Clickbait headline much? Anyway … A new study about VR use in America leads me to an inference that’s entirely unsubstantiated but probably true, anyway. (Trigger warning, Sarcasm ahead, Also a kernel of truth)
The VR/AR Insights Consortium, a group that comprises representatives from the likes of Turner, Warner Bros, and the VR Society have released a report in conjunction with Magid the sheds light on consumer use of VR and its various applications. The study was based on results gathered from 2,000 U.S-based consumers. Its headline statistic showed that 22% of VR users have used Netflix VR at some point, compared with the next most popular app, Minecraft VR at 20%.
My eight year-old son plays Minecraft. His grandfather had never heard of it until a few weeks ago, and even then didn’t put the name “Minecraft” together with the game he’s watched his grandson play. Ergo, my sweeping generalization:
Minecraft is probably popular on VR because it’s very popular, period, kids are interested in new tech like VR, and Minecraft is available on the major VR platforms. So when a kid straps in and sees Minecraft advertised on the welcome deck of Gear VR or Vive or what have you, she wants to check it out.
Netflix is probably popular on VR for the exact same reasons, except applied to all ages. I’ll now stretch things a little to make my argument: Kids probably don’t stick around Netflix VR for long because the experience is passive and easily replicated outside of VR. Since VR isn’t as popular as smartphones and computers just yet, most households that have a VR rig probably only have one, but have multiple other Netflix-capable devices. So kids’ available VR time is probably scarcer than other available screen time, and they know better than to waste it watching videos they can watch later on the boring old iPad.
Ergo, they do other, more VR-specific stuff. Like Minecraft, which is a little overwhelming and mind-blowing in VR (at least the first few times you try it).
But grown-ups who try VR are less adventurous and (just to wrongly generalize a little more) more easily disoriented and made nauseous. So they stick to what they know: Reruns of Frankie and Grace made new again by the excitement of googles, earphones, and their choice of digitally rendered luxe media room backdrops.
Worldwide spending on virtual and augmented reality is expected to double each year through 2021, say the analysts at IDC, a market research firm based in Framingham, Massachusetts. According to their math, total spending will increase from $11.4 billion in 2017 to $215 billion in 2021, with a compound annual growth rate of 113.2 percent.
This absolutely echoes what I’ve been hearing. Barring a significant economic event that curtails global spending (which, frankly, is quite possible), the money that’s already flowing into AR and VR will only flow more readily over the next three to five years.
Consumer sales for things like headsets and games are currently the top driver of overall spending, followed by sales in the manufacturing and retail sectors. In the US, some of those sectors could ultimately overtake consumer sales by 2021.
Consumer interest in, and spending on, VR will climb steadily, but I don’t think headsets will be the new smartphone anytime soon. That said, expect more “consumer sales drive AR/VR growth!” headlines over the next few years as sales of AR-ready iPhones inform analysts’ reports. I’d argue that these numbers will be somewhat artificially inflated, as the percentage of consumers who buy new iPhones specifically for Augmented Reality applications will be rather low.
“Other segments like government, transportation, and education will utilize the transformative capabilities of these technologies,” said Marcus Torchia, research director of IDC Customer Insights & Analysis.
This is where the big, dull action will be. Microsoft is already building a healthy Hololens business in the enterprise. Nobody outside the enterprise talks about it because enterprise tech is “dull” and consumer tech is “sexy.” But serious money is being invested in practical innovations built on AR and XR (mixed reality) technologies, and big corporations are betting on those innovations paying dividends in the form of more efficient training, logistics, and business processes.
AR will generate lots of buzz over the next 12 months thanks to iOS 11 and ARKit. What consumers do with it after that remains to be seen. But the money will continue to flow into AR and XR for the enterprise, at least for another three to five years.
Hot on the heels of Apple announcing that native Augmented Reality is coming to, oh, half a billion or so iPhone users this Fall, people are throwing big numbers around in discussing AR’s potential to change the world (or get rich trying). To wit, VentureBeat, citing Digi-Captial’s Q1 2017 Mobile Augmented Reality report:
VB’s take is well worth reading, as it both explores and refutes the meaningful differences between “AR Hardware” and “AR Software.” The takeaway is that when it comes to forecasting augmented reality’s prospects, focusing on any sort of hardware vs software split is in many ways missing the point. The point is that between advances in “mobile AR hardware” (phones, mainly) and “mobile AR Software” (Facebook, Apple iOS, and Snap, mainly, in the U.S.; Tencent’s WeChat in China) AR is coming to a ton of pockets, and soon:
Mobile AR hardware from Apple, Samsung, Huawei and others could deliver an installed base over 400 million users by 2021, Facebook, Tencent, Apple, Snap and others could drive a mobile AR software user base in the hundreds of millions next year, and billions by 2021. Mobile AR software platforms could deliver over 4 times the number of users of dedicated mobile AR hardware.
And whether you’re focused on the software delivering AR experiences, the hardware that software runs on, or both, you’re looking at the same thing. That thing is a phone:
Mobile AR could become the dominant AR/VR market for the foreseeable future, as it solves the 5 major consumer challenges for AR (hero device, all-day battery life, mobile connectivity, app ecosystem, telco cross-subsidization). Together with backing from major global consumer platforms like Facebook, the inflection point for AR/VR might now be within sight.
It’s worth pointing out to you, the reader, that while I’ve been obsessed with mobile phones for nearly two decades now, covering AR (and VR) is a relatively new journey for me. So take this with a very big grain of salt as I learn more about the business side of the Reality Business, but I’m fixated on how Apple and Facebook will coexist in these new realities. Facebook’s Camera and AR Studio can thrive alongside Apple’s ARKit. But they could also compete fiercely with one another.
Saying the Reality Business (VR + AR) today is a lot like the cell phone business was before the first iPhone hit the scene is a good place to start thinking about the industry. The simile is apt, easy to understand, and largely true – at least as a baseline. In short, it’s early days. Some power players — Facebook, Google, Samsung, and arguably HTC, Microsoft and Snap — have emerged, but we’re still a long ways from critical mass.
Those of us old enough to remember things like “Treo,” “Windows Phone,” and “Symbian Series 60” know that Microsoft, Nokia, and Palm were once power players in the smartphone market. Then things changed, swiftly and for good. The first iPhone was launched in January of 2007, and went on sale that June. Though somewhat imperfect, this chart from Pew Research Center shows cell phone and smartphone adoption in the US in the years leading up to, and following, the first-gen iPhone.
Two things to note here:
Cell phone adoption in the US was around 75% when iPhone went on sale. Adoption had climbed steadily over the preceding five years, from 62% in October 2002. While the statistical rate of adoption didn’t spike in the years after iPhone, climbing “steadily” over the next five years to 89% in November 2012, it’s well worth noting that the closer adoption gets to 100%, the harder it is to win those percentage points. In other words, cell phones were already achieving critical mass in the US before iPhone. They became ubiquitous soon after.
Smartphone adoption wasn’t even being measured when the first iPhone launched. Geeks like me may have been deep into dissecting the differences between N73 and K790i, but the average Jane probably doesn’t even remember the “original iTunes phone,” Motorola’s ROKR E1, which debuted in 2005. In other words, smartphones didn’t go mainstream until after iPhone. Once they did, adoption came relatively quickly, rising from 35% to 77% in just five years.
By comparison, let’s look at AR/VR adoption in the US, using data from eMarketer. Note the following charts measure AR/VR usage, and not ownership of a headset or other purpose-specific device, as cell phone/smartphone adoption data shows. But the data’s good enough for our purposes. First, Augmented Reality adoption:
Two key points, quickly:
These are just projections, but growth from 30% to 54% over just four years is pretty impressive!
% change is already projected to decline. However, it’s worth mentioning the elephant in the room that’s likely not folded into these projections: Apple is on the record as having significant interest in AR. Should they make an AR-focused play, they’d immediately be leveraging an estimated 800 million active iPhone users worldwide. That could dramatically change these numbers in a hurry.
And next, VR usage:
Even more noteworthy than the AR projections, eMarketer shows virtual reality use in the US having doubled from 2016-17, and projected to more than double again by 2019. By then, almost half of the US population will experience VR content at least once per month (if these projections hold, which of course they won’t, at least not exactly). Looking only at user adoption and one firm’s projections, the current moment is reminiscent of the smartphone industry in the days leading up to the first iPhone unveiling on January 9, 2007. The early adopters have already landed, the underlying technologies are in place, and the stage is set for accelerated growth. A parallel may even be drawn between cellphones and AR, and smartphones and VR: Back then, cell phones were the “baseline experience” while smartphones required a bigger user investment in terms of both up-front purchase costs and ongoing time and resources devoted to learning to use the thing, paying for monthly data, and buying apps. Today, AR is relatively easily experienced by anyone with a modern Android or iPhone and enough interest to find and download an AR app. VR, on the other hand, requires that additional outlay of time and resources: For starters, you need a headset, even if it’s just a Google Cardboard that the New York Times sent you for free.
The Same, But Faster!
Even if eMarketer’s projections wind up erring on the optimistic side, which I think they will, a number of conditions are setting the stage for accelerated adoption of AR/VR as compared to smartphones. Though none should come as any surprise on their own, taken as a whole they paint a picture of how our increasingly technology- and phone-dependent culture has changed the nature of new business ventures in general, and is shaping the AR/VR industry, specifically:
Mobile is Everything
With apologies to William Carlos Williams, So much depends on a battery-powered, network-connected supercomputer tucked away in a young man’s pocket. Mobile phones are the computer of choice for today’s users, and mass adoption of AR/VR depends on advances in battery and network technologies in particular. Oculus and HTV Vive rigs tethered to desktop PCs are fine for today’s early adopters, but the masses will only get involved when hardware is truly mobile.
Apps Rule, For Better and For Worse
Back when BlackBerry and Windows Phone ruled the day, “apps” came on CD- and DVD-ROMs packaged in cardboard and cost upwards of $50-100 each. Now they’re purchased and downloaded with a tap on a touchscreen, and $9.99 is considered expensive. The ease with which developers can publish, and consumers can use, new software is accelerating the growth of new industries like never before. The whole, “Try that new app right now!” phenomenon didn’t really exist pre-iPhone. But how will the expense of producing quality VR content, in particular, coexist with consumer expectations shaped by App Stores?
Attention Spans Are Dead. Or Are They?
On the one hand, nobody reads any more and “fidget spinners” are being banned by schools across the land. On the other hand, gaming and eSports are thriving, and those titles demand hours and hours of devotion if you want a chance at “winning.” Is VR the next immersive consumer art form, or will it fall prey to blog-sized attention spans?
Headsets Are Lame, Sunglasses Are Cool, Contacts Are Even Better
Tech consumers have been trained to obsess over light and thin gadgets. A narrative already exists regarding, “Contact lenses that augment reality.” Google Glass got some play from early adopters, but not as much as Snap’s Spectacles, which don’t do as much but are infinitely cooler and less cumbersome. Is the “iPhone of AR/VR” destined to be the first device that offers real functionality in a form factor no more intrusive than the shades, specs, and contacts we’re already accustomed to? Or can standalone headsets like Gear VR and forthcoming Daydream models make some real inroads? See also: #1 above.
There’s much to dig into here, and we haven’t even touched upon the enterprise and B2B potential for AR/VR. Fodder for another post, for sure!
Fascinating overview of research into social difficulties in Autism, and the use of Virtual Reality in those efforts. Animated characters and VR headsets allow for a great level of control in research studies, including isolating and eliminating variables to get closer to the root of a problem. And the safe space afforded by simulations could lead to more people with Autism getting involved with the research itself.
As the researchers, Nathan Caruna and John Brock, wrote on Spectrum:
We need tests that allow us to precisely measure behavior in complex, reciprocal social interactions. To achieve this goal, we and others are investigating the use of virtual-reality technology as a tool for research and, potentially, therapy.
So far, so good – on several fronts:
Using these technologies, we have confirmed that problems with joint attention—the ability to coordinate with someone else so that you are both paying attention to the same thing—persist into adulthood. We’ve also gained important insights about the roots of these problems. We also hope that adults with autism can one day practice their social skills within specially designed virtual environments.
In our research so far, participants have interacted with a virtual character on a computer screen. The next step is to use fully immersive virtual-reality headsets to recreate more realistic social interactions, in which individuals must evaluate multiple social cues at once, including eye gaze, head orientation, hand gestures, speech and facial expressions.
We, among others, are also considering clinical applications of new immersive virtual-reality technologies. Virtual simulations could perhaps be used for social-skills training in which elements of a social interaction are introduced gradually. Virtual meeting spaces could also allow people with and without autism to interact in a safe and controlled environment that reduces anxiety and sensory overload.
The possibilities for VR in healthcare are just immense right now.