Virtual Reality: What’s The Hold Up and What’s Next?

Virtual Reality: What’s The Hold Up and What’s Next?

10 years ago most of us probably thought that by now the latest technology in the world of home Virtual Reality (VR) gaming stations would have at least started to go mainstream. The first unwieldy headsets and VR ‘experience’ games had debuted at tech trade fairs and were popping up in malls or amusement arcades.

They weren’t especially good and often involved dinosaurs. Small children kind of liked them. But it was a start. In 10 years we’d all be spending our evenings playing playing Super Mario AS Super Mario. Or immersed in sophisticated VR versions of those role play books that were popular 30 years ago where your fate depended upon not choosing the wrong option from the multiple choice list and ending up in a warlock’s cauldron.

The non-gaming potential of VR was also tantalising. Professionals from surgeons to engineers and biochemists would see the effectiveness of their training lifted onto a whole new plane through VR. Almost real-life practice would replace theory and the learning curve of being an assistant for years.

But it hasn’t really happened for VR. 10 years later and VR headsets are less unwieldy, or are basically a balaclava with an iPhone fixed over the eye slit. It still mainly features at tech fairs and occasionally pops up in malls. Reasonably price home-use headsets are now commercially available but haven’t really caught on. The VR experiences still aren’t especially good and still often involve dinosaurs. Small children kind of like them.

But the big boys have moved into the space and Sony (Playstation), Facebook, Microsoft and HTC all offer VR technology, games and experiences. But sales of headsets are underwhelming, there has been no real hit game and it’s fair to say progress and commercial traction has been slow. There have been use cases in professional environments, particularly in medicine, but again, no real major breakthrough or traction that suggests mainstreaming is near.

VR still gets plenty of media coverage and there is a lot chatter around its ‘huge’ potential. Softbank’s huge tech-focused Vision Fund has poured hundreds of millions into Improbable, a VR start-up from London building an OS/platform (SpatilOS) for third parties to build virtual worlds on.

But how many of us have actually had a really impressive VR experience? How many of us know someone who owns a VR headset? And if we do, how many of us don’t consider them in the same bracket as ‘that guy’ who bought a Google Glass? VR, in many ways, seems like another of those hyped tech developments that generates a lot of noise but little progress.

What’s the Hold Up?

Why is that the case? What’s the hold up with VR and is there any imminent prospect of the bottleneck being blown open and the hugely fun and useful VR future we imagined a decade ago belatedly coming to pass?

VR Hardware

Perhaps the biggest cork in the VR bottleneck is the fact that it is a completely new technology platform. Early VR has tried, and not really succeeded, to integrate with existing technology platforms and operating systems – particularly smartphones. It’s understandable. It’s much easier to gain traction with a new technology if it can somehow be delivered through hardware that potential consumers already own. Hence simple VR headsets that strap an iPhone in front of the user’s eyes.

The problem is that ‘workaround’ hasn’t delivered the user experience we now demand. Consumers have become demanding and won’t embrace VR that isn’t delivered through an elegant piece of hardware built-for-purpose they want to own and are enthusiastic to put on.

As a technology, VR is far more complex than any existing technology platform we consume content through. Sight, sound and touch (eventually perhaps smell) all need to be stimulated for a VR experience to achieve the true immersion it needs to be to be really successful.

It’s a surmountable bottleneck as the technology is largely already in place to create elegantly designed headsets. As a TechCrunch article explains:

“We know how to miniaturise components, dissipate heat and transfer high volumes of data at short range. Intel, for example, is making major efforts to drive down transistor sizes, ramp up vision-sensing technologies and add artificial intelligence and 3D sound processing to create true VR experiences”.

Costs will eventually drop to the inflection point that will lead to mass VR adoption. Oculus (Facebook) and HoloLens (Microsoft) headsets are already reasonable iterations of VR hardware and will improve further. But there is also a chicken and egg dynamic at play in the hardware market. Companies will pour more resources into hardware once adoption rates increase and for adoption rates to increase hardware quality is a key component.

Standalone VR systems such as the Oculus Go that don’t work with a games console, PC or smartphone, which have or will be launched this year are also an important step. Next year Google, in partnership with Lenovo, is expected to launch a standalone Daydream VR headset.

VR Software-Focused Gaming and Simulation Studios

However, hardware is not the only component. Higher quality VR software is also key to creating the demand for hardware that will drive the competition necessary to improve quality and reduce costs. While professional VR experiences are part of that, a strong example is the company Tsunami VR that recently custom-built a VR simulation that employees at an energy company used to learn how to change a pneumatic drill component in 15 minutes compared to the usual 2-hour ‘reality’ session, it is inevitable that the gaming industry will lead the way.

The gaming sector is currently buoyant and generating rapidly growing revenues driven by the mobile-platform and rise of eSports. On the one hand, the industry’s current success could reduce the impetus to allocate the necessary focus and funding to a risky new platform like VR. On the other, the big companies are awash with cash and need to secure future revenue growth opportunities. The interest is clearly there with the immense value of a developed VR industry enough of a prize to provide motivation. Google (Owlchemy Labs) and Amazon (BodyLabs) have recently made significant VR-gaming acquisitions, as have other major tech companies. SEGA and Bandai have built a VR gaming investment fund with Fenox.

VR’s requirement for a seamless integration of visual, audio, motion and touch into one experience makes developing high quality games or other simulations time consuming and expensive. At this stage of adoption, the commercial model for doing so is shaky and would have to be seen as an ‘investment’. Which is why it is largely left to startups that have to raise investment capital to fund R&D. The big boys are waiting on the sidelines and will acquire the most promising along with their know-how when the time comes, while providing them with some working capital in the meanwhile. That is of course the natural course of development for any new technology but slows down the process.

However, the quality of VR games is improving. It will probably require a few breakout games unique to VR to really start driving adoption. A good parallel would be the success of Halo, exclusive to the Xbox, providing the stimulus for many gamers to buy an Xbox rather than, or as well as, a Playstation.

Cinematic VR

The other obvious commercially attractive environment for VR is as a cinematic experience and Hollywood’s wealth getting involved will be a game changer. However, to a greater extent than the big gaming studios, Hollywood is still waiting on the sidelines and will step in once tipping point is closer. A clue to the big film industry dragging its heels is how long it has taken Disney to make its move into the content streaming sector Netflix has been breaking ground in for over a decade now.

There are some cinematic VR frontrunners coming to market such as The Recall Abduction, a short 13-minute VR film interpretation of the Wesley Snipes thriller. John Travolta is heavily involved in creating VR film experiences, such as Speed Kills, though so far critically panned. The Recall Abduction creator Travis Cloyd has also made Distorted, another VR film, with John Cusack. Haven’t heard of any of them? Most people haven’t, illustrating the nascent stage of the industry,

Until cinemas are ready to invest in high quality VR headsets, which would require a run of high-quality and commercially successful VR movies, which require high quality VR headsets to be in cinemas to be financially viable, it is hard to see the tipping point. The breakthrough of Hollywood investing in high quality VR content will most likely come through personally-owned VR headsets. The first commercially successful VR cinematic productions will probably be content consumed at home. Once VR home cinema gains traction, cinema chains will take on the capital investment risk of investing in headsets and other hardware.

The Road Ahead for VR

Despite the bottlenecks slowing down the traction of VR’s development into a commercially attractive mass market technology, there is little serious concern that it will prove a false dawn and fade away. It is a question of when and how rather than if. Early stage VR investors are willing to take on the risk of being at the vanguard due to the huge size the market will undoubtedly reach after its inflection point has been passed. Many believe that VR will eventually be bigger than reality itself. Others that our ‘reality’ could even be someone else’s virtual reality…but that’s a whole different article for a slightly more ‘alternative’ online property than this website!

The new generation of reasonably-priced stand-alone VR gear may well accelerate adoption rates and boost content production. By 2026 the VR industry is tipped to be worth $36 billion (£28 billion). It is likely that it will take another few years before VR headsets become a regular feature in households. One catalyst such as a game coming out for one of the new Google, Facebook or Microsoft headsets that becomes the ‘must have’ Christmas present could be enough of a spark to ignite the market. A good example of this is how Atari’s first commercially successful games console proved to be the catalysts for the gaming industry. Once that happens money will flow into new content trying to repeat the trick and VR will come of age. VR shopping malls, eSports and business applications will quickly follow. Watch this space.

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