I’ve covered the VR market for a long time—as an analyst for Moor Insights & Strategy for the past 5 years, and even earlier when I was a journalist covering the industry for my own website. When Valve and HTC flew me out to Seattle for the HTC Vive’s launch in 2016, there was a significant thing missing at that event: a Valve VR title. While Valve managed to collect a wonderful selection of VR games, nothing beats a game from one of the most respected and storied game developers in the industry. When Valve releases a game, it usually does very well. That’s been especially true of the Half-Life series, which is at the core of Valve’s culture and has been the launching pad of many different Valve successes based on mods like Team Fortress and Counterstrike. One issue that’s continued to plague the PC VR market is the lack of any single piece of content that is exciting enough to get people to spend hundreds or thousands of dollars on new hardware for VR. The wait could finally be over—Valve recently announced its new VR Half-Life title, entitled Half-Life: Alyx, which will be available in March 2020. Let’s take a look at the announcement and what it could mean for the PC VR ecosystem.
Getting in the game
With Half Life: Alyx, Valve makes some very calculated decisions that I believe are for the good of the ecosystem. The announcement of the first new Half-Life game in over a decade is already a pretty significant deal, but the fact that it is VR exclusive is a huge show of Valve’s commitment to VR. While some have criticized Valve’s lack of investment in VR relative to Facebook’s hundreds of millions of dollars, it is a private company with significantly less resources than Facebook and must be much wiser with how it spends its money. It’s worth noting that some of the most successful game developers and companies in the VR and AR industry have been very frugal with their spending and the size of their teams. Valve has been working on Half-Life: Alyx since the launch of the HTC Vive and SteamVR Valve in 2016—a considerable investment in itself. Not to mention, it developed the Index VR headset and controllers along the way. All this to say that critics of Valve have been a bit harsh.
With Half-Life: Alyx, critics may begin to lay off a bit. Valve’s SteamVR platform supports nearly all of the PC VR headsets in existence and then some. With that, Valve says that Half-Life: Alyx is compatible with the Valve Index, HTC Vive, Windows Mixed Reality, Oculus Rift and Oculus Quest. According to the latest Steam Hardware Survey, the HTC Vive, Oculus Rift, and Oculus Rift S account for 82% of the Steam ecosystem. Throw in another 5% for Windows Mixed Reality and 87% of all Steam headsets support Half-Life: Alyx.
According to Valve’s own estimates, just over 1% of all the PCs that were surveyed as part of the Steam Hardware Survey had VR headsets attached. Seeing as Steam has 90 million monthly active users, that’s probably around 1 million headsets. [WP1] I expect that Half-Life: Alyx will drive a significant amount of users to buy headsets this year, especially Valve’s Index headset and/or controllers—anyone who buys them will get Half-Life: Alyx for free. Additionally, if they buy them before the end of the year, they gain access to exclusive content. I believe this is an interesting, innovative way of encouraging people to get the best possible experience for the game.
Valve’s minimum requirements for this game will likely also drive significant upgrades on the hardware side. The minimum spec for the game is Windows 10, which only 80% of Steam users currently have. Additionally, it will require a minimum of an Intel Core i5-7500 or AMD Ryzen 5 1600 and 12GB of RAM, which means anyone still running 8GB will also need to upgrade. Currently, 54% of all Steam users run 8GB or less of RAM and about 55% run under 12GB. That said, 40% run 16GB or more. Last but not least, the game requires a minimum GPU of an NVIDIA GTX 1060 or AMD Radeon RX 580. Even with those, the game will only run at the very lowest settings, which won’t suffice for most people trying to fully enjoy the first Half Life game in 12 years. The most popular GPU on Steam right now is the GTX 1060, accounting for 14% of users polled. The 1050 and 1050Ti in second and third place, respectively, and represent 15% of the market. Based on what I could find, it looks like approximately 32% of all GPU users on Steam have graphics cards capable of running this game. That’s why I believe that Half-Life: Alyx may be the first game in a very long time to drive a lot of people to get hardware upgrades. Plus, CyberPunk 2077 comes out the month after Half-Life: Alyx; it would make sense for many to spend the money to be able to play both games. I expect 2020 could be a watershed year for hardware upgrades—the likes of which we have not seen in years.
I believe that Valve’s slow and steady approach to Half-Life: Alyx and the Index platform will pay off. Additionally, I think bundling the game for free with its hardware is a clever way for Valve to incentivize people to buy into the best possible experience while also selling more hardware. I am extremely pleased the game will be compatibile with Oculus Quest, since it means that an even larger install base of VR headset users will be able to play on Steam VR and enjoy Half-Life: Alyx. PC VR has been in a bit of a slump for the last year or so and I believe that Half-Life: Alyx is going to help increase VR headset and PC hardware sales. This is the most excited I’ve seen people about a PC VR title, and I have already heard from people who have decided its time to upgrade their PCs for it. 2020 is shaping up to be a very interesting year for PC gaming and VR.