Billions of people are stuck at home and seek an escape. Life in quarantine is challenging, and virtual reality (VR) seems tailor-made for this moment.
For years, virtual reality struggled to achieve widespread consumer adoption. But now, the seismic changes reshaping every aspect of society—from the workplace to the health care system—create new opportunities for VR to have a transformative impact.
Virtual Reality Industry: 2012-Present
The sensorama, a 1962 machine using all five senses to simulate a Brooklyn motorcycle ride, was perhaps the first true “VR” experience. More recently, VR has grown in fits and starts, with Oculus’s 2012 announcement of the Rift, its 2014 acquisition by Facebook and the 2016-era devices from Playstation, HTC, and Samsung Gear VR.
Last year, Oculus released the Quest, the first $400 headset that delivered high-end VR experiences in an all-in-one device with no gaming computer required. US interest in the Quest during the 2019 holiday season exceeded that of any VR headset in the previous 10 years. Yet headset sales overall declined in 2019, and global supply chain disruptions have rendered would-be bestsellers like the Quest and the Valve Index frequently out-of-stock. Pent-up demand remains unmet.
What does this mean for the industry going forward?
Enterprise and Consumer VR: A Tale of Two Markets
As large, diversified tech giants like Facebook, Sony, and HTC all spend heavily to compete in the consumer market, VR-focused manufacturers, such as Varjo and Pico, have carved out growing market niches by building specific technical capabilities and targeting enterprise use cases.
The enterprise and consumer VR markets, while ultimately complementary, each have unique dynamics and are at different stages of maturity. For example, enterprises are adopting VR twice as fast as consumers.
Healthy competition between headset manufacturers, the customized solutions often demanded by enterprise customers, and general advances in computer vision are likely to lead to many varied and high-quality hardware options. These trends are enabling a growing industry of enterprise application developers and service providers to thrive.
Consumer VR a Landgrab Driven by Gaming
The consumer market for VR, on the other hand, is likely to result in increasingly blurry boundaries between large platforms and content developers in a struggle for users and user data.
For example, Oculus bought the developer of the #1 VR game, Beat Saber. Valve makes video games, headsets, and Steam—a gaming app store. Steam is an interesting success case in vertical integration; its number of monthly connected headsets has been following an exponential growth trend since 2016.
If this trend holds, gaming is likely to drive consumer VR growth for the immediate future. With the VR-compatible PS5 launching later this year, supply chains showing signs of recovery, and rumors of a Quest refresh coming soon, the 2020 holiday season will provide an important bellwether for the maturity of the consumer VR market.
Implications of Covid-19 on Enterprise VR in 2020
Covid-19 has forced rapid change across much of society. Our working, educational, and healthcare systems will never be the same, and there are several interesting experiments taking place—and opportunities being created—in these areas.
REMOTE WORK AND LEARNING
Zoom went from 10M users to 300M users in just a few months. This massive user growth has brought with it new use cases (e.g., virtual conferences), best practices (e.g., use the mute button liberally), and norms (e.g., virtual backgrounds seem to be widely acceptable now).
These experiences all involve some degree of visual processing and analysis. As our digital lives become increasingly 3D, it will be essential to ensure these experiences create a sense of presence that promotes the effective exchange of ideas and knowledge.
Creating a presence doesn’t necessarily require a headset. For example, this artificial window concept by Argodesign simulates working next to a colleague—right down to the eye contact—and VirBela is helping previously in-person conferences move to computer-based video game-like worlds.
Meanwhile, companies offering full spatial audio and 3D telepresence solutions, such as Spatial, are building experiences that allow you to participate from a computer as well as VR. These types of cross-platform experiences are likely to help ease users along the adoption curve.
The Affordable Care Act, which came after the 2008 financial crisis, oriented US healthcare more toward preventative, community-based care and encouraged the use of technology to create value. Covid-19 will likely accelerate these trends.
Home health is the fastest-growing sector of US healthcare. Amid growing concerns about safety measures at nursing homes and hospitals, many Americans are increasingly embracing community-based care when possible.
Government regulators are enabling this, expanding Medicare access to telehealth and releasing new guidance for digital health devices that treat psychiatric disorders. While the coronavirus precipitated these changes, they may (and should) remain long after the crisis is over.
If Covid-19 has made anything clear, it is this: the environment around us matters. What you see when you look around and where you spend your time profoundly affects how you feel.
Virtual reality enables us to create synthetic environments that evoke specific physiological and emotional reactions. With this power comes the potential to provide a new type of medical intervention for pain, anxiety, phobias, strokes, dementia and many more conditions.
Immersion will ultimately be viewed alongside drugs, devices, surgeries, and procedures as a standard tool in the medical toolbox.
Catalyzing New Opportunities for VR
Changing entrenched behaviors and habits is incredibly challenging, a dynamic that often hinders the adoption of potentially game-changing new technologies.
Now, with at least a third of the world’s population under some form of lockdown, coronavirus has forced widespread behavioral change. There has never been a greater need for technologies that can help us enhance limited physical environments. With virtual reality hardware advancing rapidly, the opportunity is ripe for transformative new applications to fill this need.