Now that it's 2017, I thought I'd look back and see if there are answers for the eight questions I asked a year ago about virtual reality in 2016. Here goes:

"How big will the market for VR be a year from now?"

This isn't an easy to question to answer right now. My guesstimate a year ago was that by the end of 2016 there would be around 10 million active users of VR. I absent-mindedly didn't think to define what I meant by "active user" -- I suppose I meant someone who uses VR at least a couple of times a month -- but even if I had been more specific, I haven't seen any reliable numbers on how many people are regular users of VR anyway.

The most reliable-looking numbers I could find were some recent estimates of headset sales from SuperData Research, a research firm based in New York. They released 2016 sales projections in November that put Samsung at around 2.3M Gear VR headsets, Sony at 745K PSVR headsets, Oculus at 350K Rift CV1 headsets, HTC at 420K Vive headsets, and Google at 260K Daydream headsets. That's just over 4 million headsets. They also estimated overall there would be about 16 million VR users by the end of 2016, which means they're almost certainly including people using really basic headsets like Google Cardboard to get to that number.

We can debate whether or not very basic headsets like Cardboard should "count", but if I'm being honest I wasn't including them when I came up with my guess of 10 million VR users by the end of 2016. How did I get to that number? I figured that by the end of the year there would be 3-5 million Gear VR users, 3-5 million PSVR users, 1-2 million Oculus Rift owners, and 500k-1M HTC Vive owners. That's not far off from projections that analyst firm Piper Jaffray made in 2015 (I've included those numbers in a chart alongside those from SuperData).

Here's where things get messy. Samsung announced at CES earlier this week that they'd shipped 5 million Gear VR headsets, more than double SuperData's estimates. That does cast some doubt on the accuracy of their sales estimates for other headsets, but I don't think anyone believes that sales of the Rift or Vive approached anywhere near Piper Jaffray's projections.  

We're still in the very early days of VR -- in my post a year ago I compared where we were to the smartphone market pre-iPhone -- so perhaps it's pointless to argue over whether headset sales falling below some analyst's projections even matters. But one big difference between smartphones and VR is that even before the iPhone was announced it seemed inevitable to most observers that smartphones would become ubiquitous. It was just a matter of how and when, not if. With VR it is still very much an open question whether it will remain a relatively niche market or find a wider audience. How strong or weak sales are at this early stage aren't determinative, but they do give us at least some indication where things are going. I'll have more on this for my questions for VR in 2017.

"Will headsets be a commodity or a source of competitive advantage?"

Too early to say yet, but at the very least Oculus' fully integrated model does seem like it's due for a collision with Microsoft and Google's strategies of working with OEMs to build cheap headsets. I doubt that we'll have any idea of how this shakes out for a few years, but VR definitely doesn't have a shot at going mainstream until you can buy a high-quality headset with room-scale positional tracking (which allows you to physically move around in virtual spaces, leading to a much more immersive experience) for less than a couple of hundred bucks.

"Speaking of hardware, what will the relationship be between high-end and low-end VR?"

There's not much evidence that owning a Gear VR or Daydream headset leads to buying a Rift or Vive (or investing in a PC to power it), but 2016 did see Oculus teasing the "Santa Cruz", a prototype of a self-contained mobile headset with inside-out positional tracking. This could end up being a sort of third category in-between the lower end stuff (which is powered by popping your smartphone into a headset) and the higher end stuff (which offers the best and most immersive experience, but which also requires a powerful PC with a dedicated GPU). Intel showed off an early version of headset along these lines code-named Project Alloy (pictured above), and Google is rumored to be working on something here as well. It's possible that this will be how a lot of people get to experience true room-scale VR.

"Will regular people create and share VR content? If so, how?"

Even though Facebook and YouTube have started supporting it, very few people are sharing VR (and really we're talking 360) photos and videos online. This is partly because you need a dedicated 360 camera for creation (apps for doing this on a smartphone are uniformly awful) and partly because even if you do share something it's unlikely that your friends or family will have a headset for properly looking at what you've shared in 360. I looked at a number of startups building platforms for sharing 360 photos and videos, but ended up passing on all of them, partly because of how small the market still is and partly because of concerns that Facebook, YouTube, Instagram, etc will eventually drive a lot of this activity since they're where people are already sharing and consuming photos and videos. Underscoring my point, Vrideo, which was building a YouTube-for-360-video, shut down late last year (betaworks was an investor, though this deal was made before I joined). They'd managed to aggregate one of the biggest audiences for VR content to-date and they still couldn't find a way to make it work, and believe me, they tried. I'd love to find something great in this space, but the bar is very high.

"Will there be an app which drives mainstream adoption?"

Didn't happen in 2016. But if you're building this, definitely find me. That said, VR apps in general did shoot up the iOS App Store charts this past holiday season, which presumably means a lot of regular consumers received basic "pop your phone in" headsets as gifts and started giving VR a try.

"What will be the user experience paradigms which define VR?

This still feels entirely up for grabs, but we did see a ton of experimentation, particularly in gaming. Related to this, developers of social VR products and games were forced this past year to confront thorny issues around harassment in virtual environments. It's not something which can be easily shrugged off, and while there is a long way to go, I'm starting to see some developers rolling out solutions to try and address the problem.

"What will Microsoft end up doing?"

Well, we got our answer, at least in part, with the announcement of Windows Holographic and the line of VR headsets which partners are making for it, but we still know very little about how VR will factor into the upcoming "Project Scorpio" Xbox due out before the end of the year.

"What will Apple end up doing?"

I'm highly skeptical that Apple is building a clear iPhone 7 for AR and VR, but apart from that rumor we don't have a strong sense of what Cupertino is going to do here. We do know that a few months ago Apple CEO Tim Cook expressed skepticism about VR, saying that it, "Is not going to be that big compared to AR," so it's entirely possible they'll continue to ignore the market and focus instead on launching something related to AR in a year or two (or possibly more).

Ok, thanks for reading! I'll be back with my questions for VR in 2017 in a few days.