In 1992,technology giant Sony announced the arrival of the MiniDisc (Ward et al., 1999). This was a time of transitionin the music industry. Sony had become a market leader following its 1979release of the cassette Walkman TPS-L2. However, over the next two decadescassette tapes were gradually replaced by compact discs (CDs), and astechnology evolved it became clear to developers that a new era oftransportable music was emerging (Yoshida, 1994). A constant cycle ofre-invention and innovation is a primary feature oftechnology-driven industries, in part because by the 1990s so many successfulexamples of disruptive technologies had been demonstrated that the entiremarketplace was on edge as it awaited the emergence of the latest trend(McInerney, 2014).
However, as this essay will show, the MiniDisc was an abjectfailure, and there are many lessons to be learned from this in terms of virtualreality (VR) innovation. Discussion Intechnological terms, the MiniDisc remains impressive. Its data-compressioncapabilities meant impressive storage at a fraction of the physical size, butquadruple the length, of a CD, with superior sound (Yoshida, 1994). In theearly 1990s, recordable CDs had not yet been invented, so Sony should, intheory, have been the market leader. In a pre-MP3 era, teenagers had to resortto recording music on magnetic cassettes, which, although cheap, was atime-consuming process (Haine, 2009). However, Sony had misread its market: in1992, it managed to sell only 50,000 MiniDisc devices (Faulkner, 2012). Anattempt at a re-launch in 1998 also failed miserably. Threeyears later, in 2001, another product arrived on the market.
This promised todo exactly what the MiniDisc was already, in effect doing: contain high volumesof high quality, easily transportable, audio. Despite launching with a price of$399, which was more than double the equivalent of the cheapest MiniDisc playeron the market at the time (£149), Apple sold 125,000 iPods in its first month(Michaels, 2006). This is an example of market disruption on behalf of Apple,and also of the industry development curve (Downes and Nunes, 2014). Bycreating a disc in a relatively familiar format, Sony were simply upgrading aproduct that consumers already felt was working perfectly well. When Appledesigned the iPod, they were breaking boundaries into new territoriesaltogether – an altogether new type of business model innovation, according toXu and Muneyoshi (2016) – and in so doing they radically changed all aspects ofthe market in a way that none of their competitors had been able to foresee. Thatprice was a major factor remains an inadequate explanation: in March 2002,Apple responded to complaints that data storage was too low by releasing a 10GBmodel for $499 (Michaels, 2006). Recognising the S-curve, Apple discontinuedthe iPod in 2014. At this time, it was still the market leader in thetechnology.
However, rather than struggle through years of declining innovationwhilst awaiting a new competitor to emerge, the iPod made a quiet exit (Xu andMuyenoshi, 2016). Quite what will happen next in the industry remainsspeculative, but the same model is repeating itself within the gaming industry. In thegaming industry, the innovation is largely centred upon virtual reality (VR).Just like large data-storage for music, VR has long been a dream in digitalinnovation (Wexelbhat, 2014). However, the design journey is at the fluid phaseof innovation. It is a market-pull trajectory, with many industries awaitingthe new technology. For instance, it has been heralded as the future ofadvertising (Kumar and Gupta, 2016). However, industry projections that themarket would be worth £7 billion by 2017 (Roettgers, 2017) have failed toemerge, despite significant investment from organisations such as Facebook.
Google, Apple, Sony, Microsoft, Amazon, and over 200 other companies are allworking to create the ultimate VR experience (Dolata, 2017), but none have yetmanaged to capture the interest of the potential market. This is despite thepotential costs being relatively low: Google Cardboard, a VR headset, iscurrently available for just £2.99 (Curry’s, 2017). Whatthis shows is that consumers are currently not recording satisfaction with VRtechnology, in an echo of the MiniDisc failure.
Their basic needs with regardsto the technology are not being met by innovators. Although VR may interestconsumers in terms of ‘excitement’, the products themselves fail to deliver onthe promise (Lanman et al., 2014; vanKerrebroeck et al.
, 2017). This maybe because the excitement has transitioned to the ‘basic’ level, whereconsumers already have an assumption of what the product should be able todeliver, despite the technology itself being at an evolutionary stage. Thisincreases the pressure within the industry, with too many firms competing for adeclining audience (Downes and Nunes, 2014). This slow start suggests that thenecessary innovation to turn VR mainstream has not yet been conceptualised.
Inother words, the iPod equivalent of VR is still a dream rather than a reality. Conclusion Developerscan learn much from the failure of the MiniDisc. If no successful product hasbeen generated during an extended fluid phase of innovation, it stronglysuggests that either the markets are being misunderstood, or the externaltechnology capabilities are not yet available.
For MiniDisc, the problem was twofold.Trying to reinvent an old idea was not exciting for the markets, and powerfuldata drives were required to realise the vision. With regards to VR, themarkets are expectant, but the technology fails to deliver.
This suggests thatinnovation is currently focused in the wrong direction, leaving the possibilityopen that a disruptive technology will enter and overtake the market. Thiscreates a significant dilemma for innovators, but one which promises that thefuture of VR will be as exciting for developers and consumers as the battle formusic has been.