Virtual reality wants to rule video games. Here’s who will rule VR

Originally published May 22, 2015

By Ian Sherr and Roger Cheng

Some of the greatest rivalries have come out of the video game industry: Midway’s Space Invaders against Atari’s Asteroids. Nintendo’s Mario versus Sega’s Sonic the Hedgehog. Microsoft’s Halo against Sony’s God of War.

Now the next great battle for leadership of the video game industry is starting. And it’s between companies most people have never heard of over a technology few have even tried: virtual reality.

In the past year, nearly every major tech company has announced or hinted at plans to take real steps into the emerging market for VR, which immerses goggle-wearing users in three-dimensional worlds — and often feature gee-whiz graphics tied to the hottest games. Facebook surprised the industry with its $2 billion buyout of VR headset maker Oculus in March 2014. Google unveiled its “Cardboard” VR headset for smartphones. Apple filed and was awarded a patent for VR technology.

But the competition is likely to be fiercest between two camps: Facebook’s Oculus and video game developer Valve, which has teamed up with smartphone maker HTC. The companies are poised to be among the most influential in the market, and they’ve both set their sights on the same potential customers: gamers who plan to use VR on a computer.

The stakes are high. Whichever company establishes itself as the go-to VR device maker could take control of a potential $7 billion market, attracting not only those customers but also software developers needed to create the compelling apps that draw in even more users.

Or they could establish separate fiefdoms, each with its own loyal following of customers and software developers.

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