As part of their announcement chain for the Game Developer’s Conference, AMD released an interesting figure: AMD will power 83% of the total addressable market for Virtual Reality. Wording is key here, as total addressable market is far different from market share. In fact, there really isn’t a market to share just yet in tethered Virtual Reality, as all prior device releases have been development kits; the Oculus Rift and HTC Vive are releasing within the next few months, and Sony’s PlayStation VR is slated for mid-year.
In this case, total addressable market for AMD includes game consoles and PC, which still does not likely measure up to the 83% claimed by the company. AMD is powering both the Xbox One and PlayStation 4. The PS4 is the only console with a confirmed Virtual Reality presence, in PSVR, so it can be assumed that AMD will take 100% of the market with PS4. The large install base for PS4 suggests a likely solid number of shipments for PSVR in most circumstances.
The Xbox One is a bit of a wildcard; while no first party VR device has been revealed, the increasing push towards the Unified Windows Platform and greater PC/Xbox compatibility and synergy suggests that there is potential for PC-targeted VR devices to see use with the Xbox platform. This can either be done through streaming capabilities, where the Xbox streams content to a compatible PC (already a feature of the platforms), or a dedicated VR HMD in the future. Streaming reveals some concerns surrounding compatibility, driver support, and latency. While compatibility and drivers can be sorted relatively simply, latency can be detrimental to VR, and potentially make VR unusable with motion sickness and discomfort if latency is high enough. Also, network latency is something external to the Xbox or PC, and creating a requirement for that uncontrolled variable may prove too unpredictable to be viable.
The PC space remains similar to the state outside of VR, with AMD primarily competing with NVIDIA in the GPU space and NVIDIA holding majority market share. Both AMD and NVIDIA have multiple GPUs meeting recommended requirements for VR, as well as low-level software layers (LiquidVR for AMD and GameWorksVR for NVIDIA) for development and software support. Both companies also are involved in “VR ready” bundles for the Rift and Vive. If likened only to GPU market share, than AMD can only expect around 20% market share in the PC space; this is assuming that performance, hardware bundles, software, and support benefit both companies equally and do not drastically change previous market trends.
One component that should be noted in the PC space is performance, as AMD is looking to have an advantage here. Asynchronous compute capabilities are present already with AMD and their LiquidVR, while NVIDIA are still working to support it and have been quiet on the matter. DirectX 12 rolling out adds to this, with AMD showing better performance on DX12 than comparable NVIDIA cards. Even so, NVIDIA has enough of a market lead that these facts will not significantly affect the space unless the performance gap widens greatly.
Considering these points, AMD’s footprint in the total addressable market for VR is likely closer to 50%; even though consoles are exclusively with AMD, the current market outlook favors PC for two of the three major HMD products, and AMD still lags behind NVIDIA considerably. Neither AMD nor NVIDIA has a significant advantage in terms of availability, hardware bundles, or software support, with both companies aggressively pushing these categories. This all holds true in the short term, although long-term factors, such as NVIDIA’s upcoming Pascal architecture update, new VR devices, and developer support, could change this.