VR Comeback: Companies to Watch
As so much of our world and work shift to the digital realm in the wake of COVID-19, companies across all sectors and industries are beginning to think differently about the ways in which they could and should be leveraging new technologies to mitigate the economic impact of social isolation and create new opportunities online.
At the top of their list of technologies to explore? Virtual and augmented reality – known collectively as extended reality – which many believe have finally reached the crucial crux of hardware and software sophistication to fast-track their ascent towards mass adoption.
And the numbers back it up. The IDC predicts that worldwide spending on augmented and virtual reality will reach $18.8 billion in 2020 – a 78.5% increase over the amount spent in 2019. Moreover, those investments are expected to shift away from the traditional consumer space and find new, creative uses in the enterprise realm, clearing the path for non-traditional players to establish themselves as industry trailblazers.
So what do economic developers need to understand about the VR industry to move ahead of the line when the opportunity comes knocking? Which sectors are showing signs of significant and rapid growth thanks to the newfound accessibility of this bleeding-edge technology? Here are a few of the trends to look out for in 2020.
The gaming industry is losing its monopoly
Though extended reality (XR) may have gotten its foothold in the gaming industry – think Occulus Rift and Pokemon Go – it seems the initial wave of excitement at this new immersive form of storytelling might be dying down. Back in 2018, an XR industry report by Eloqua found that 50% of industry professionals had plans to work with the gaming industry within the next 12 months. A year later, that number had dropped to 33.3%.
There are multiple reasons that could explain their waning interest: lower hardware adoption rates than expected, the difficulty in creating immersive content with enough cross-over potential to seduce casual gamers, low engagement rates in players that may only play a game for a few weeks before losing interest. Either way, XR experts are increasingly looking elsewhere for opportunities to make their case on the potential power of this budding technology – and their eyes are settling on the corporate world.
XR is going corporate
As XR capabilities evolve alongside other key computing technologies such as 5G – which would finally enable processing speeds capable of seamlessly hosting VR games directly in the Cloud without any added latency – enterprise development is steadily surpassing all forms of consumer-facing development. A 2020 Industry report found that 73% of surveyed XR technology and content suppliers are shifting their focus to enterprise solutions, while less than half of respondents are working on consumer-facing products or solutions.
And with enterprise users seeing quick and significant results, that trend is likely to stick throughout 2020 – 93% of enterprise users have already noticed the positive impact of VR on their bottom line. But one hurdle still remains on the pathway to mass adoption in the corporate space: the cost and clunkiness of VR hardware.
All eyes are on hardware
As with any new technology, VR’s growth has been shaped by an underlying chicken-and-egg challenge: content creators need powerful yet intuitive hardware to produce immersive experiences, while hardware developers need the influx of cash and interest that come with a breakaway hit.
“If you think you kind of understand what’s going on with that tech today, you probably don’t. We’re still in the middle of landing the airplane of all these new devices.”Philip Rosedale, cofounder of High Fidelity
In the past, VR goggles have been notoriously heavy, uncomfortable and tethered to their PCs by a collection of clunky wires. That’s to say nothing of the price, which could run you upwards of $800. In fact, a 2019 survey found that 29% of businesses see cost as the biggest hurdle in integrating VR within their companies.
Consumer and enterprise users have also struggled with compatibility, finding that the silos and limitations between different platforms make it hard to justify the hefty costs of adoption. All that is set to change in the months and years to come, with AR and VR headset sales expected to surpass 30 million units per year by 2023. Today’s $200 fully portable Oculus Go, for example, can now travel free of any wires or PC, requiring only a mobile app and WiFi to pull users into a parallel world. And the competition is set to get fierce: Microsoft, Facebook, Amazon and Google have all thrown their hats in the ring. Apple is even expected to release its own combined AR/VR headset by 2021. All in all, the hardware market is expected to amass revenues of up to $10B USD in 2022 alone.
Surprising industries are leading the way
Though the hype may have diminished in the gaming industry, numbers show that countless other sectors are excitedly ready to take the lead. Here are just a few that will undoubtedly create countless opportunities for development and growth.
VR is set to transform the educational space with remote learning, scalable corporate training, immersive learning scenarios and powerful simulations that could dramatically improve the quality of training in high-risk sectors such as medicine, policing, and security. By some accounts, the VR market in education could grow by USD $6.34B by 2024.
While the manufacturing sector remains a powerful economic driver for many communities, the costs and risks of scaling and training skilled workers can limit growth, making it a perfect candidate for XR technologies. Experts believe XR could also dramatically reduce the time spent by engineers, technicians and maintenance workers referring to manual guides or looking up information. Analysts forecast that the manufacturing and construction industries alone will spend $35B USD on these technologies in 2023.
From helping people deal with phobias and anxiety, to simulating rare and complicated surgeries, there’s no doubt that healthcare will win big with XR technologies. The global market for AR and VR in the health industry is expected to reach $10.82B USD by 2025.
COVID-19 might usher XR into the big leagues
If the VR industry has struggled to gain traction and reach mass adoption, some think the coronavirus might accelerate growth and be the extra nudge companies need to go from passive curiosity to active exploration of the technology. A Perkins Coie survey found that 49% of businesses have already been considering leveraging VR to simulate real-world training conditions. In times of social isolation, the technology might be just what they need to help employees sharpen or develop their skills.
XR technologies are also being seen as a potential solution to the crumbling events and conference industry. PredictHQ has estimated over $1B USD in direct economic losses from the cancellation of major tech conferences alone. Organizers are scrambling to find ways to create engaging and immersive experiences that can be enjoyed from the comfort of home.
These trends, alongside the increasing need for alternative solutions to classroom education, at-home entertainment and social connectivity are sure to change the VR landscape for years to come.
Want to know which companies you should be keeping an eye on as VR technology unlocks new opportunities across all sectors and industries? Learn more about these 15 companies:
- Surgical Theater
- Reaction VR Sports
- Immersive VR Education
- Félix & Paul studios
- Red Pill
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