CCP retreats from VR, cutting 100 jobs and closing two studios

Icelandic games giant CCP has called time on its big virtual reality adventure.

CCP was one of the earliest and largest supporters of VR, but has now announced its intentions to quit the sector. The move comes at the cost of 100 jobs and two studios. Its Atalanta office is being closed and its UK base in Newcastle is to be sold. Its Shanghai studio will also be subject to “reductions and refocusing”.

This will leave CCP operating mainly out of its Reykjavik HQ and London office. MMO hit EVE Online is not affected by the changes, while work on the previously announced PC shooter Project Nova and mobile game Project Aurora continues.

“We have made tough, but important, changes to CCP in response to how we see the gaming market evolving in the coming years,” CCP CEO Hilmar Veigar Pétursson said. “We have been front and center in the second wave of VR and our belief in the long-term transformative power of the technology remains strong.

“Despite the success of the VR games we have released we will be shifting our focus to our PC and mobile initiatives, and will be centralizing those initiatives, along with the support of our existing VR games, to our offices in Reykjavík and London. We will continue to support our VR games but will not be making material VR investments until we see market conditions that justify further investments beyond what we have already made.

“I am very proud of our VR games and, more importantly, of the people here who made them.”

What does the news say about the health of VR?

Virtual reality remains a hobbyist pursuit. This is increasingly less true, of course, with mobile VR continuing to spread and the cost of high-end equipment falling. But despite price reductions, it’s still expensive and the barriers to entry remain vast. While the PlayStation VR is moderately accessible, PC VR still requires an expensive machine and – perhaps even more crucially – a big space and time investment to set it up correctly. Mobile VR gets around these problems, but provides a far weaker experience as a result.

Note, too, that CCP’s VR games are among the most expensive on the market. EVE: Valkyrie was for a long period sold at £40 while even its mobile VR games like Gunjack were comparatively expensive.

The currently limited player base was never going to be enough to make VR development a profitable endeavour at this stage. The gamble companies like CCP made was that by getting in early, they would be best positioned for when VR really takes off.

That hasn’t happened yet. Some believe it will never happen. Plenty believe it will. Certainly, it’s difficult to sample high-end VR and not come away believing it’s an utterly transformative experience. The question, really, is whether it’s an experience that’s right for the home, or whether public VR installations – VR theme parks or arcades – are instead its more viable future.

Until we get to the stage where high-end VR is as simple as picking up a wireless headset off the desk and slipping it on, the medium is always going to struggle. The industry will get there, no doubt – but obviously not in time for CCP.