Games makers are gambling millions on the success of virtual reality despite the technology failing to take off many times before.

At the Consumer Electronics Show in Las Vegas, Sony, Microsoft, Oculus, HTC and Nokia are just some of the firms showing off their VR products, with some due out this year.

When they are, a host of games studios will be ready to capitalise on what some analysts say could be an industry worth billions.

Rebellion in Oxford is investing more than £5m into its first virtual reality game and is banking on the technology taking off despite multiple false starts since the 1980s.

Founder and CEO Jason Kingsley OBE said it is a risk he is happy to take.

“We are probably spending somewhere in the region of £5m on developing this game,” he told Sky News.

“That’s a lot of money but I think it’s recoverable.

“It’s ultimately down to the third party hardware manufacturers who are releasing the headsets and ultimately up to the consumer to decide that it’s a good idea.

“We have been here before with VR but the (computing power) just wasn’t good enough and now I think the technology has the best shot at success.”

Earlier this week the Facebook-owned company Oculus received so many pre-orders for their Oculus Rift headset that it pushed back shipping dates to cope with demand.

But hyped technology like Google Glass, smartwatches and 3D TVs have failed to live up to expectations in recent years.

The last attempt to bring VR to the mainstream was Nintendo with its Virtual Boy console in 1995 which failed to sell a fraction of the units expected.

Guardian games writer Steve Boxer said: “Because of the price of the headsets, we are talking £500 for Oculus Rift, you really will get only at first early adopters and enthusiasts and those who absolutely must have the latest new experience.

“But it does have every chance of eventually becoming mainstream.”