The future of the VR industry – opportunities and what’s missing

Posted by Patricia | May 14, 2017
The future of virtual reality in Australia

The Research Institute Telsyte estimates that by 2021 25% of all Australian households (which meanst almost 2.5 million households) will have an immersive VR device at home. More and more Australian startup and companies are getting involved in VR. Take a look at the vibrant Australian Virtual Reality Ecosystem 2017 map. It also seems that multiple hurdles might prevent VR from growing here in Australia along with global threats. Is there a future for VR in Australia at all? The VR experts Scott O’Brien – HumenseUrsula Lane-Mullins – ACME VirtualEddie Cranswick – Relax VRLecky Lao – VR CornerMichela Ledwidge – Mod ProductionsNathan Beattie – AVRNBen Wong and Charbel ZeaiterAcademyXIAdam Halley-Prinable – a VR Developer, Patrick CatanzaritiDevDiner predict the below cornerstones for the local VR industry in 5 years from now:

1. An Incredibly Strong VR Community

“Hopefully, it’ll be booming with talented people creating great experiences and showing the world how it’s done. I think Australia has the potential to do great things, we’ve got a huge community of people interested in VR, so it’s just a matter of getting that community to take action and really get involved in shaping the future”, desires Patrick. “Incredibly strong VR agencies, talented universities/colleges with great VR learning opportunities” – this is how Patrick’s ideal Australian future would look like.

2. Early Adopters and Global Test Market for VR

Many interviewees think that augmented reality (AR) and mixed reality (MR) will have a huge impact on the VR market. Although the way of perceiving VR is different for the user, the technology is similar. According to Patrick, AR will be a “massive part of the VR ecosystem and Australia will be a great early adopter. We’ve tended to be early adopters in a few areas of tech at least, like contactless credit card payments. If Australian businesses and institutions can find the convenient day to day uses of AR, I could see it spreading like wildfire here really quickly”.

3. High Adoption Rate

In Australia, Scott sees “some parallels with the adoption of smartphones, because we were the number one pretty much in the world for smartphone adoption”. He adds that “it took 5 years for smartphones to get above 50% adoption and I think it will be around the same for AR and VR. Some of that will be driven by what people are doing at their workplace because there will be many jobs where you won’t be skilled enough to work without the glasses.” In his opinion, there are several ways VR could quickly gain an above 50% adoption: wind shield displays, experiences for fitness and runners as well as programs for training at the workplace could enhance the penetration. According to Scott, VR gaming will only be interesting for a small percentage of users and that people will adapt augmented reality without even knowing that it is augmented reality like Pokemon GO and Snapchat filters. Even though the majority probably don’t know the specific term of AR and MR, Pokemon GO has been downloaded more than 100 million times and achieved great success with an estimated revenue of $USD500 million. One of the three countries the game got launched in was Australia besides New Zealand and the U.S.

4. Will Virtual Reality Go Down?

In general, the experts are in a very optimistic mindset when it comes to forecasting the future of VR in Australia. However, it could also end abruptly fears Adam and “end up the same way the games industry in Australia has – small-fry, little things only, nobody cares because it is the Australian tradition”. In 2015 the last “AAA studio”, the larger budgeted video game studios of Australia closed due to high operating costs.

5. AR & MR as Massive Part of the VR Ecosystem

Ursula says, “I think right now what seems bigger here is 360° video production. There are a lot of traditional television productions or film production companies – it’s a natural move to get into 360° VR production.” According to her, in 5 years time, we will be well familiar with mobile VR and AR and that we will see MR and VR surpass VR. This is in line with current revenue forecasts stating that AR will pass VR with $90 billion ($AUD 116 billion) by 2020.
Regarding commercialisation, Scott assumes that there will be a short-term shift – “I think the split commercial wise is 50% (360°), 25%(VR), 25%(AR), but [in 2017] it’s almost going even among the three.” The reason for this is due to trend lines from overseas and maturity of the buyers, he says. In Hollywood people are talking about AR/VR and not that that much about flat-screen like 360° anymore.
In 5 years virtual reality devices and apps might not even be used anymore in Australia imagines Michela. Instead, they will melt together: “There may not be a VR industry as such, but rather an MR industry where AR and VR functionality as we know it today is part-and-parcel of newer devices supporting a variety of usage modes.” She also adds that early adopters will probably move on to newer concepts such as responsive websites supporting web AR and VR. Last year, Asus announced to release a phone that is capable of supporting both AR and VR in late 2017, which will be a great combination of the two worlds.

6. VR-aided Professions

Additional to stronger AR and MR penetration, entire professions might form synergies with VR like artists or designers. Eddie Cranswick from NowVR is convinced that “everybody will be wearing a form of AR/VR – every single person” and that it will overcome the phone. His vision is to see entire realities created where people can walk through art environments for example.

7. Completely New Ways of Advertisement

Charbel from AcademyXI also thinks that traditional and current advertisement won’t continue to exist. “Where will the ads go? “he questions and states: “Marketing doesn’t work anymore, it’s all about pure experiences as an entire alternative world is being created and therefore companies need to be in that world.” As a result, Ben from AcademyXI thinks that in 5 years “every big company will need to have an internal VR lab” and that we will see a lot of traditional agencies shifting fast and transforming to VR.”

8. Australia -The Place for VR Game Competitions

“In 2016, most content was created by startups, because they do things really quick”, says Lecky. In the future, he expects that e-sports will be big, therefore he is targeting VR game competitions. There have been already plenty of PC games like Serious Sam or EVE: Valkyrie created by game studios for VR. Creating a high-end game in VR requires extra development time as existing computer games can’t simply be transferred to VR.

It seems like the future of VR in Australia looks quite vibrant and offers a wide spectrum for new businesses. Here are 6 opportunities for products and solutions that have a lot of potential.

1. Large, Quick and Wireless Data Transfer

A solution for wirelessly transmitting large amounts of data is Lecky’s dream. He wants to see more high resolution and high-end devices, which uses currently a large amount of data. Further, he is looking for cable-less headsets for a more immersive customer experience.

2. Capture of Humans

The capture and display of humans is where Scott sees potential – which he is currently working on. He also stresses that the lack of analytical feedback hasn’t been covered deeply yet. It will be important for VR creators to make data-driven decisions for improvements through their experiences as well as for advertisers who would like to track their campaigns and impact.

3. VR Data Visualisation

Similar to Scott, Michela says, “VR industry is missing data science applications. Lots of talk about how immersive data visualisation can be an asset, but very little to show for it so far”. There’s apparently still a lot of potential for VR in that field.

4. Multiple Platform VR Development Plug-in

In terms of product potential relating to VR, Adam would love to see a unifying plugin for seamless development across platforms: “If somebody manages to make a plugin which makes developing easy for both the HTC Vive and the Oculus Rift at the same time, combine the two together so that you don’t need two different projects as they both function pretty similarly. […]What’s missing from big businesses as far as I can tell is transparency, open source, letting everybody help, making everything compatible with everything. It’s not profitable for these businesses to give everybody what they want, you have to drip feed it to them. So it’ll never happen. But what they need to do is unify, combine all their efforts and stop this petty sort of competition.”

5. Industry Cohesion and Standards Between Devices

Apart from these products, cohesion in the industry is missing, which goes along with the siloed ecosystems that Patrick mentioned. “The industry isn’t working together as much as it should. Interoperability just isn’t there like it should be. One of the things I love about WebVR is that it’s a standard being worked on by Google, Mozilla, Samsung, Oculus and the web community. It’s open. They are working together to build something that will be compatible with all their devices.” It might seem idealistic but would accelerate the development as people and companies would learn from each other, instead of competing.
On the other hand, exclusivity slows down the development as well as the customer adoption because people have less choice. Big suppliers started to negotiate exclusive rights with developers which are counterproductive for a young market. “Oculus started funding game developers who are making VR games already and said, ‘we will give you X amount of money if you make this game exclusively work for Oculus Rift and not work for Vive specific,” Adam says. “Just recently Oculus, Google, Valve and OSVR have started creating a set of standards between devices which simplifies to build experiences for every device,” says Ursula.

6. Learning, Failing, and Succeeding

As VR is fairly new, the right environment needs to be created as well as the right content so that the user can relate and see the potential. “Learning, failing, succeeding and then setting up workshops for corporates to learn the technology in a safe environment is crucial where they are not embarrassed in front of other people. Even CIOs and CTOs are getting embarrassed trying AR and VR sometimes and they are the top people. We need spaces and places for CIO’s and CTO’s to feel comfortable.”

Eddie appeals to aspiring VR founders to release their inner child: “I think it’s important for entrepreneurs to start thinking out of the box in VR, instead of creating the routine. Start thinking about what’s the future, the next kind of big thing coming in VR.”

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