Head-to-head. We compared two of the most popular tethered virtual reality headsets, the PlayStation VR and the HTC Vive, to get a sense of where VR experiences are today, what needs to improve, and where they might go tomorrow. While each headset has its own specs and limits, VR experiences differ mainly as a result of the type of machine driving them, a computer (Vive and Rift), a video game console (PSVR), or a smartphone (Daydream and GearVR). The takeaway is that the HTC Vive delivers an unmatched experience around visuals, motion tracking and overall performance, but the PSVR is easier to use. Virtual Reality technology as a whole is more developed than many realize. If it is your first time in VR, both of these headsets will blow you away. While we mostly tested games, our experience with these headsets leaves us more optimistic than ever about VR’s future in consumer and commercial use cases from entertainment to training and therapy.

The PSVR is the most popular VR headset out today (2m units in the year after its Oct-16 release), while the Vive – along with the similar Oculus Rift – is on the high-end of both cost and performance. We believe there will be 536m VR users in 2023 with a market value of $62B compared to the 25m users in a $3.5B market today. These headsets have reinforced our faith in the technology’s potential, but have also shown us there is still a long road ahead.

Untethered VR around the corner. Last week Lenovo announced Mirage Solo, an untethered standalone hardware VR headset, that runs on Google’s Daydream platform.  It will be priced around $400 and ship in the spring of 2018. We believe Mirage Solo will mark a measurable step forward in the utility of VR. More later this week.

Verdict. The clear winner was the HTC Vive. The games look better in Vive because its based on a PC that’s capable of better graphics. The superior visuals of the Vive played a significant role in our feeling of immersion compared to the PSVR. Another major advantage for the Vive is the positional tracking via the sensors versus the PSVR which only uses a camera-facing headset. While both have 6 degrees of freedom (meaning it can track up/down, right/left, and forward/back), the Vive’s sensors allow for a “freer” experience than the PSVR. There were a number of times playing the PSVR where we moved out of the camera’s view to peek around a corner or duck behind cover and it caused the game to pause and instruct us to get back into view of the camera. With the Vive we avoided tracking problems almost entirely. The more we played, the more we came to realize that the Vive is simply a better system.

Price. The Vive retails for $599 but requires a PC with sufficient performance specs, which bumps the total cost to around $1000 at a minimum. The PSVR headset sells for $299, but a $430 bundle should be considered the true base price since the camera and controllers are necessary to get the optimal experience (that bundle also includes a full-length game in addition to VR hardware). However, that $430 doesn’t include the actual PlayStation 4 console ($300) bringing the total cost of PSVR to $730 if the bundle route is taken, more if it isn’t. Both devices have a high price point, and to us that means that a quality experience requires significant investment. The PSVR is considered more accessible because of the large install base of the PlayStation 4, while the average PC owner often needs to upgrade their graphics card or buy a new machine with the processing power to handle VR.

Performance. We experienced very few technical problems with either device. We had a couple instances with the Vive where the display in the headset, but not the computer monitor, would go gray for a second and then return to normal. It’s an issue with the headset not being properly tracked, but we were unable to replicate it when we tried. The handheld controllers in both systems tracked beautifully (when unobstructed by each other in the PSVR’s case). They were responsive, felt natural, and have intuitive navigation and controls. One of the games we played in the Vive, Superhot VR, relies exclusively on the tracking of the headset and hands in order to dodge, aim, and throw objects at enemies. We were completely blown away by the system’s ability to accurately detect our every move.

Visuals. The Vive outshined the PSVR here. The PSVR’s graphics are not the PS4’s graphics. They actually look a little worse than PS3 graphics, which was released in 2006. The Vive was notably better, though both headsets suffered from the “screen door effect”, where it appears as if there’s a screen door between the wearer and what’s seen in the headset. The new Vive Pro headset, unveiled earlier this week at CES, reportedly cuts down on this effect while improving overall resolution. In the PSVR we have been playing a lot of SkyrimVR, the repurposed version of 2011’s smash hit fantasy RPG. Skyrim is famous for its stunning visuals, so as you can imagine there was a great deal of excitement over being able to experience it in VR. Unfortunately, we were disappointed by the PSVR’s visuals relative to its two-dimensional counterpart; it was unable to deliver the beautiful in-game graphics we were hoping for. That being said, the giant spiders were still incredibly unsettling in a very visceral way, and we believe that to be a credit to the headset’s ability to fully immerse its wearer.

Comfort and fit. Both headsets felt comfortable but the Vive edged out the PSVR because it was easier to put on, calibrate to different wearers, and lighter. We enjoyed the velcro straps on the Vive to secure the headset over your eyes more than the tightening wheel on the back of the PSVR. The fitting system on the PSVR has a “head squeezing” feel and while not uncomfortable, it didn’t fit quite as well as the Vive. The Vive also closed off the area below the eyes more completely than the PSVR, meaning less light was allowed to seep through the bottom part of the wearer’s periphery.

Problem areas. The biggest shortcoming for both headsets was in-game movement. The headsets are both tethered to the PC/PS4 so there isn’t much freedom to physically move around. Most games use a form of teleporting, where the player presses a button and selects where on the ground (in the display) around them they would like to move to. It feels clunky and definitely is immersion-breaking. In Skyrim we were able to change the settings to move normally, without teleporting, which felt much more natural. Separately, eliminating or even mitigating the screen-door effect on visuals is imperative. Cutting the cord is also a must – they get in the way, become tangled, and in general are a hassle. We recognize these as growing pains that should be expected of any new tech product, but this issue is already being addressed by the Oculus Santa Cruz project and the Vive Pro.

Bottom line. The Vive is without doubt the superior headset, however the PSVR is great and any PS4 owner interested in VR should consider getting one. The two were not without their drawbacks, but overall we came away feeling optimistic about the future of VR. The industry has hit a rough patch and isn’t seeing the adoption many were expecting, leading some to believe VR will go the way of the HD DVD instead of Blu-ray. We, however, are still strong believers in VR. It’s fun, the games are accessible and attractive to non-gamers, it has limitless potential outside of gaming (despite only being in the embryonic stage), and above all it works. The biggest concerns for VR are whether technology can advance to a point that allows VR to fix its current problems as well as improve on what we have today (smaller headsets, better graphics, haptic feedback), and allow for compelling content to be created. Only time will tell.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.