At the Cannes Film Festival’s XR program, VeeR co-founder Jingshu Chen delivered a keynote on monetization of virtual reality, in which she referred to Gartner’s well-known Hype Cycle for Emerging Technologies. She pointed out that Facebook’s 2014 acquisition of Oculus sparked the “peak of inflated expectations,” followed by a downhill path to the “trough of disillusionment” beginning in 2017, when headset sales slumped and some VR companies pulled back. Now, she said, we could be on the upward “slope of enlightenment.”

Variety reports that Chen cited “growing VR headset sales, notably the attractively priced Oculus Quest 2 released last year” as well as games content which is “taking off.” In February, Facebook stated that “60 virtual reality games and apps on the Oculus Quest VR headset platform have generated more than $1 million in revenue … [with] six titles generat[ing] more than $10 million in revenue on the Quest platform.”

Omdia reported that, “2.3 million Quest 2s were sold globally in the last quarter of 2020, and that the headset should be able to achieve 5.1 million sales in 2021.”

Omdia said that VR is “taking small steps towards becoming a mass-market proposition … [with] principal analyst George Jijiashvili [noting that] household penetration remains tiny — a mere 1.2 percent across the leading 32 countries.”

“This could grow to 5 percent in 2025, highlighting the long road ahead for mass adoption of VR,” said Jijiashvili, who added that total VR content revenue was $1.1 billion in 2020, “just a drop in the ocean in the context of $168 billion total spend on games in 2020.”

More problematic for creators of narrative VR content, “headset manufacturers seem resolutely focused on the gaming market, amid signs that early adopters are largely from the gaming community.” Jeffrey Travis, founder and chief executive of VR technology and theatrical firm Positron noted that, “very few pieces of narrative content have made money because of limited distribution outlets.”

“A lot of the time, narrative VR content is simply not going to be discovered by audiences, because they don’t know where to find it,” he said.

For now, said Travis and Chen, “the big opportunity for content creators lies in monetizing through location-based entertainment (LBE) VR.” In China, said Chen, VeeR has built out 30 outlets for its ZeroSpace-branded VR cinema chain, which are “attracting broad audiences keen to experience VR storytelling, not just the male game-focused types who have been early adopters of headsets.”

“Location based VR cinema is a faster way to get VR content to the mainstream,” she said. Positron, which sets up VR theaters with “its full motion Voyager VR chair platform, and supports [them] with software and licensing content,” is setting up operations in five new locations this year, including Melbourne, Houston and Yosemite National Park.

CNET reports that, “Netflix just made its most public display of interest in expanding into virtual reality and gaming, after years of batting away questions about pursuing VR and even more years of barely there baby steps toward video games.”

The streamer inked a new multi-faceted deal with producer Shonda Rhimes, including “the opportunity to exclusively produce and distribute potential gaming and VR content … the clearest public statement that Netflix is interested in broadening into video games, a major entertainment category, and virtual reality, a fledgling one.”