The VFX-1 was based on camcorder viewfinders micro-displays, those in turn where limited by PAL/NTSC resolution. This was not a problem when the VFX-1 was released, as most games where running in 320x200 anyway.
As time went on, monitors and games got a lot better and VR headset didn't, due to not having any better displays available on the market. The consumer VR market itself was never anywhere near big enough to incentivise the creation of custom VR displays.
There were still headset in the following years, such as the Eye-Trek FMD, but they went away from VR and towards just being a wearable screen. They didn't have any tracking or controller.
Even the modern VR revival only happened because smartphones got good enough and provided and alternative for the old micro-displays. Which in turn also allowed a much bigger field-of-view, which helps a lot with the immersion. A big field-of-view was also something that was impossible with the old micro-displays, as you need a physically big screen to get a big field-of-view, those micro-displays however were tiny and limited to 30-60°, modern VR has around 100°.
On top of that comes just the surrounding technology, when VFX-1 came out, most games where not even rendered in real 3D, just pseudo-3D. That means you couldn't even make full use of what the VR hardware was capable of. Without having position-tracked controller, VR was also fundamentally limited to being little more than 3D screen with a bit of headtracking. It didn't look bad, but it just wasn't comfortable to replace a monitor.
Also worth pointing out that nothing of his has fundamentally changed. Modern VR has been around for 10 years at this point, and is still struggling to find any mass market acceptance. VR support in normal games is just as bad, if not worse, than it was back in VFX-1 days. Meanwhile most native VR games are just small scale indie stuff. The tracking and controls got a lot better, but the screens are still far away from competing or replacing an actual monitor.
At this point I am reasonably convinced that VR won't take off until it can fully replace a monitor, meaning resolution has to be at least double of what it is now. The motion-gaming that VR can do, certainly has an audience, but that doesn't look to be enough to get any wide adoption. There is also nobody left to really do high-budget VR content, Sony might still have a shot, but Meta seems to have given up and everybody else left the VR space for good.
As time went on, monitors and games got a lot better and VR headset didn't, due to not having any better displays available on the market. The consumer VR market itself was never anywhere near big enough to incentivise the creation of custom VR displays.
There were still headset in the following years, such as the Eye-Trek FMD, but they went away from VR and towards just being a wearable screen. They didn't have any tracking or controller.
Even the modern VR revival only happened because smartphones got good enough and provided and alternative for the old micro-displays. Which in turn also allowed a much bigger field-of-view, which helps a lot with the immersion. A big field-of-view was also something that was impossible with the old micro-displays, as you need a physically big screen to get a big field-of-view, those micro-displays however were tiny and limited to 30-60°, modern VR has around 100°.
On top of that comes just the surrounding technology, when VFX-1 came out, most games where not even rendered in real 3D, just pseudo-3D. That means you couldn't even make full use of what the VR hardware was capable of. Without having position-tracked controller, VR was also fundamentally limited to being little more than 3D screen with a bit of headtracking. It didn't look bad, but it just wasn't comfortable to replace a monitor.
Also worth pointing out that nothing of his has fundamentally changed. Modern VR has been around for 10 years at this point, and is still struggling to find any mass market acceptance. VR support in normal games is just as bad, if not worse, than it was back in VFX-1 days. Meanwhile most native VR games are just small scale indie stuff. The tracking and controls got a lot better, but the screens are still far away from competing or replacing an actual monitor.
At this point I am reasonably convinced that VR won't take off until it can fully replace a monitor, meaning resolution has to be at least double of what it is now. The motion-gaming that VR can do, certainly has an audience, but that doesn't look to be enough to get any wide adoption. There is also nobody left to really do high-budget VR content, Sony might still have a shot, but Meta seems to have given up and everybody else left the VR space for good.