And even though for everybody who has experienced the latest VR gear it is obvious that we are "getting there" in terms of technological feasibility, people are confusing progress in hardware components that make the new generation of VR possible, with the actual progress in VR.
Let's look at what are the key components of the current generation VR headset: cheaper higher resolution screens and cheaper and more compact sensors. And why did we get cheaper and better screens and sensors in the first place? That's right — smartphones! And why did smartphone hardware become so much better and more affordable? Right, because everybody actually needs them! Smartphones do solve lots of people's problems, in contrast with a VR headset, which is still quite an esoteric piece of entertainment.
This looks like a typical mistake made by a technology-first startup: "build it and they will come". And it is obvious why: VR can reliably produce an incredible wow-effect. The problem here is that there is still a lot of unsolved issues, which you start noticing after the wow-effect wears off. A recent article by Alex St. John "VR Is STILL a Stupid Idea!" covers pretty much all of it, but to sum it up again: it is just plainly awkward to use. And we'll see more VR doom predictions as VR slowly fails to cross the chasm.
AR, on the contrary, has lots of actual problem solving use cases, too bad if it suffers collateral damage of the VR collapse. Luckily, Facebook seems to to realize this.
Of course it is not all doom and gloom, there are actually some interesting VR use cases that already work, but with all its clumsiness and without a killer use case it is destined to stay a very niche thing. VR gym anyone?
One example of a killer use case that many people and businesses would relate to, is full-immersion teleconferencing, with 100% eye contact and natural emotion simulation. Unfortunately, the current generation VR is still not there yet.
People who are trying to push VR further tend to ignore the "awkwardness" argument: "Look, it is only getting better!". Sure, as hardware improves, the wow-effect becomes better and better, but there is still a long way to go and a lot of difficult problems to overcome.
As it happened with every "groundbreaking technology", VR is going be re-invented over and over again. My bet that it will take another 10-20 years before it overcomes awkwardness and goes mainstream. Unless someone invents a VR headset with non-invasive neuro-interface earlier than that.