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Why virtual reality is not moving beyond its niche in the entertainment market

Virtual Reality Entertainment

Introduction: Big promises, small reality

The euphoria was great: with the Vision Pro, Apple presented a "spatial medium" that would lead films, series and immersive short formats into a new era. Meta (formerly Oculus) cooperated with studios such as DreamWorks and promised the next evolutionary step for audiovisual storytelling.

But years later, virtual reality remains a niche phenomenon in the entertainment sector. Content is rare, user numbers are manageable and the cultural impact is low. Why is VR failing in an area where immersion seems to be a natural fit?

VR as a medium - a grand vision with limited implementation

Apple's media promise remained vague

Apple staged the Vision Pro not only as a work tool, but also as an experience platform for new media formats. The keynotes emphasized immersive 3D films, panoramic documentaries and volumetric content. But what is actually available remains limited.

Instead of an extensive catalog, there are a few experimental short films and stereoscopic clips. Even though Apple provides the infrastructure, there is a lack of scalable, regularly updated content that will retain a broad audience in the long term.

Meta's (Oculus) ambitious but unfinished content push

Meta, then still known as Oculus, originally had high ambitions to establish virtual reality as a new narrative medium. The company's own Oculus Story Studio produced elaborately designed short films such as HenryDear Angelica and Lost, which broke new ground both technically and narratively. The response in professional circles was positive - Henry even won an Emmy.

However, producing this content was expensive and the target group remained small. Meta shut down the studio in 2017 - officially to focus on promoting third-party providers. Unofficially, the reason was clear: in-house production of narrative VR experiences was too cost-intensive with too small a user base. Google also tried its hand at immersive storytelling with Google Spotlight Stories, but discontinued it in 2019 for similar reasons.

Over time, Meta increasingly focused on the gaming sector - understandable from a business perspective, as this is where the greatest sales potential lies. This can be clearly seen in today's Meta Quest Store: where there used to be categories for narrative or artistic content, games now dominate almost exclusively. This strategic narrowing has resulted in culturally or experimentally oriented content hardly being given any visibility or distribution opportunities.

Missed opportunities in distribution

Platform exclusivity prevents reach

VR content is usually tied to specific headsets or platforms. Cinematic VR content that runs on Meta Quest is not necessarily compatible with Apple Vision Pro or SteamVR. This fragmentation prevents real reach.

There is a lack of an open, cross-platform distribution structure comparable to Netflix or YouTube. As long as VR content is tied to closed ecosystems, access for users and producers will remain restricted.

A high-quality VR film requires stereoscopic or volumetric recording, 3D post-production and often real-time rendering. These processes are expensive and technically demanding. At the same time, the return on investment is low - the audience is small and there are no monetization opportunities.

Elaborate production - little return

As a result, studios continue to rely on conventional formats, even if they recognize the potential of VR. The production costs are simply not worth it in the current market situation.

vr movies with 360° camera

Technical hurdles: Ergonomics and suitability for everyday use

Inconvenient use for longer content

Even modern headsets such as the Meta Quest 3 or the Apple Vision Pro are not designed to be worn for hours on end. Movies with a running time of 90 minutes or more quickly become a physical strain. Pressure points, heat build-up or fatigue are not uncommon - and interrupt the immersion.

This is in contrast to passive media consumption via televisions or projectors, which is convenient and barrier-free. The threshold for using VR is simply higher.

Social isolation - a misunderstanding?

VR is not anti-social per se

Virtual reality is often perceived as isolating. However, the opposite is particularly true in multiplayer gaming: cooperative games, voice chat, shared worlds. VR is highly social here - comparable to other online platforms.

Social experiences are therefore possible in VR, but depend on the context of use.

Shared movie consumption remains a challenge

The situation is different when it comes to consuming linear media such as films. Platforms such as Bigscreen allow people to watch films together in virtual cinemas, but social interaction remains superficial. Avatars only move to a limited extent and the atmosphere feels artificial.

Cinema as a collective experience

Even if you rarely speak during a movie in the cinema, the shared experience creates a connection. This emotional simultaneity, which also works without direct interaction, is missing in most VR environments. The feeling of "watching something together" is difficult to simulate.

Apple Vision Pro as a technical experiment

With Vision Pro, Apple offers the possibility of creating synchronized film experiences with two devices. Both users see the same picture, spatially identical. In practice, however, this remains an exception: two devices cost around 6,000 euros, and three hours with a headset is physically demanding.

Even when watching a 3D movie with simple glasses, many viewers find the technology annoying. The willingness to put on a full headset for a standard movie is correspondingly low.

Conclusion on the social use of VR in entertainment

VR has fundamental potential for social media experiences - especially in the interactive area. In the context of shared film experiences, it has so far failed due to technical, ergonomic and economic hurdles.

Artistic relevance meets limited reach

VR as a cultural medium

Despite all the market problems, virtual reality has long been part of contemporary media art. Festivals such as the Biennale di Venezia (Venice Immersive), SXSW, Tribeca or Laval Virtual show immersive works at a high artistic level.

Many of these works offer narrative depth and visual innovation - be it in the form of 360° films, volumetric environments or interactive story worlds.

Visibility remains a problem

This content often wins awards and is appreciated in specialist circles, but rarely reaches the public. Distribution is limited to festivals, museums or specialized platforms such as the Museum of Other Realities. There is no functioning, permanent distribution channel.

VR content does not compete with arthouse cinema, but often exists in a parallel cultural space - a creative bubble with limited market impact.

The gaming sector as a positive special case

VR gaming shows market potential

Unlike the film industry, gaming has been able to establish itself as a viable segment within the VR world. Titles such as Beat Saber, Half-Life: Alyx and Walkabout Mini Golf combine immersion with interaction - and generate considerable user numbers.

The key difference is that this content utilizes the strengths of VR instead of imitating traditional media forms. Gaming therefore remains the only field in which VR is economically viable.

Conclusion: A strong medium with structural weaknesses

Whether virtual reality can establish itself beyond its niche in the entertainment sector depends on many factors: devices that are more suitable for everyday use, open sales platforms, socially integrated usage scenarios and better accessibility for producers.

The industry has recognized these hurdles - Meta in particular is pursuing an ergonomic approach with smart glasses. Apple is also demonstrating technical innovations with approaches such as synchronized media consumption.

Virtual reality is and remains an exciting, immersive medium - both technologically and artistically. The creative quality of many VR projects is high, but as long as the devices are not widespread enough, the monetization of sophisticated content outside the gaming sector will remain difficult.

The cultural value is undisputed - but without effective distribution, there will be no commercial success. Nevertheless, developments in recent years show that VR is repositioning itself. The direction is right - only the broad market is (still) missing.

Frequently asked questions (FAQ)

VR headsets are expensive, content is scarce and they are often uncomfortable to use - factors that have so far prevented widespread acceptance.
Longer wearing times are uncomfortable with current headsets. Only lighter, more comfortable devices can make longer movie experiences suitable for the masses.
Currently not on a large scale. Platforms such as Bigscreen or the Museum of Other Realities are aimed at a small target group.
Games use interactivity and immersion - the core strengths of VR - while films usually retain traditional narrative structures.
Lighter headsets, better displays, open distribution models and advances in spatial computing could open up the market in the future.