What caused investment enthusiasm for virtual reality ventures to fade during the mid-1990s?

Investment enthusiasm for virtual reality (VR) ventures faded during the mid-1990s primarily because the technology failed to achieve broad consumer appeal as quickly as industry enthusiasts had predicted.1

While the late 1980s and early 1990s were characterized by significant marketing hype and speculation, the standard configuration of VR—which included head-mounted displays (HMDs) and data gloves—did not gain widespread adoption for personal use. Instead, the most successful applications were limited to "location-based entertainment," such as specialized arcade simulators and theme park attractions. The eventual bursting of the investment bubble was further exacerbated by the high-profile failure of specific commercial projects, such as the VR arcades operated by Visions of Reality.1