the best vehicles that  allows for entrepreneurs to test the market, and fund their product development.

Virtual Reality Projects On Kickstarter                                   

Kickstarter, being the household name for crowdfunding, has attrackted a significant number of virtual reality projects. Oculus Rift’s triumph in 2012, suddenly brought to light a tremendous opportunity for those who have grown up watching SciFi movies, and dreaming of bringing the ‘Minority Report’ into reality . As a result, virtual reality projects on Kickstarter are now on the rise. Seemingly invisible only four years ago, more than 200 of these projects have been posted since then. Of the 69 projects which succeeded in reaching their funding goal, 30 were launched this year.

While none of the recent projects have been able to repeat the Oculus Rift result, the amount of money raised by successful projects has been growing every year. Only one project raised over $100,000 in 2012; this number increased to five campaigns in 2013 and 2014 respectively, and has jumped to twelve projects this year! Over last four years, projects involving virtual reality have raised almost $12 million.

On the other hand, delivery rates (especially for top funded campaigns) have been low. Out of eleven projects which raised more than $100,000 in 2012-2014, only two shipped their rewards (both with significant delays). The second product, AntVR kit, received extremely negative feedback from backers, who claimed the product has never worked. STEAM, which was scheduled to ship in July of 2014, still has not been able to do so. The company is now promising to deliver in April of 2016, but the majority of the campaign’s backers are now justifiably skeptical. vrAse was investigated by the Scottish police for fraud after its campaign in 2013, and has not been able to deliver the product. Immersis promised to ship in May of 2015, but the company’s founders recently announced that they need to raise more money in order to manufacture the product. iMotion had to refund money to the campaign backers. Cmoar has moved their delivery time from June of 2015 to a tentative date at the end of March of 2016. Control VR has never delivered the product and has stopped responding to messages from backers. Cyberith Virtualizer, who was scheduled to ship the product in March of 2015, still updates their Kickstarter page, however no delivery date has been announced. Glyph raised more than $1.5 million in February of 2014, and was supposed to ship in April of the same year. Unfortunately, there is still no information available regarding the rewards fulfillment date as of yet. castAR which raised more than a million dollars from almost 4,000 people in 2013, have yet to ship the product, and backers don’t expect to see it anytime in the near future.

Conclusion

The virtual reality industry will continue to grow and expand into different areas of our lives. While the growth will be fueled by giant corporations, young and hungry startups will continue to introduce new products and concepts. Crowdfunding will remain the most realistic, and accessible tool for those looking for publicity and funding. We expect to see many more virtual reality hardware projects with high funding goals.

However, unless entrepreneurs begin to deliver quality gadgets within a reasonable amount of time, they will not be able to  compete with the products presented by Samsung, Sony, or Microsoft. We predict that the majority of these projects will fail, considering the current rate of technological innovations and growing fatigue among crowdfunding community. Kickstarter backers will not be satisfied by gizmos that are outdated, and are delayed by delivery times. Since 2014, the technology category’s success rate on Kickstarter has dropped from 32.6% to 20.2%, meaning that potential crowdfunders will have to spend more time, money, and effort in order to stand out from the crowd, and will also need to present exciting products with reasonable prices, and reliable shipping schedules.