VR adoption is accelerating thanks to the Oculus Quest. We’ve seen over 100 VR titles break $1 million in revenue, growing the total VR software market by 3x in 2019. Top grossing VR titles have cleared $10 million in revenue, and can reach up to $60 million in sales given the current distribution of headsets in the market so far. Though still small, VR is a growing and sustainable platform for developers.
Tipatat is a General Partner of the Venture Reality Fund investing in early stage VR, AR, and AI companies. He has looked at over 5,000 companies in the space and has invested in 35, including the makers of hit VR games like Beat Saber, Rec Room, and Job Simulator.
It’s difficult to get real data on the VR consumer market. People tend to focus on headsets sales, which remains largely speculative as only Sony ever publicly discloses numbers. Even so, a far more important data point we do have is software sales—this is a key metric for differentiating between a platform and a product. Because even if Oculus sold 100 million VR headsets, but no third-party developer could make $1 million in revenue, then it wouldn’t be a platform; it would be a successful product for Oculus, but it wouldn’t be a viable platform to create an ecosystem of successful developers.
Oculus proved that VR was more than a product when they officially released numbers about their ecosystem last September at Oculus Connect 6. During the convention, they announced that VR software sales on their platform had exceeded $100 million; $20 million of that just from the Oculus Quest ecosystem, which launched only four months prior. But that’s not the only signal we have that VR is a growing and sustainable platform.
Tracking VR Software Sales
We see a strong correlation between the number of reviews of a given app and the number of sales it has. Because all the VR app stores allow us to see the number of reviews, we’re able to track the ‘health’ of the ecosystem by looking at the number of reviews over time.
This analysis covers reviews-over-time for all major VR app stores: Oculus Rift, Oculus Quest, Steam, and PSN. It’s also thanks to sales data generously shared with the author from various VR game studios that we’re able to create a reliable analysis of where VR is now, and how far it’s come.
From our estimates, there is relatively small software sales for the first couple of years, and then a major inflection point in 2019. That spike represents an almost 10x jump in software sales from the previous year! We believe this is thanks to the introduction of new hardware—Oculus Quest and Oculus Rift S—as well as the launch of several exclusive hit games like Asgard’s Wrath and the continued success of Beat Saber. Four months after launch, Quest accounted for 20% of Oculus software sales; seven months after launch, Quest is now nearly 40%.
All Major VR Storefronts
Based on our estimates, we see 2019 as a major inflection point for the entire market, almost tripling yearly revenue to nearly $300 million across all platforms. This is mostly driven by the success of Oculus but also a significant uplift in the PSVR marketplace mainly driven by the success of Beat Saber and other new hit VR games.
What makes Oculus interesting is how much it has grown the market in the past year, if you look purely at software revenue. Sony announced sales of PlayStation VR in January 2020: 5 million headsets over the last four years. Our estimates suggest nearly $110 million in software revenue recorded in 2019. Oculus hasn’t announced how many Quests are out there, but given that it’s probably a much smaller install base, it’s impressive to see it drive nearly $60 million in software revenue for 2019.
What it Means for Developers
For a nascent platform, it’s an important milestone when a software title can earn $1 million in revenue. Here, we chart over time how many titles hit that $1 million mark across each platform. Platforms that have multiple titles breaking $1 million can be called ‘healthy’ because it implies that success is repeatable and there’s room for more developers.
Based on the data we’ve collected, by the end of 2017 we estimate that almost 40 titles made over $1 million in revenue. And in 2017, a top VR title grossed $10 million. By the end of 2018, that grew to 60 titles at the $1 million milestone, and top titles grossed over $20 million. Now at the end of 2019, we’re at more than 100 titles exceeding $1 million in revenue, and at least one top title grossing over $40 million in annual revenue.
The majority of these titles were not made by large AAA studios, but by small indie studios. To our knowledge, several of these studios received no independent financing from either investors or platforms; they were entirely self-published and self-made successes. Beat Games, makers of Beat Saber, earned over $20 million in their first year and became the first VR game to sell over 1 million copies. Compare this to Angry Birds, the mobile game most people see as the first major success to validate the mobile gaming market, which made $7.15 million in its first year.
We believe the success of indies in VR is a sign of a genuine platform. It also means established leaders from previous platforms like mobile or PC gaming don’t have an unfair advantage as incumbents; the perception of VR as ‘anyone’s game’ draws more developers into the ecosystem, which has the potential to generate more revenue as Oculus and others continue to push distribution of VR headsets to consumers. It also helps that indie titles have smaller initial development budgets and don’t need to spend much (if any) on marketing; this helps them achieve profit more quickly when they start getting popular on the strength of organic discovery or platform-led marketing offered by Oculus, PlayStation, and others.
Which Games Are Succeeding and Why
Now let’s look at what games are selling. Based on the data we’ve collected, these are the top 20 grossing VR games across all the platforms, all at over $4 million in revenue, with the top seven clearing $10 million:
Look at a common factor in the winners: natively-built VR titles clearly lead PC ports and IP-driven launches even when they’re as well known as Fallout or Skyrim. Of course there are plenty of shooters and a couple ports, but like on new platforms, the games that are built native for the platform succeed the most. Games are about interactivity, dictated by input and for VR, that input is the 1:1 motion controls that allow for complex gesture based interaction. The first platinum-selling VR games Beat Saber and Job Simulator are perfect examples of this. Even the top performing shooters in VR embrace VR-specific gameplay like rich object interaction in Robo Recall or Boneworks.
The top seven grossing games are cross-platform, which shows how important it is for developers to think about a cross-platform approach to maximise their potential audience, but none of the games did simultaneous launches across all the platforms. In the top 20, there are quite a few exclusives which suggests that each platform has a big enough consumer base to support hit games and, much like on console, exclusive games are important for the ecosystem.
Encouragingly there is a good spread of games from each year, showing that VR games can be evergreen, but also that new games being released are finding success This shows a healthy ecosystem and that new franchises and IPs are being established and can compete with established brands and IP in this new market.
Interestingly, the top games are being developed all over the world. Beat Saber from the Czech Republic, Arizona Sunshine from the UK, Job Simulator from Austin, Texas, Super Hot from Poland, Moss from Seattle, Washington. It’s great to see that success can come from anywhere and anyone.
– – — – –
When looking for a new platform, it’s important to note when the first third-party developer makes $1 million. Three and a half years into consumer VR, there are other 100 titles that have made over $1 million, and amazingly, a top VR title can gross over $60 million in two years with no signs of slowing down. And this is with an estimated install base of 10 million units that is now growing at an accelerated pace. It’s exciting to see the beginnings of a new platform and seeing indies and startups succeed anew. At this pace, we should easily see the first VR title reach the $100 million milestone by this time next year and that will show when VR graduates from an emerging platform to one that everyone should pay attention too.
Update (February 24th, 2020): Updated the ‘Cumulative VR Software Grossing Over $1M’ chart with a new axis which more accurately represents the data timeline.
The post 2019 Was a Major Inflection Point for VR—Here’s the Proof appeared first on Road to VR.
Monero, Polkadot, Decred Price Analysis: 25 October
Bitcoin’s dominance was recorded to be 61.75, at press time, with the index noting a figure of over 60 for a week now. In fact, Bitcoin was also noting some gains on the charts, having risen above the $13,000-level. Monero shared this bullish sentiment and was also noting gains, while Polkadot exhibited a bearish divergence. Decred, while quite volatile over the past few days, was nevertheless trending upwards.
Using the Fibonacci Retracement tool for XMR’s move from $93.54 to $136.39, some important levels were highlighted.
The cryptocurrency’s price sailed past the 23.6% retracement level at $126.28. As the OBV showed, the crypto-asset has been seeing increasing buyer interest (white). Recently, as the price retraced, the OBV trended downwards (purple), before breaking past the trendline once more.
This breakout indicated that the crypto-asset could follow and post more gains in the coming days, with the region around $140 as the target over the next few days.
In other news, Monero’s former lead maintainer, Ricardo “Fluffypony” Spagni, was recently reported to have stated that “cryptographers are always gonna stay one step ahead on privacy.”
DOT was forming a symmetrical triangle (cyan), a continuation pattern that can break out to either side. In this instance, the price appeared to break out to the upside, but it stopped short at $4.4.
Any further gains for the crypto-asset would have to be shelved over the next few hours as it noted a bearish divergence between the price and momentum (white).
DOT formed higher highs as the momentum indicator (RSI) formed lower highs. This could force DOT down towards $4.2 or even lower on the charts.
In other news, Ontology and Polkadot recently announced a collaboration to accelerate DeID adoption.
The cryptocurrency’s technical indicators highlighted how the crypto-asset behaved with heightened volatility. Despite the rapid surges and drops in value, the crypto-asset was trending upwards as it posted higher lows on the charts.
In fact, the Stochastic RSI was in the oversold region, indicating that a spike in price was on the cards. There was also the possibility that DCR might test the support at $12.21, before moving upwards once more.
Germany Enters Deflation
Europe’s biggest economy is now in a full swing monetary deflation for the first time in our era. More than 200 banks have now introduced penalty interest rates on retail…
Europe’s biggest economy is now in a full swing monetary deflation for the first time in our era.
More than 200 banks have now introduced penalty interest rates on retail deposits, some from the first euro, to cover costs incurred by ECB’s negative interest rate for bank deposits. Even mobile Bank N26 has introduced penalty interest rates from €50,000 according to local media.
A comparison website says “144 banks have published negative interest rates for private customers on their website or in their online price list.
13 banks charge fees for the overnight money account, which is usually free. This creates an actual negative interest rate.
According to media reports, some banks and savings banks charge negative interest rates, but do not publish them online.”
Almost all German banks, including the biggest Deutsche Bank, now charge -0.5% for deposits of €100,000 or more. That means such depositors have to pay the bank €500 euros a year for holding and using their money.
Numerous banks have also introduced yearly charges for current accounts, which effectively amounts to negative interest rates if regular deposits are being made.
What’s more, Germany itself has entered deflation, with the inflation rate now standing at -0.2%.
The massive money printing by the European Central Bank (ECB), which now owns some 66% of the Eurozone GDP, seems to have had little effect in Germany.
The reason is perhaps because of something peculiar, with it a bit unclear what exactly has gone on in the German banking sector.
This sharp drop of about $1 trillion in private sector lending coincides somewhat with the introduction of the euro, the official German re-unification, as well as a bit later the dot com crash.
It’s never recovered and the increase has been slow proportionally speaking, with Germans continuing to choose savings over borrowing:
German saving rates have fallen this past half century, save for the recent spike during the current unusual circumstances.
However, last year’s negative interest rates cost German savers €27 billion in real terms after adjusting for inflation, according to a calculation by DZ Bank.
Some half a trillion can be saved by Germans per quarter from their disposable income, with many choosing to not invest in stocks as they perceive them to be risky.
Effective Monetary Contraction and Regressive Taxation
The monetary tightening by the banks as can be seen in the above picture, combined with high saving rates, is one explanation for this monetary deflation we are seeing in the country.
Another potential explanation is the incentives are just wrong where ordinary Germans are concerned.
Capital gain taxes are 25%, with those that make more in capital gains usually not paying a higher tax rate.
This is a general Western problem with income taxes for example stopping at the somewhat middle class income of circa $40,000, above which a flat tax rate of 45%-50% is applied.
The same applies to capital gains where someone who makes a billion in capital gains pays the same tax rate as someone who makes $10,000.
This in effect amounts to regressive taxation because those that have less proportionally pay more to the commons, and the less they have, the more they pay proportionally.
You add inflation, which is the most regressive tax of them all because it applies even to bread, and this capital gains or income tax becomes more regressive with each passing year.
That’s because the income of $40,000 say in the 90s is not the same income of $40,000 as of today. Back then you could buy two nice houses in very nice locations with that much. Now, you probably wouldn’t get a mortgage for a normal house.
Yet the rate of taxation on this $40,000 has not changed even though what $40,000 means has changed considerably.
We can see above wages in Germany have grown nicely, from €2,500 two decades ago, to €4,000.
In effect however wages have not grown at all. If we take a simple 2% a year inflation, without even adding its cumulative nature, over the past two decades we have had 40% inflation. Wages here have increased by about 40%. Meaning they have not increased in real term.
What has happened during these past two decades however is that taxes have increased on ordinary income and by a lot.
Let’s say for simplicity income taxes on those earning $2,500 a year are 20%. Those same people that were earning $2,500 a year, are now earning $4,000, but in this income bracket taxes are 40%.
That means taxes have increased by 20% without any change on real earnings. Something that no one would vote for, and thus something that has been done by stealth for the above is not obvious unless you actually look at the data.
Those that were in the 90s earning above €40,000 were already somewhat rich, and thus because of that they have not paid any further taxes unlike those below them.
As the masses are being taxed more, they have less disposable income compared to the 90s, and because of that banks are lending less to them.
The disposable income appears to have grown nicely as well, but if we account for that 40% inflation, it has not grown at all.
What has happened instead is a reshuffling of wealth, especially as far as how much the government takes and from whom is concerned.
In effect, over the past two decades taxes have been reduced on the upper-middle and upper classes, and have been increased by a significant amount on the middle class and those lower.
Gradually over the past two decades this systemic overtaxation of the masses and no taxation of the rich has led to a plutocratic system whereby a billionaire now openly rules America.
While where Germany is concerned, the title of the longest ruling elected head of state is less of an honor, and more an indication of sclerotic democracy in a nation where there is very little, if indeed any, political competition.
Hence we get a situation where despite much money printing there is still deflation, with the reason probably being because those who receive this new money are not being taxed, while those that don’t, are being taxed and at a higher rate.
Bitcoin SV Faces Rejection at $180, May Attempt to Reach the $183.89 High
Yesterday, buyers attempted to push BSV above the $180 overhead resistance. The upward move is facing resistance. If buyers turn down from the resistance zone, the sideways move will resume.
Today, the coin is retracing after being resisted to a low at $175 at the time of writing. On the upside, if price retraces and rebounds above $170, the $180 overhead resistance will be breached. Conversely, if the coin fails to rebound, the sideways move below the resistance will persist.
Bitcoin SV indicator reading
BSV price is above the SMAs which suggest the coin will rise. However, if the price breaks below the SMAs, the coin will resume selling pressure. BSV is above the 80% range of the daily stochastic. It indicates that the coin is in the overbought region and sellers may emerge to push prices down.
Key Resistance Zones: $320, $340, $360
Key Support Zones: $140, $120, $100
What is the next direction for BSV/USD?
Bitcoin SV is making a fresh uptrend to retest the resistance at $180. On October 22 uptrend; the coin was resisted at $172. The last retraced candle body tested the 61.8% Fibonacci retracement level. This indicates that BSV will eventually rise to 1.618 Fibonacci extensions or the high of $183.68.
Disclaimer. This analysis and forecast are the personal opinions of the author that are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds.
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