There is no question that virtual reality (VR) and augmented reality (AR) are becoming mainstream. This is true both in the applications they are incorporated into and in the revenue stream they are generating.
VR has been around for more than 60 years, driven by mainframe-powered units such as commercial flight simulators and military training systems. Even consumer-oriented VR of sorts has existed for more than 40 years. While it wasn’t the fully immersive VR of today, it was an introduction to on-screen computer-generated worlds. Moreover, personal computers such as the Osborne, Kaypro and especially the Apple II brought a form of rudimentary virtual reality to computer gaming in the late 1970s.
Also, the introduction of the IBM PC and a host of MS/DOS personal computer clones in the early 1980s produced the computing power required to generate somewhat realistic on-screen virtual worlds. In addition, Microsoft’s Flight Simulator, probably more than any other application, introduced consumers to a touch of VR.
Consumer VR Trickles Down
Jump ahead 40 years and VR has become much more sophisticated, and much more realistic. However, while computer gaming expanded exponentially over that time, until just a few years ago, VR was just a small segment of the overall computer market. After all these years, the vast majority of applications are still consumer-oriented gaming and entertainment.
In the last three or four years that has started to change. VR applications are becoming increasingly commercial. They are now incorporated into a wide range of presentations and marketing campaigns in education and training; real estate; product design, manufacturing and marketing; fashion; art; and retail sales; among others.
Marketing campaigns like Audi’s Virtual Reality Showroom are making it possible for potential customers to virtually configure and, to a certain degree, experience their dream car. Consumers can pick the model, the color and the accessories they want. Nothing in that showroom is real. Everything is computer generated.
AR: An Extension of the Real World
AR, the integration of computer-generated objects into real life settings, is a relatively new phenomenon. While VR is an alternative to the real world, AR is an extension of it.
AR makes it possible, for example, to shop online for home furnishings and view the items in the actual setting where they’re going to be used.
Online marketing firm Wayfair, for instance, created an app that makes it simple to change colors, styles or sizes and see exactly how the final product will look in someone’s living room or bedroom. Everything in an AR scene, except the computer-generated AR object itself, is real.
Rapid Market Growth
By all indications, the VR/AR market is exploding. According to IDC, spending in 2018 will reach $17.8 billion. That’s close to double the $9.1 billion spent in the market in 2017.
Rapid growth will continue. In fact, IDC expects 2021 sales to exceed $20 billion. They see this market achieving a five-year CAGR of more than 98% between 2017 and 2021.
Additionally, Zion Market Research has a similarly optimistic projection. They put the VR/AR market at $26.8 billion by 2022. That’s way up from the $2 billion the company reported in 2016.
While commercial applications are growing rapidly and will dominate the technology in the years ahead, IDC and Zion found the consumer market is the single strongest segment. IDC predicts that worldwide consumer spending on VR/AR will top $6.8 billion in 2018. The bulk will continue to be gaming.
Consumers are flocking to the technology. Just four years ago, there was less than a million immersive VR users. Zion estimates there are now 150+ million users. Moreover, the numbers continue to grow as VR/AR applications penetrate more markets. Major players like Facebook and Google are aggressively pushing the technology and integrating it into their platforms.
Currently, VR revenues still dominate the market. Because special equipment is required to view VR, most revenue comes from hardware sales. You can only experience true VR via headsets. These are mainly bulky devices tethered to some sort of high-powered processing unit, such as a PC, game station or smartphone. But that’s changing. By early 2019, stand-alone headsets will reach the market.
A leading headset manufacturer, Oculus will release the Quest, a wireless VR system expected to cost $399. Coupled with hand-tracking devices, Quest works independently of any other computing platform.
Expanding VR with Sensory Simulation
There are also other developments in attempts to expand the reality of virtual reality. There’s work going on now that will add other sensory simulations, such as scent and temperature adjustments, to the VR experience.
The interest in adding scent to entertainment goes all the way back to the early 1950s. Hans Laube developed the Smell-O-Vision system for movie theaters. It never really achieved popularity or commercial success.
Now scent is being developed as an add-on to VR. Stanford University’s Virtual Human Interaction Lab is working on systems that add smell to virtual reality for research on food perception.
Moreover, there’s already a commercial VR scent-generating device available. The Japanese firm Vaqso released a tiny device that attaches to a VR headset. The device releases different odors, with the intensity of each smell controlled through a fan in the headset.
However, it is still too early to tell whether users will take to the idea of smelling their virtual world or if they will reject the concept, as they did Smell-O-Vision.
In addition, there are companies looking at ways to change temperature perception through things like modifying humidity or adding spray mist. The ultimate goal is total sensory immersion.
There are also some disconcerting trends in VR. Because VR worlds are becoming so realistic, it’s increasingly difficult to determine what is real and what is not.
One of the latest VR trends is facial mapping. There are companies developing 3D modeling programs that make it possible for anybody to say anything. Using sensors on the face being mapped, and applying that map data onto another person’s video, makes it look like the second person is saying whatever the first person actually said. When paired with voice synthesizing, it’s almost impossible for the average person to tell that the doctored video isn’t real.
The Japanese broadcast network NHK ran a segment where a Tokyo company applied that technique to a Donald Trump video. A person with sensors hooked up to his head was on the left; the Trump video was on the right. All the facial movements and expressions the person on the left made were displayed on President Trump’s face. Whatever the hooked-up person said, the president’s video also said—in a voice very close to Donald Trump’s actual voice.
It was still possible to see that it wasn’t quite real. However, that demonstration was a very good indicator of things to come. Within a few months, no more than a year, it will be impossible to distinguish if a person actually said something or if it was computer generated. Just about anybody can appear to say anything.
Combatting VR Imposters
In these days of conspiracy theories, fake news and dirty politics, that’s actually quite scary. Could you imagine a video of a computer-generated but very realistic Donald Trump sitting in a very real-looking computer-simulated war room announcing an air strike?
The U.S. government is so concerned about such a situation that it supposedly provides research grants to help determine specific characteristics of real and fake videos. The goal is to make it possible to quickly tell whether foreign leaders, allies or adversaries are actually speaking in a video, or if they are computer generated.
Augmented Reality to Dominate
While both VR and AR will continue to grow rapidly, over the next few years VR will take a back seat to AR. Commercial applications for AR will start to dominate the technology. And because there is no specialized hardware required, AR revenue is primarily generated through software.
What makes AR so appealing to marketers is that there’s no headset required. Only some sort of screen is needed. Nearly everybody in industrial countries, and a large percentage of people in parts of the third world, already have some sort of screen on their phones, tablets or portable computers. That makes it easy for companies to target casual consumers in situations where VR applications wouldn’t work, such as walking down the street, traveling on the subway or even hunting in the Outback.
Targeted marketing campaigns for products and services can appear on consumers’ phones as they’re passing the storefronts that carry those offerings. In fact, almost any type of commercial or educational offering is deliverable by AR—with very little effort required by the consumer to view those offerings.
AR App Potential
In addition, AR complements tourism, travel and transportation. The Vatican, for example, recently introduced an AR app called Follow JC GO! (JC stands for Jesus Christ). Sometimes referred to as Pokémon GO! for saints, the app lets visitors find saints, answer questions about them and then add them to a virtual e-(evangelistic)-team.
For another AR app, Los Angeles International Airport unveiled an augmented reality wall. The AR wall gives airport guests a virtual look at the new International Concourse. Trigger, a company that calls itself a Mixed Reality agency, developed the application. The app lets smartphone users load a scale model of the planned Midfield Satellite Concourse when they’re near the AR wall. The wall is located in Tom Bradley International Terminal.
Trigger has already developed mixed reality experiences for major clients such as Sony, AMC, Honda, Mattel, LEGO and the Spider-Man movie franchise.
However, you don’t have to be a high-tech agency to develop AR applications. Even consumers can create AR experiences. Spark AR Studio, a free download for Mac, makes it possible for the average consumer to generate AR elements. It enables users to create and share augmented reality objects.
You can always tell an application has gone mainstream when the average consumer can get into the act.