Virtual reality (VR) and augmented reality (AR) combined are one of the hottest Next New Things in Silicon Valley — the latest California technology Gold Rush. As Boost VC partner Adam Draper said in June: “We’re in a VR excitement bubble.”
Nearly $500 billion has been invested in VR startups so far in 2015, according to Greenlight VR:http://blog.ingreenlight.com/2015/09/15/the-remarkable-growth-virtual-reality/
Entertainment is driving the market. The biggest launch is Jaunt VR, which has raised over $100 million, including a recent $65 million Series C by Disney and 7 other funds. Jaunt’s new 64-lens VR camera is initially being sold only to big studios and TV networks, which have bigger budgets and can move much faster than game developers, but smaller game studios are jumping in and will probably use GoPro’s upcoming 16-lens VR cameras. http://www.jauntvr.com/65m-funding-announcement
San Francisco is ground zero for the VR/AR startup boom. Rothenburg Ventures, which runs a VR incubator and a new $10 million fund, hosts a bi-weekly VR Art Design Workshop to attract new startups and identify useful consumer apps. http://www.meetup.com/VR-Art-Design-Workshop-SF/?a=wr1_2
The VR landscape is getting crowded as startups scramble to grab market share: https://www.cbinsights.com/blog/virtual-reality-sapphire-vc/
However, investors may have to wait for mainstream adoption in order to recoup their investments. Meanwhile, many VR films and startups will go bust, as during all startup booms. http://www.forbes.com/sites/roberthof/2015/06/11/vc-investments-pour-into-virtual-reality-startups-but-payoff-looks-distant/
How long will this investment bubble last? At least a few more years since the VR/AR market is forecast to reach $150 billion by 2020, which is twice as fast as the Internet e-commerce grew over 5 years in the 1990s. http://www.digi-capital.com/news/2015/04/augmentedvirtual-reality-to-hit-150-billion-disrupting-mobile-by-2020/#.ViKAvxCrSqk
Why? Unlike VR during the 1990s, which was dominated by big, expensive, clunky headsets, this generation features affordable headsets, including $10 Google Cardboard holders for smartphones and $99 Samsung Gear headsets for consumers. Google has given away 1 million Cardboards, with another 4 million sold. For enterprise and high-end gamers, Oculus Rift headset will reportedly sell for $1,500 early next year. The VR market will be primed with plenty of users, but little content, so the battle for VR apps has begun.
When will VR/AR come of age? It’s still early, but there’s a lot of corporate and VC activity buzzing around this fledgling industry. At Augmented World 2015 in June, most of the VR exhibits looked fresh out of the lab and in search of useful applications. Google Cardboard looks amateurish, while higher-end VR headsets are heavy, clunky, expensive and very technical. Applications are mostly automotive, industrial and high-end gaming, not something for the average business person or consumer, at least not yet. The Oculus headset has attracted lots of attention, but it’s still for high-end gamers.
On the other hand, I recently met a wearable display developer who has created small attachable LC projectors for any pair of eyeglasses. You just attach them to a magnet clip-on. The screen displays a 2D LC screen, but he said it could be improved for panoramic video and eventually AR and VR. Battery life is a problem, but easily solved by swapping out for another set from a charging box. Simple and elegant, with lots of potential, just like GoPro in the early years.
So what will drive VR and AR adoption in volume? Here are my bets:
Architecture, Construction & Engineering (ACE) companies are already using VR to visualize, design, and market their capabilities to clients around the world. I’ve seen several demos, but they’re usually private showings reserved for prospects, partners and clients. ACE is a $7.8 trillion global market and VR/AR would reduce design and travel costs immensely so it’s a natural early market.
Body visualization that allow students, nurses and doctors learn about human organs, limbs and diseases would be a boon to public health education and medical training. When combined with wearable tech, it would reinvent the way we learn and care for our bodies. Telemedicine would enable people in remote towns and developing nations to access quality medical services. One of my Swedish startups offers VR surgery to reduce miscommunications, which cause 70% of mistakes in the operating rooms.
Simple AR games using cheap glasses with clip-on projectors and Bluetooth to smartphones. They would allow gamers to view and even download AR apps. Building block and sim games, treasure hunts, visual quizzes, and other leisure games would be easy to create.
Sports viewing will be a big business since advertisers would be able to offer games, stats, contests, prizes, discounts and other goodies to support local sports clubs and school teams.
Home visualization that would allow homeowners, architects and interior designers to add rooms, textures, extensions, and other features would make it easy to redesign homes and neighborhoods. It would tap into the natural curiosity and desire to visualize and build things without spending any money. Some realtors are already using 360 video to sell properties.
Role-Playing to teach social etiquette, business practices, intercultural relations, professional roles, and other important social skills will become increasingly important in a service economy where people are becoming isolated by smartphones.
These are just some of the VR/AR applications that appear to have some traction among early users. Once Oculus and other VR headsets decline in price, we’ll see an explosion of mobile apps that tap the power of VR/AR processing. Here’s a BBC video about the future of VR to get your creative juices flowing: http://www.bbc.com/news/technology-33155037
In Sweden, my startup team is promoting VR Sustainable Cities among policymakers, design companies, and sports clubs. Join us and share your ideas! https://www.facebook.com/VR-Sustainable-Cities-1430285733935881/