Many tipped virtual reality to be the big winner in 2017. The reality of it has unfortunately been someway off the mark. While the market has certainly grown, the speed at which it is growing is cause for concern for those who have invested in it.
And for some the poor sales reality has proved a bridge too far. Nokia is the first major name to axe its VR division, following poor sales figures. As a result, Nokia has announced plans to reduce up to 310 jobs from its Nokia Technologies unit and halt development of its virtual reality camera OZO and hardware.
The unit has about 1,090 employees and the potential cuts are expected to affect staff in the UK, Finland and the United States. Putting VR to one side (for the foreseeable future) the unit will continue to focus on digital health and patent and brand licensing business, Nokia said.
“The slower-than-expected development of the VR market means that Nokia Technologies plans to reduce investments and focus more on technology licensing opportunities,” it said in a statement.
Nokia launched the camera last year as the first device for its digital media business, one of its new hopes for future growth. It was designed for making 3D movies and games that can be watched and played with virtual reality headsets. Nokia cut the price of the camera by 25 per cent to $45,000 later last year.
Earlier this year, Wearable Technology Show COO John Weir gave his opinion on the reality of VR: “I would say that the average person in the street doesn’t see VR as a necessity in their daily lives – it’s still the stuff of science fiction. I think it’s still a nascent technology which is gaining traction in gaming but remains sluggish – this is going to be a long slog.”
Weir isn’t alone in his belief that VR is taking its time to gain traction. Kamal Hitari of online retailer Hitari holds a similar belief that “consumers are aware of VR as an entertainment and gaming device but its potential is massive and we are only scratching the surface with its uses.”
Likewise, Tanya Laird, founder and chief exec of Digital Jam, thinks that average consumers “have heard of VR however the reality of the penetration is somewhat smaller than the perception.“The reality is, for most people within the VR industry their bias is still very much out of proportion to the general population. Hands-on experience is still limited to early adopters and hardcore gamers/enthusiasts.”
Nokia is the first big name to pull the plug on its VR project. If others follow suit remains to be seen.