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How to Solve VR's Customer Relationship Problems

by Neil Schneider on 10/24/16 10:12:00 am   Expert Blogs   Featured Blogs

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I think the virtual reality industry has fallen in love with itself, and we need to see other people, or we are all going to have a really bad breakup.  It's not you, it's me.  Well, it's actually you.  Mostly.

There is too big a divide between the regular email alerts I get about how virtual reality will be valued at X billion dollars in X years versus the actual consumer awareness needed to make this happen - and our own industry is to blame.  We speak of customers, we want customers, yet we are all investing the most minimal amount of work and resources to actually get customers - and the results are clear.  This article discusses this issue and efforts being done to resolve this.

Number of VR Conferences (Source: Jon Peddie Research)

First, there is a huge trend that has built up over the last two years.  It's not the sale of VR devices, it's not the enhancement of technology, and it's not even an upshot in Kickstarter launches (is that still a thing?).  It's events.  So many VR events all talking about virtual reality and how it will cure everything that ails you.  Yes, our industry needs more expertise and participation from all over the world and I'm 100% supportive of events that build beyond what we already have.  However, I can't help but get the impression that many of the new conferences are focused on selling the energies of virtual reality for as much money as sponsors and delegates can pay in over-saturated markets like Silicon Valley, Los Angeles, Hollywood, Seattle, and to a growing extent, London and Paris.  Events should have a strategic importance for the industry and at least try to be unique from one another.

It's concerning because this heavy investment in the sheer quantity of professional events in such close physical proximity from one another has failed to contribute to the consumer awareness that is so dearly needed for the industry to thrive.  It's not just conferences: Meetups and Maker Faires are also outside the scope of a traditional consumer, and there are telltail signs that our industry needs to do much more to appeal to the right audiences for market growth.

Take for example the biggest media bombshell for VR which happened towards the end of September when Oculus Founder Palmer Luckey's political views were brought into question.  Or was it a bombshell at all?  As a business person, my first questions were:

  1. Who was reacting to the news?
  2. Who wrote about it?
  3. What if anything did it impact?
  4. And is any PR, really good PR?

While the technology press, a subset of gamers, and a handful of game developers had an impassioned opinion one way or the other, this distraction wasn't even a blip on news outlets like national television, radio, or newspaper.  The PR was ineffective in either direction which is fortunate / unfortunate depending on how you look at it.

Reddit has grown a large VR community over the past couple years.  Being central to this Trumped up escapade and regularly cited in the technology press, I expected a huge jump in the media-featured Reddit VR groups.  Nothing.  The most popular VR subreddit grew just 6,700 subscribers in six months.  This 9.5% growth is likely filled with account recreations, purposeful voting power duplicates and numerous trolls.  I'm confident that nearly all the online VR communities have seen near zero growth in six months beyond what would naturally occur with product sales (e.g. joining a community as part of activating a product).

Oculus Connect 3 (Source: TechCrunch)

So now we get to Oculus Connect 3; the flagship conference for Facebook's Oculus.  Oculus is achieving amazing things to broaden their potential PC base, they are investing heavily in new content, and they've got some technology ideas to push forward.  Oculus Connect 3 news appeared just about everywhere in the technology press, yet they had very little coverage in media outlets like national television, radio, or newspaper.  There was one online CNN link, and that barely scratches the surface when it comes to getting VR in front of the millions of potential consumers the industry is promising itself.  Steam Dev Days had even less exposure in mass market media.

I really think that the most meaningful customer base is represented through outlets like  Sci-Fi Channel, MTV, CNN, and eSports events - and we aren't even trying; at least not significantly.  If indeed our industry is limited to the developer and enthusiast crowds which is why they are the ones getting marketed to, then we are not destined to be a multibillion dollar business outside of the investment windfall.  The multibillion dollar vision is only possible if we work for it.

This consumer awareness limitation has nothing to do with the cost of VR or the potential of VR or investment in VR or VR guidelines or standards or even whether or not the technology works well.  The problem is our industry has failed to invest the energy to understand and reach out to its actual customer base.  The results are clear: outside the VR bubble (because that's what we are living in), nobody knows about VR.  I'll say it again.  Outside the VR bubble, NOBODY KNOWS ABOUT VR.

It's our job to build that awareness by giving future customers the opportunity to try the technology on their own so they can be as excited as we are (we as in people that are not the consumers), and yes - the sales will come.  However, we have to quickly work for it and hard.

Source: HBO Canada

The strongest efforts reported so far are brief flash in the pan exhibits at Comic-Con (e.g. the Westworld VR experience), and there are also "pop up" exhibits like the ones put on by Tiff here in Toronto.  The rest are Meet-up gatherings or local low-cost events which tend to be the same crowd.  These efforts are not appealing enough to mass market customers which is why our industry is facing unnecessarily sluggish growth.

Best Buy isn't the solution either.  A brightened retail shelf and running store demos are a drop in the bucket for what's needed.  When people make the trip to a store to try before they buy, that's the last step - not the first!  They need to have a big interest before they walk in the door, and there are very few efforts being done to create that.  Retail is not a marketing engine, it's a point of sale when the other channels have done their job, and we have yet to build the other channels!

Fortunately, there are big efforts in play to address this, and I'm hoping the industry mindset will grow increasingly supportive of them.

L-R: Martin Timusk, Kevin Von Appen, Neil Schneider at Immersed 2016

The first effort are dedicated consumer-facing events.  This month, the Immersive Technology Alliance ran its third edition of the Immersed conference at the Ontario Science Centre.  Immersed was founded in 2014 to grow the immersive technology market on the East Coast and has been going strong ever since for professionals and industry.

Immersed 2016 Public Exhibition / Education Series

Recognizing the consumer awareness problem, The Immersive Technology Alliance partnered with the Ontario Science Centre to build a giant public exhibition and education series to showcase all kinds of immersive technology as part of the museum experience for its visitors and media.  We primarily targeted parents, teachers, students, teenagers, adults - people that we want exposed to VR and immersive technology so they will take on a direct interest.  The Sunday featured 4,500 attendees, and the Monday and Tuesday had busloads of teachers and students trying VR for the first time.  The response to the technology and the effort was positively staggering.  Kevin Von Appen, Director of Science Communication for the Ontario Science Centre, told our professional audience that this exhibition was one of the best and most successful ever done in the history of the museum (and they have been around since the 60's).  Everybody loved it - especially the general public.

Kudos to AMD, ImmersiON-VRelia, and Immervision for helping support this initaitive as well as HTC and Intel for sending additional hardware so that we could maximize the experiences for all involved.  We are grateful to everyone who helped move mountains for this.

L-R: Space Channel Panel featuring PETA, ImmersiON-VRelia, The ITA, SideFX, Award Winning Tiltbrush Artist, AMD, InnerSpace Moderator on professional side of event.

Even Space Channel and other top national and international media came down to check everything out.  Through mass market media, oodles of potential customers were reached from this one event - probably for the first time.

Immersion Arcade

Another useful consumer marketing opportunity are virtual reality arcades.  Software developers and technology makers need to embrace this because arcades represent places where the curious are indeed trying the technology and paying money to do so.  Sadly, this isn't being pursued the way it should.  I was horrified to learn that one such arcade has to pay for their own games on Steam (in addition to getting the arcade use license rights).  That's crazy.  Developers should instead be giving all VR arcades software keys and billing for a revenue share - maybe even giving up on the revenue share altogether.  Every arcade visit is a potential sales opportunity for a VR system and a wide selection of games.  The arcades are doing content makers the favor, not the other way around.

In summary, our industry needs to achieve two things.  First, we need to reduce the over-spending and duplication in well served markets because we are just talking to ourselves over and over and over again at great cost and with limited benefit.  California is taken care of.  Seattle is taken care of.  London is taken care of.  Vancouver is taken care of.  Toronto is taken care of.  Enough!

Fast Motion Studios Showing Collaborative VR (6 people) at Immersed 2016

Next, we need to reach out to customers in a big way.  As successful as Immersed was for professional and consumer alike, I'm troubled by how many companies told me they had little to no interest in reaching customers.  Some didn't even respond.  It's as though customers were a foreign concept to them.  Without demonstrated customer interest, there are no investors, without investors, there are no businesses, without businesses, there is no industry.  It's as simple as that.

Star Destroyer (Source: Lucasfilm, Star Wars Wiki)

It's as though the market leaders are the Star Destroyers lying in wait in the Return of the Jedi climactic space battle when Lando Calrissian ponders "Only the fighters are attacking, I wonder what those Star Destroyers are waiting for?".  It didn't end so well for those over-confident Star Destroyers (Commander: "We just have to keep them from leaving").  The VR industry is running the exact same risk and we need to directly engage customers to break out of the R&D and enterprise markets.

Immersed 2016 at the Ontario Science Centre

I will finish by highlighting the silver lining to all of this.  Yes, preliminary sales have room for growth, there has been the occasional VR controversy, and most developers are still looking forward to a return on investment in virtual reality.  However, and this is the most important part - it's all good.  Why?  The customers have yet to be contacted.  Now we are faced with the opportunity to start knocking on those doors in a big way!  So let's get started.

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