2016 is an exciting year for the emerging field of virtual reality (VR). March will see the commercial release of the widely publicized Oculus Rift, from a company that got its start raising $2.5 million on Kickstarter and was subsequently purchased by Facebook for $2 billion.
Though Oculus has been in the headlines since 2012 and will release the first commercially available virtual reality headset, they’re far from the only player in this booming space. In fact, all of the tech giants including Google, Samsung, HTC, Sony and Microsoft are in the process of releasing virtual reality and augmented reality (AR) products. Also, Apple is currently building up their team working on virtual and augmented reality technology.
Though the technology is still in its early stages, VR is considered by many to be the biggest source of digital disruption since the smartphone. Technology companies that don’t get involved during this critical stage risk falling behind the competition.
We’ve already seen from company valuations and headlines alike that virtual reality is shaping up to have serious market potential. Not only have companies like Oculus and Magic Leap been in the news for their products, but we are already seeing applications of VR and augmented reality technology across multiple sectors, including education, architecture and construction, healthcare and more. The potential for the new revenue streams provided by AR and VR technologies are especially appealing to corporations in the entertainment industry, many of which are actively looking to bolster or replace revenue streams already disrupted by digital innovation. Get ready for concerts, movies and sports events using virtual and/or augmented reality technology resulting in a richer entertainment experience!
Releases of both VR technology and content later this year will begin to answer that question and give experts a better understanding of the rate and velocity at which the general population will embrace virtual reality.
It’s clear from the excitement in the video game industry that VR likely has a big future in digital entertainment. But video game enthusiasts, as well as most tech aficionados, are early adopters who are always looking for the next great experience and won’t hesitate to try on a VR headset. The average person might not share their enthusiasm.
Yet, as the technology develops, it will become far more unobtrusive. Already, rumors about Magic Leap’s technology – said to be a device that projects images directly into the eye, allowing you to “see” virtual projections as naturally as you do the world around you – promise that VR and AR technologies will quickly evolve beyond bulky headsets and smartphone apps.
Despite early optimism, virtual reality technology may still face a long road to widespread adoption. Consumer pricing has long been assumed to be a major hurdle for VR companies to clear. With prices like $599 for the Oculus Rift and $799 for the HTC Vive, the technology won’t be an “instant buy” for many consumers – especially considering that there isn’t yet much VR content available.
Another major stumbling block is processing power. While many of the up-and-coming VR technologies can be plugged into a consumer’s existing computer, most machines lack the raw computing power needed to deliver a good VR experience. Apps like Steam’s VR Performance Test, which checks whether your system is “VR ready,” are being widely publicized amidst the hype, attempting to keep consumers from buying expensive gear that they can’t run. Costs, too, seem even less manageable if one must buy a top-of-the-line computer just to play with a new VR toy.
While advances in technology have created a much more realistic, natural-feeling VR experience, some individuals still struggle with nausea and dizziness in response to VR projections. Mental health concerns are also on the radar, with questions raised regarding potential long-term psychological effects of VR experiences. While scenarios like those seen in sci-fi movies, where individuals become wholly lost in their VR fantasies, are farfetched at best, negative publicity along these lines at an early stage could result in a longer, rougher road to widespread adoption of the technology.
Even with these drawbacks, it’s clear that virtual reality is an exciting technology set to transform how we interact with digital content and the world around us. Look for big announcements in the year ahead – and even bigger impacts for years to come.
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As the Director and Head of KPMG Tech Growth, Patrick Imbach has significant experience helping early stage and fast growing technology companies in the UK, many of which are Venture Capital backed. Patrick is also a member of the KPMG Enterprise Global Innovative Startups Network. In this role, he contributes to KPMG’s global initiatives strategy, as it relates to working with the innovation ecosystem, including entrepreneurs and fast growing venture backed companies.
Quarterly global report on VC trends published by KPMG Enterprise.