Sony hopes for a PlayStation repeat with VR launch

In PlayStation VR, the virtual reality business might finally have its first mass market device.

Sony launches its virtual reality platform on Thursday for the PlayStation 4 video game console. The electronics giant will lean on its legion of PlayStation fans and a competitive price — $399.99 — to try to establish itself as the dominant high-end VR experience, bumping rivals including Facebook-owned Oculus Rift and HTC's Vive.

"I think it's the full package," said Shawn Layden, chairman of Sony Interactive Entertainment Worldwide Studios, during an interview.

Sony makes its debut in virtual reality with lots of optimism in a market expected to surge in popularity in the next few years. IHS Technology says 4 million VR headsets were in use in 2015, with that number jumping to 81 million by 2020.

Meanwhile, spending on virtual reality entertainment will reach $3.3 billion in four years. "There is certainly more to be done in terms of premium content for VR platforms and it will take time to deliver on the potential of the technology," says IHS analyst Piers Harding-Rolls.

Price is one area where PlayStation VR will have an advantage. Although it's more expensive than smartphone-based headsets including Samsung's Gear VR and Google Daydream, announced by the tech giant earlier this month, the $399.99 price is much lower than Oculus Rift ($599) and HTC Vive ($799).

The headset requires a PlayStation 4, which costs an additional $300, but it's far from the price of high-end personal computers needed for Rift and Vive that can run several hundred dollars more.

The PlayStation brand is among the most recognizable in video games and a core part of Sony's business. Executives hope the new VR product can piggyback on the strong demand for the PS4 video game console, which is forecast to sell 53 million by the end of the year, according to IHS, paving the way for players to easily leap into VR.

"PSVR's best selling point is that it is good and inexpensive relative to the others," says Wedbush analyst Michael Pachter, who estimates Sony could ship as many as 3 million headsets by the end of the year. "At least 50 million people can buy PSVR without any other equipment, making it far more affordable."

Sony has recruited several notable video game publishers to create games for PlayStation VR, including a Star Wars experience from Electronic Arts and the Warner Bros. Interactive title Batman Arkham VR. Layden says 50 games will be available for VR by the end of the year.

The company also made a push to get the headset in front of customers, one of the challenges in attempting to evangelize about the potential of VR. Over the summer, Sony launched a program at retailers including Best Buy and GameStop to strap its VR headsets on as many consumers as possible. Layden says roughly a quarter million people tried out PlayStation VR during the program.

"We're very happy with the response we've had from that," says Layden. "Now we're ready to go to market."

That could help PlayStation VR get off to a fast start. IHS projects the headset will outsell Oculus Rift and HTC Vive combined this year. While "brand loyalists" will gravitate to PS VR, says Gartner analyst Brian Blau, it could take "a year or two before the largest portion of the (PS4) install base" snags a headset.

It will also take time before PlayStation VR finds that must-own game. Several titles come close to that status, including rhythm games Rez Infinite and Thumper, as well as outer space adventure Eve: Valkyrie, also available on Oculus Rift.

Then there's the possibility of Sony broadening the PS4's reach, as more consumers become interested in VR. That could take time, as the library of the games grows and potentially captures buzz.

Another concern: its attractive price on the high-end of VR is still expensive, especially for consumers without a PS4. "This is mass market ... but not so mass market at $400," says Pachter. "The price will have to be closer to $200 to really attract middle income households. At $400, it's still a luxury for most."

Follow Brett Molina on Twitter: @brettmolina23.


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