In the mid 20th century, prognosticators foresaw a near-future where ordinary people would traverse the skies in flying cars and jetpacks.
That future never came, but something similar occurred in the middle of the last decade: tech pundits and industry boosters told us that hundreds of millions of people around the globe would soon be donning virtual reality goggles to play games, watch 360-degree videos and live sporting events, remotely interact with friends and relatives as if they were in the same room, and tour art museums, historical landmarks and far-off lands from the comfort of their couches.
“Reality Check,” the new 21-page special report from Variety Intelligence Platform (VIP), explores the hype machine behind virtual and augmented reality, and how investors, particularly in the entertainment space, may have jumped the gun too soon and projected outlandish expectations onto a medium that still has plenty of significant, unexplored potential.
The initial wave of investments in VR and AR following Facebook’s acquisition of start-up Oculus VR in 2014 was a seemingly great sign for the gaming and tech spaces, with up to an estimated $2.3 billion in funding for VR and AR companies in 2016 (per Digi-Capital).
But something happened on the way to VR and AR’s happy Hollywood ending.
The first wave of consumer VR headsets was greeted with underwhelming sales and complaints about eye fatigue, motion-induced nausea, blurry visuals, and a dearth of quality content. When AR smart glasses hit the market, the results were similarly disappointing, with price tags too high for the average consumer and entertainment applications that clearly weren’t ready for prime time.
By the late 2010s, it looked like virtual reality might join flying cars on the ash heap of tech’s broken promises, but the success of the Oculus Quest, released in 2019, is a rejuvenating sign of VR’s commercial potential when the customer experience is prioritized.
However, the arrival of the COVID-19 pandemic in 2020 has spelled trouble for the industry, with consumers tightening their pockets and worldwide location-based VR outlets shutting down out of necessity.
As this report reveals, the future of VR may still shine bright and glossy, but the time for whimsical fantasizing is over, as this future won’t be exactly what we envisioned, it won’t necessarily wear a headset, and it certainly won’t unfold across the timetable we were hoping for.
Read on to learn about:
Our breakdown of which players in the VR/AR space captured the most initial enthusiasm during the mid-2010s funding rush, and where those companies stand now
Walkthroughs of the various VR headset types, and a year-by-year timeline of product releases, sales figures and forecasts from 2016-2020
COVID-19's impact on location-based VR, and how the pandemic stands to impact current VR/AR forecasts going forward