I don't think VR is 'dead' per se, not at all, but it's definitely not thriving or 'living' as the opposite of the thread title. It's just in a weird place for this market and I don't see how it goes from where it is to where the most enthusiastic of people think it can get to.
Like there are just things with VR that don't really work in the way that they do 'normally' i.e. sans VR. Consider Astro Bot for example, a game with fantastic critical and consumer response, exclusive to a particular VR system. Now normally such a product should expect a drastic increase in popularity and such as a result- be it Nintendo, Sony, Xbox even Sega. Yet VR sales decreased WoW when Astro Bot released in the U.K., and correct me if I'm wrong but we still don't know anything definitive about how well AB sold and how much it benefited PSVR. Like did it sell well enough for a sequel? Maybe I guess, Sony don't diverge a lot of information about these things so we're left to guess but even if it did why would Astro Bot 2 be any different than the first? It could be great yet again but what will change? Will it just sell to the same audience again? Probably if my thinking is correct.
Another example is the press. Again if something is healthy it gets discussion, people want to talk about it and they want to click on articles, essays, interviews whatever that tickles their fancy. Again be it PC gaming, Nintendo, PlayStation it doesn't matter, they all get lots of press and even have dedicated sites and channels that do well for themselves. The exception again is VR. The demand for VR articles is apparently really, really, really low. So low in fact a journalist or blog writer I forget who it was commented here that they reckoned an article discussing their favourite colour would generate more clicks than practically anything VR related would have. And this of course is a vicious circle- no demand for articles leads to less of them and less articles leads to less discussion and subsequently less sales and you get the point.
And those are just 2 good examples. One could go on about stuff like how exclusionary it currently is for people prone to headaches/migraines, disabled people who can't as easily experience full room Vr or people who just don't have the space for such an experience, how hard it is to sell the experience without trying it, how stuff like RE7 being exclusive to one specific VR product is extremely counter productive in helping the market grow or even getting into subjective points that lots of people don't want to play games with a headset on... ever. Or even that lots of VR games are bad and few are as good as they need to be to reach the masss market. Like I haven't played it yet but is Blood and Truth what people were hoping for at this stage? Like 3 1/2 years from launch?
But this comment is waaaay too long already so I'll leave it at that.
