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Sony's PlayStation VR turns out to be a big hit, selling close to one million units

A visitor plays a video game with a virtual reality head-mounted headset 'PlayStation VR' developed by Sony Interactive Entertainment.
Chesnot | Getty Images
A visitor plays a video game with a virtual reality head-mounted headset 'PlayStation VR' developed by Sony Interactive Entertainment.

Virtual reality wasn't quite the hot holiday gift in 2016 that some people were expecting, but Sony officials said Sunday that sales of the company's PlayStation VR have actually outpaced projections.

Sony sold 915,000 of the headsets in the first four months of availability, the company told The New York Times. That makes it likely the company will blow past internal projections of 1 million devices sold in the first six months.

That news could come as a big boost to software developers (especially independent game makers), who have been rethinking their VR plans after many failed to recoup the cost of making early titles. It also firmly establishes Sony as a leader in the VR space. (Oculus, which many considered the flagship product has suffered a series of setbacks lately, losing a case against game publisher ZeniMax which could cost it $500 million and closing 200 of its demo stations at Best Buy stores around the country.)

To date, neither Oculus nor HTC have given firm sales numbers for their VR headsets, but officials at all of the major VR companies have warned investors and analysts to expect a slow ramp in sales.

Sony had a notable advantage in the VR game, though. PlayStation VR was not only $100-$300 less than its competitors, it didn't require buyers to purchase new hardware to run it. And with more than 53.4 million PlayStation 4 units already in people's homes, that made the VR headset more enticing.

Japan has proven to be an especially hot spot for VR, with people lining up outside of stores when new shipments are expected. That's likely to be especially gratifying for game makers, as the Japanese game market has been shrinking in recent years.

Analysts, however, warn that while it's good to see Japan pick up, the success of VR — both from Sony and its competitors — in North America is still uncertain.

"It's unclear how it's selling in Western markets," says Ben Schachter of Macquarie Capital. "That's not necessarily a negative, but the Western companies do not seem to be benefiting from it."

Andrew House, president and group CEO of Sony Interactive Entertainment, says he expects the company to begin selling PlayStation VR in Latin America this fall. Supply constraints, he added, should be eased by April.

Hardware doesn't drive sales in the video game industry, though — software does. And since its launch, PlayStation VR hasn't had a steady flow of new titles. The release last month of Capcom's Resident Evil 7 (which was playable in either standard or VR modes) has re-engaged PlayStation VR owners. House told the Times the average amount of time spent wearing the headset has doubled from those users since the game was released.

"We're still waiting for that killer app," said Schachter. "Most of the things people are seeing on VR is giving them a 'gee whiz' feeling for 15 minutes, then you don't want to do it anymore. ... Think about 'Wii Sports.' That one little tennis game sold 100 million units. And VR doesn't have that yet."