3 Hurdles NVIDIA Faces Before Benefiting from VR Systems
American tech firm NVIDIA is set to start to benefit from the rapidly growing virtual reality market, which is projected to be worth about $70 billion by 2020.
Although NVIDIA is in a better position than its rivals, what with its superior graphics processing power and the possibility for graphics processing units (GPUs) to power VR systems from the cloud, the company still faces some headwinds.
Hurdles NVIDIA Faces and How They Affect the Game Company
The competition from rival chipmaker Advanced Micro Devices is expected to hurt NVIDIA’s VR pursuits, but it’s not just that. Here are some other hurdles NVIDIA faces.
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Most PCs aren’t ready and don’t support VR
There are very few computers on the market at the moment that support virtual reality like the Oculus Rift does. Earlier this year, NVIDIA said less than 1 percent of computers sold are VR-ready, which shows just how long it may take the firm to start raking in revenue from the market.
NVIDIA added that PCs will need to be about seven times more powerful than they are at the moment to cater to the complex graphics associated with virtual reality.
Things may change for the better in the near future, going by recent events. This is because NVIDIA is working with about a hundred PC makers to bring VR-ready PCs to the market. Investors must, however, wait a while before sales for GPUs for VR start adding significantly to NVIDIA’s bottom line.
Things at the moment are too expensive
Another one of the hurdles NVIDIA faces is the price tag attached to VR-ready computers. Despite the fact that there are already a good number of PCs designed to be used with virtual reality, consumers aren’t really ready to dole out money for them.
The cheapest VR-ready PCs cost around $1,000, which is about $640 more than the average cost of a new regular computer. A recent CNET review of VR-ready PCs also discovered that “the sweet spot for price and performance is right around $2,000.”
As a result, NVIDIA won’t be able to benefit from sales of VR-ready computers until they become cheaper, which is likely to take some time.
NVIDIA has its own competition
Although NVIDIA is a leader in the GPU space, its rival AMD has racked up its virtual reality offerings over the past few months.
In March, AMD launched two certification programs: the Radeon VR Ready Premium and Radeon VR Ready Creator tiers for developers. These programs help them create VR standards to adhere so that their content will work well with AMD’s Radeon GPUs.
AMD is also winning in the gaming console market, its processors are found in both Microsoft’s Xbox One and Sony’s PlayStation 4 consoles. According to AMD, this gives it about 83 percent market share in home entertainment virtual reality systems.
As a result, AMD could make some big gains over NVIDIA in GPU sales when gaming consoles finally evolve to incorporate VR.
In a nutshell . . .
It is worthy to note that the first two hurdles NVIDIA faces apply to the entire VR industry and not just the computer game giant. This means the firm can’t do much to speed along the adoption of VR systems or make it cheaper. Although NVIDIA is getting ready to benefit from VR, it is not close to earning significantly from the tech.
Hence, it wouldn’t be wise to invest in NVIDIA on its VR outlook. The company is a leading GPU provider and they’re expected to profit from the growth of VR systems, but there’s ample time for AMD to make big progress too or for VR to lose steam for whatever reason.
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