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Is the virtual reality revolution already over?

  • VR is a big deal, but it’s important to get a gauge of the scale how big it is.
  • VR won’t be a standout success in a similar way to smartphones or internet
  • Some of the challenges around virtual reality include the fact that it requires a change of behavior.
  • VR market niche might be worth more than a billion dollars this year, but it’s almost insignificant when you compare it to what consumers spend on smartphones
  • Scott Galloway: “Virtual reality is dead”

The battle of San Remano by Paolo Uccello – painted more than 500 years ago, was one of the first paintings in the west to use the trick of perspective. When first shown, it was heralded as showcasing a new artistic technology – creating a new era of reality. Uccello was credited with being a pioneer in developing techniques to create new levels of our visual perception. His efforts revolutionized the world of art. Today another reality revolution is taking place. This time it’s being led by computer technologists, who taken up Uccello’s mental to create new levels of reality. The technology they are using is virtual reality.

The investment bank Goldman Sachs estimate that 3,5 billion dollars’ worth of investments have been made in virtual and augmented reality in the past 2 years. Facebook spent 2 billion dollars to buy the VR development company Oculus Rift.  Google has sold more than 2 million cardboard VR headsets in the past 2 years. Big tech companies are now fighting hard to get consumers spending hundreds of dollars on high-end virtual reality headsets.

It’s worth explaining what on earth virtual reality is all about. Virtual Reality or VR as it’s often known, is a technology which creates a new digital environment. Full virtual reality simulations allow you not just to observe a realistic looking world, but to explore one going wherever you want. Other virtual reality branded products don’t always allow you to control events, but do an immersed view in a 360 degree virtual world. Both technologies can be very effective.

If you’ve heard about virtual reality in the past, it’s probably because of VR computer games. You can buy a cardboard VR headset for around 5$, Samsung VR gear set costs about 90$ and both of those you need to use with your smartphone. But things are changing. Developers are increasingly looking at the serious applications for this technology and the most important question is not how VR can entertain us, but how it can fundamentally change our lives.

Microsoft is working on what is perhaps one of the most exciting projects in the whole field of virtual reality research. It’s called “holoportation”. It sounds like something straight from the Star Wars movie. What it does is physically takes one human and puts them into another person’s physical space. In the video, we can see father talking to his daughter, who’s on the other side of the world. They are both physically in the same space, father sees a hologram of her in his physical reality. Thus, they can collaborate together in that location.

Of course, you may or may not want to always have your family present, even when you are thousands of miles away. The idea of never being able to physically escape from mad aunts or uncles or even the ability for trouble your boss to magically materialize next to you may hold more fear than pleasure. But whatever you feel, the technology certainly offers many new ways of communicating and relating to each other.

However, it’s not just a big computer companies like Microsoft, Facebook or Google, who are interested in what VR technology might offer. Researchers in the fields of psychology, medicine, education etc. are also exploring the benefits of virtual reality.

Virtual reality is a technology, that’s beginning to appear in various corners of our world. But like the early internet or ecommerce, it’s sometimes clunky and is not always clear whether technology will go or how useful it will be.  Not every new technology with a promising beginning comes to fulfill its potential.

Facetime and video-conference based working landscape is already entirely feasible for lots of professionals, however they choose not to use it, because it lacks the social element. But once the technology will allow us to add social element to virtual working environment, there won’t necessarily be a compelling case for going to physical work place.

A middle the optimism and grand predictions there is a quiet note of caution being sounded.

How big a deal is virtual reality?

Some people seen VR as important as internet or smartphone – defining technology for our age. But let’s be realistic. Internet is a fundamental tool within most economies and niche markets. We can’t say virtual reality is a fundamental to how we interact with each other either today or five years hence or even 20 years hence.

virtual-reality-trend
Virtual reality interest over time, Google Trends

Some of the challenges around virtual reality include the fact that it requires a change of behavior. In generally consumers don’t like that. Having to wear technology on our heads is something we generally resist. Couple of years back it was all going to be about wearables and smart glasses with cameras, but that hasn’t happened. Four years back also: we’ve seen a surgent interest in 3D printing technology and again – that hasn’t come to much. VR won’t be a standout success in a similar way to smartphones or internet, but then – almost nothing is.

Fitbit is one of the largest wearables makers.

VR is a big deal, but it’s important to get a gauge of the scale how big it is. Various sources and market research companies predict the VR market niche might be worth more than a billion dollars this year. That sounds a lot. It is a lot. But it’s almost insignificant when you compare it to what consumers spend on smartphones.

virtual reality 2016 unit sales

At the DLD 2017 Conference, professor of marketing at NYU stern, Scott Galloway (Galloway’s niche in the field is digital marketing, with his most influential contribution being the Digital IQ index, an assessment and ranking of luxury brands on the basis of mobile, social media and digital marketing),  made a strong  statement about the future of virtual reality.

“Biggest head fake in the history of tech or the last 10 years has been virtual reality. I want to be the first person to say –  virtual reality is dead. I think it’s falling the same lines as 3D printing, mass customization, wearables and internet of things,” he said.

But everything starts small and the potential here is very big indeed, opening the door to enormous possible future profits.

Written by Mantas Malukas

Entrepreneur, journalist & professional marketer certified by American Marketing Association (AMA), with over 12 years of progressive and diverse experience. Follow me on Twitter @mantasmalukas

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