You will be redirected back to your article in seconds

Winter Is Coming: Virtual Reality Investors See Consolidation Ahead in 2017

2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday.

A coming cash crunch for VR isn’t completely unexpected, said GV / Google Ventures General Partner Joe Kraus, who argued that it took three years for the iPhone to become a popular and profitable platform for developers. With VR, it could take even longer. “Going through this valley of despair is important, and is a necessary thing,” he said.

His remarks were echoed by Comcast Ventures Managing Director Michael Yang. “There is massive consolidation that is going to occur,” Yang argued. Startups that don’t want to be swept up in this wave of consolidation should spend their money wisely, and be prepared to survive until virtual reality has become a mass market.

This includes keeping company teams small. “If you are 20 people now, you are still going to be 20 people until 2020,” Yang said. And The Venture Reality Fund Co-founder & General Partner Tipatat Chennavasin warned against raising too much money at this point: “You end up hanging this noose around your neck.”

Investors on stage at the event agreed that early estimates on headset shipments may have been overhyped, but they were more concerned about the repeat usage they see among early adopters, including themselves. “I wouldn’t put my headset on every day,” if it wasn’t for the reason that he had to for his work, said Kraus.

Presence Capital Founding Partner Amitt Mahajan agreed: “There is not that daily use VR app yet.” And Signia Ventures Partner Sunny Dhillon admitted that his PlayStation VR headset is in danger of collecting dust. “I’m not using it as much as I hoped I would,” he said.

Despite all those cautionary tones, all of the investors on stage at the conference agreed that there is a lot of potential for VR. Chennavasin said that he has seen a handful of startups generate a million dollar or more with VR titles, and also cited VR arcades as a good way to generate real revenue in the near term.

Kraus summed up the sentiment among investors: “Faith remains that VR is a thing.”

More Digital

  • Snapchat logos

    Snap Lays Off Recruiters as It Prepares for Slower Hiring (Report)

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

  • Lockhart_Steele

    Vox Media Editorial Director Lockhart Steele Fired for Sexual Harassment

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

  • Chelsea Handler Netflix trailer

    'Chelsea' Proves Netflix Can't Always Beat TV at Its Own Game (Opinion)

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

  • Twitter outage

    Twitter to Ban Groups Promoting Violence, Hate Symbols

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

  • Echo Fox - Yankees - esports

    New York Yankees Invest in eSports Holding Firm Backed by Ex-NBA Star Rick Fox

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

  • Thomas and Friends- Big World! Big

    International Newswire: Mipcom Sees First Signs of Peak TV Animation

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

  • The Walking Dead 360 Experience: Negan

    'Walking Dead' Claws Deeper Into VR in AMC's New Virtual-Reality App

    2017 will be a year of consolidation for virtual reality, and startups are wise to dig in and make their money last as long as possible: That was one of the key points of advice from some of the industry’s premier investors at the Virtual Reality Intelligence conference in San Francisco Wednesday. A coming cash crunch […]

More From Our Brands

Access exclusive content