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Virtual reality seen on tech sidelines in 2017

Consumer virtual reality (VR) might have been a buzz phrase in the tech scene for most of 2016, but it has failed to gain traction from investors heading into the New Year, according to a venture capitalist.

"I think 2017 will be what we call the winter of VR … especially from an investment standpoint," said Phil Chen, managing partner at Presence Capital, a venture capital fund that focuses on virtual reality start-ups.

Overexposure could be part of the reason why the VR bubble has burst (for the moment). 2016 saw the retail launches of highly-anticipated VR headsets, including Sony's PlayStation VR headset, Facebook's Oculus Rift and the HTC Vive.

Chen told CNBC's "Squawkbox" that "2016 was the peak of what consumers expected of virtual reality. But (the) figures have come out (and) whether it's the high-end HTC Vive (and) Oculus or the mid-end PlayStation, the sales have been quite lukewarm and the experience has been underwhelming."

Another reason? Price points. The HTC Vive, Oculus Rift and Sony PlayStation VR headsets cost $799, $599 and $549 respectively.

In addition, plenty of VR headsets require users to buy top-end PCs to support the high-speed specifications that VR requires. These desktops can cost anywhere between $799 to more than $2,500.

"The set-up process is quite tedious … and the PC is just not as accessible as people (think)," Chen said. "I always compare virtual reality right now with the console business simply because it is still largely a gaming platform. It is far from becoming mass (market)."

Meanwhile, more affordable mobile VR platforms which are more accessible to users tend to provide a "compromised" experience, Chen added.

"There's this play between a lot of volume and distribution on mobile but the experience is not there, and on the high-end, you have incredible experience but … it is not readily accessible," Chen said.

Chen said that four-to-five technologies need to converge in order for VR to succeed in the mass market, including adjustments to the weight of VR headsets and opposition tracking (referring to laser positions that track the headset and head movement) availability on mobile.

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