Opinion: Virtual Reality is a sideshow to the main event

Written by Andy Stout

ShutterstockIn the blink of an eye...

Having been a skeptic all through the stereo 3D years, Andy Stout sees no reason to chance his stance when it comes to Virtual Reality. Augmented Reality on the other hand…

A recent study on the growth of the virtual/augmented reality market by Digi-Capital suggested that it might be worth as much in $150bn in annual revenue by 2020. These are astonishing figures, especially considering that the spread in reports from last year indicated that by 2018 it would be only worth somewhere between $1bn and $5bn.

So, what’s changed in the meantime? Well, everything really. As you’ve been able to read here and elsewhere Facebook bought Oculus Rift, Microsoft released its HoloLens, Google and others ploughed half a billion into Florida start-up Magic Leap, Sky and other broadcasters started doing significant tests on the technology, and Olympic Broadcast Services said it would favour VR over even 4K from next year’s Rio Olympics.

Basically, the tech-savvy world and his wife checked their smartwatches for the departure time and leapt on the VR bandwagon.

All the same, going from niche forecasts to mass market ones is a considerable jump. However, Digi-Capital’s report is not quite as lunatic as it first looks — it puts the 2018 market at a shade under $50bn before a steep rise over the following two years — but even so that is still 10x what even the most optimistic previous report was reporting.

The difference is AR. Digi-Capital divided the market into VR and AR, and the latter is where the company sees the real growth coming.

“Where VR puts users inside virtual worlds, immersing them, AR puts virtual things into users’ real worlds, augmenting them,” wrote company MD, Tim Merel, at the time.

The point is that the immersive nature of full VR limits its deployment. Exactly who the industry reckons its core market is varies, but I would suggest you could lump gamers, 3D film (remember them?) enthusiasts and niche commercial users such as surgeons etc into the pot… It could also very conceivably go on to find favour with what we can euphemistically refer to as the adult, one-handed audience too. But that’s about it.

The problem is that immersion breaks the connection with our surrounds and, nervous little mammals on the savannah that we still are, we don’t like being shut away from our environment. The arguments about viewers being reluctant to wear glasses to watch stereo 3D were only rehearsals for the derision that will be heaped upon VR headsets once they hit the mainstream, not to mention the attendant lawsuits when little Jonny trips over the cat while chasing Princess Anna down a mountain…

As a result, the chances are that its roll out will closely follow that of a new console, providing significant revenue and hoovering up the early adopters, but not being a game changer per se.

The growth of AR though could be more analogous to the smartphone market and the difference there is in the numbers. VR = 10s of millions of users. AR = 100s of millions, which is why Digi-Capital is forecasting that out of that $150bn yearly revenue, $120bn of it will be provided by AR.

Of course, AR to date has been patchy. Google Glass, while an interesting experiment, was a technology whose deployment was probably a little bit ahead of its time. But AR certainly has a potential that is perhaps missing from VR, and that's a potential that applies across the board from consumer electronics to mobile data providers to app developers.

Indeed, you could even contextualise the current smart watch and wearables market as a bridge towards AR; a means of getting consumers used to the idea of pairing a companion input/display device with the 4G unit in their bag that provides the connectivity, memory and some localised grunt, everything else being taken care of in the cloud.

There is much work still to be done and the numbers still look on the optimistic side to this journalist’s slightly jaundiced eye. But the argument of AR surpassing VR feels like a sound one.

UK broadcaster and serial technological pioneer Sky has shot some VR tests with a variety of genres of programming and so far the results have been mixed. One of the keys to success from the viewer’s point of view apparently rests in having a lot to look at, so a visually busy sitcom such as its Trollied performed well with test audiences, while its stylish but slow and Arcticly bleak drama Fortitude did badly. It should also be pointed out that having to build 360º sets to accommodate all this, even in CG, is going to be expensive, and so far VR productions look to be coming in around 50% above the budget of conventional ones.

But think about it a moment. An augmented version of Fortitude, for example, one where glasses wearers could call up actor overlays, query character biographies, order music downloads of what was playing in the bar in a particular scene, and even ask what sex of polar bear that was munching on an unfortunate actor’s corpse — all while being totally present in their own living rooms — feels like a much easier sell.

And that’s just TV. Add in the wider arguments of AR advantages in the real world and you have the potential for a very significant new technology, one which could convey a whole range of social benefits and underlying structural changes.

VR? In much the same way as stereo 3D trundled along the hype curve, I think this is a mix of technological determinism and hubris: a ‘build it and they will come’ approach that hasn’t been tested to any significant degree in the marketplace and may well crash and burn in the same lurid manner. AR though, now that, that has a chance.

Tags: VR & AR

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