Virtual reality has had many false dawns. Frequently touted as the next big thing, it is still most commonly associated with hard-core, geeky gamers. But times may be changing not just for virtual reality but for its close associate, augmented reality. Already in use in hospitals, on training grounds and architects’ offices, mixed reality technology is expected to become as ubiquitous as smart phones over the next decade – with estimates that the market could be worth around $80 billion. And fast-acting businesses could reap considerable benefits.​

TECHNOLOGY

A cancer patient sits in a hospital in Sydney, enduring yet another gruelling, all-day chemotherapy session.

But she’s relaxed and smiling broadly – thanks to the magic of virtual reality (VR), she’s escaped the chemo ward and is instead fulfilling her lifelong ambition to walk the Great Wall of China.

In another ward, a frightened youngster soon to undergo surgery puts on a headset and is instantly soothed as he’s transported to the zoo to pet the koalas.

The traditional image of VR is that of goggle-wearing teenage gamers, tethered to their computers around the clock, enthusiastically mowing down the zombie hordes, waging intergalactic war or battling fantastical beasts on mystical islands.

But there’s much more to VR than playing games, as patients at the pioneering Chris O’Brien Lifehouse cancer hospital in Sydney have found, or children with autism in the UK, where the NHS is using an immersive VR room to help them overcome their phobias.

Beyond gaming

While gaming remains by far the largest market for VR and augmented reality (AR), the technology is increasingly being used in other areas, from healthcare, training and education to retail, real estate, architecture, urban planning and engineering.

With its opaque headsets, VR isolates users from the outside world, immersing them in an imaginary environment – or an exact digital replica of their real world. AR, by contrast, allows users to remain connected to the outside world via clear goggles or their smartphones, on which digital images are overlaid, typified by Nintendo’s hugely popular Pokémon Go game launched last year.

According to consultancy Deloitte, recent advances in AR and VR will completely change the way both consumers and businesses interact with technology.

The future is mixed

In its Tech Trends 2017 report, Deloitte notes that the potential for businesses to harness this mixed reality technology is a real cause for excitement, even though the consumer buzz remains focused on games and entertainment.

“Though it may be several years before mixed reality’s endgame materialises, the time to begin exploring this dynamic new world – and the digital assets it comprises – is now,” say Deloitte analysts Nelson Kunkel and Steve Soechtig.

In their vision of the factory floor of the future, they see smart goggles providing maintenance workers with metrics, instructions and remote support. Some colleagues will have goggles with cameras and motion sensors, on which assembly instructions will be overlaid and training given; others will be guided through the warehouse by their smart goggles.

All devices will be connected to a sophisticated data management system and, as a result, the effectiveness and engagement of workers will be dramatically enhanced, Deloitte says.

 

TECHNOLOGY

Reality

bytes

A cancer patient sits in a hospital in Sydney, enduring yet another gruelling, all-day chemotherapy session.

But she’s relaxed and smiling broadly – thanks to the magic of virtual reality (VR), she’s escaped the chemo ward and is instead fulfilling her lifelong ambition to walk the Great Wall of China.

In another ward, a frightened youngster soon to undergo surgery puts on a headset and is instantly soothed as he’s transported to the zoo to pet the koalas.

The traditional image of VR is that of goggle-wearing teenage gamers, tethered to their computers around the clock, enthusiastically mowing down the zombie hordes, waging intergalactic war or battling fantastical beasts on mystical islands.

But there’s much more to VR than playing games, as patients at the pioneering Chris O’Brien Lifehouse cancer hospital in Sydney have found, or children with autism in the UK, where the NHS is using an immersive VR room to help them overcome their phobias.

Beyond gaming

While gaming remains by far the largest market for VR and augmented reality (AR), the technology is increasingly being used in other areas, from healthcare, training and education to retail, real estate, architecture, urban planning and engineering.

With its opaque headsets, VR isolates users from the outside world, immersing them in an imaginary environment – or an exact digital replica of their real world. AR, by contrast, allows users to remain connected to the outside world via clear goggles or their smartphones, on which digital images are overlaid, typified by Nintendo’s hugely popular Pokémon Go game launched last year.

According to consultancy Deloitte, recent advances in AR and VR will completely change the way both consumers and businesses interact with technology.

The future is mixed

In its Tech Trends 2017 report, Deloitte notes that the potential for businesses to harness this mixed reality technology is a real cause for excitement, even though the consumer buzz remains focused on games and entertainment.

“Though it may be several years before mixed reality’s endgame materialises, the time to begin exploring this dynamic new world – and the digital assets it comprises – is now,” say Deloitte analysts Nelson Kunkel and Steve Soechtig.

In their vision of the factory floor of the future, they see smart goggles providing maintenance workers with metrics, instructions and remote support. Some colleagues will have goggles with cameras and motion sensors, on which assembly instructions will be overlaid and training given; others will be guided through the warehouse by their smart goggles.

All devices will be connected to a sophisticated data management system and, as a result, the effectiveness and engagement of workers will be dramatically enhanced, Deloitte says.

Transformative solutions

Analysts at Goldman Sachs also believe that business and public sector demand will play an increasingly important role in the VR world, as managing director Heather Bellini explains.

“We think this technology has the potential to transform how we interact with almost every industry today and we think it will be equally transformative from a consumer and enterprise perspective,” she says.

In a major report on the sector last year – Virtual and Augmented Reality: Understanding the race for the next computing platform – Goldman Sachs suggests that VR and AR have the potential to become the next big computing platform after the smartphone, “as transformative as when we used to see people walking around the streets… holding a big brick to their ear and talking to someone that we could not see on the other end”.

Goldman estimates that the mixed reality market will grow to around $80 billion by 2025. But, despite the huge hype that has surrounded VR – and the many billions of dollars poured into its development – it has consistently failed to fulfil expectations. 

Coming of age

The headsets are expensive and often unwieldy, and prolonged use can cause a form of seasickness, as the brain and body struggle to keep up with the 360-degree action of the virtual world in which the wearer is immersed. But a wave of technological advances could mean that VR is finally about to make the major breakthrough that has been promised for so long.

VR has been around in various forms since the 1950s. The first- ever headset – dubbed The Sword of Damocles – was created in the late 1960s but weighed so much it had to be suspended from the laboratory ceiling by a cable.

All about tech

There was a surge of interest in VR in the 1990s, when Nintendo launched its 3D video game console, Virtual Boy. But the technology failed to live up to the hype and consumers, disappointed with the poor graphics and low-quality games, eventually lost interest.

Looking ahead, there is still a chance that VR will once again fail to live up to its promise, remaining largely the preserve of gamers. But even in this delayed uptake scenario, Goldman Sachs believes the market will be worth around $23 billion by 2025. And if developers can overcome some of the current technical challenges that are preventing widespread adoption of the technology, such as poor battery life and limited mobility for users, that figure could surge to more than $180 billion. 

Enter Facebook

A defining moment came in 2014, when social media giant Facebook bought the US start-up Oculus Rift for $2 billion. Oculus Rift – oculus is Latin for eye and rift refers to the gap between the real and the virtual world – was one of the pioneers of VR although when Facebook bought it, the company had only a single prototype headset.

Unveiling his big bet on the technology, Facebook’s Mark Zuckerberg predicted: “One day… this kind of immersive, augmented reality will become a part of daily life for billions of people.

“Virtual reality was once the dream of science fiction. But the internet was also once a dream and so were computers and smartphones. The future is coming.

”That future has yet to arrive, however, and even the mighty Facebook has found the going tougher than it expected. In March this year, it was forced to slash the price of the Rift headset and Touch wireless controllers by 25 per cent, to $600, after disappointing sales. 

Europe VR landscape 

Historically, the US has led the way on technological development but Europe now has a burgeoning VR ecosystem, with a growing international impact. According to a survey by the Silicon Valley-based venture firm, The Venture Reality Fund, which tracks the AR and VR markets, there are some 300 start-ups in Europe developing the technology.

They include Swiss company MindMaze, whose mix of AR and VR technology is used to aid the recovery of stroke victims. The Lausanne-based company last year raised $100 million, the largest amount in one round by any European VR company.

No worries

Spain-based behavioural health technology company Psious is another European firm leading development in VR. Its platform is used by health professionals to treat anxiety disorders, fears and phobias and it is growing fast. 

More than half of the 300 companies tracked by The Venture Reality Fund are based in the UK, France, Germany and Sweden, with France taking the lead in Continental Europe. Pioneering names include CCP Games of Iceland, nDreams of the UK, Resolution Games of Sweden and VideoStitch and Giroptic of France.

As industries outside the core gaming market increasingly adopt the technology, so public awareness of VR is growing. And on the commercial front, the real estate and healthcare markets are expected to lead the way, along with retail.

Welcome to the revolution

Many would say that the internet has already transformed the retail sector. Now according to Deloitte, VR is poised to “revolutionise” the industry. 

“Consider, for example, ‘walking’ through a virtual cruise-ship cabin or hotel suite before booking it or immersing yourself in a virtual jewellery store where you try on necklaces that catch your eye,” the firm says. 

Retailers are already offering shoppers VR fitting rooms while furniture giant IKEA has been using AR technology for several years – customers download the app on their smartphones, take pictures of their rooms and then select items from the catalogue to see how they would look.

Feels so real

The streaming of live sporting events or concerts is also a potentially huge market for VR. Users will feel as though they are physically there and will even be able to choose a particular player or band member to follow, thus seeing the proceedings from their perspective.

In real estate, high-end companies such as Sotheby’s are already offering their cash-rich, time-poor clients virtual tours of luxury properties.

As they don their headsets and the real world fades away, the billionaire property buyers may feel a little uncomfortable. But the bricks they used to hold to their ears in the 1980s weren’t that comfortable either – and just look how they turned out 

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Goldman estimates that the mixed reality market will grow to around $80 billion by 2025 and if developers are able to overcome current technical challenges, that figure could surge to more than $180 billion”​

This technology has the potential to transform how we interact with almost every industry today and we think it will be equally transformative from a consumer and enterprise perspective”​

Consider, for example, ‘walking’ through a virtual cruise-ship cabin or hotel suite before booking”​

This technology has the potential to transform how we interact with almost every industry today and we think it will be equally transformative from a consumer and enterprise perspective”​

Goldman estimates that the mixed reality market will grow to around $80 billion by 2025 and if developers are able to overcome current technical challenges, that figure could surge to more than $180 billion”​

Consider, for example, ‘walking’ through a virtual cruise-ship cabin or hotel suite before booking”​

Transformative solutions

Analysts at Goldman Sachs also believe that business and public sector demand will play an increasingly important role in the VR world, as managing director Heather Bellini explains.

“We think this technology has the potential to transform how we interact with almost every industry today and we think it will be equally transformative from a consumer and enterprise perspective,” she says.

In a major report on the sector last year – Virtual and Augmented Reality: Understanding the race for the next computing platform – Goldman Sachs suggests that VR and AR have the potential to become the next big computing platform after the smartphone, “as transformative as when we used to see people walking around the streets… holding a big brick to their ear and talking to someone that we could not see on the other end”.

Goldman estimates that the mixed reality market will grow to around $80 billion by 2025. But, despite the huge hype that has surrounded VR – and the many billions of dollars poured into its development – it has consistently failed to fulfil expectations. 

Coming of age

The headsets are expensive and often unwieldy, and prolonged use can cause a form of seasickness, as the brain and body struggle to keep up with the 360-degree action of the virtual world in which the wearer is immersed. But a wave of technological advances could mean that VR is finally about to make the major breakthrough that has been promised for so long.

VR has been around in various forms since the 1950s. The first- ever headset – dubbed The Sword of Damocles – was created in the late 1960s but weighed so much it had to be suspended from the laboratory ceiling by a cable.

All about tech

There was a surge of interest in VR in the 1990s, when Nintendo launched its 3D video game console, Virtual Boy. But the technology failed to live up to the hype and consumers, disappointed with the poor graphics and low-quality games, eventually lost interest.

Looking ahead, there is still a chance that VR will once again fail to live up to its promise, remaining largely the preserve of gamers. But even in this delayed uptake scenario, Goldman Sachs believes the market will be worth around $23 billion by 2025. And if developers can overcome some of the current technical challenges that are preventing widespread adoption of the technology, such as poor battery life and limited mobility for users, that figure could surge to more than $180 billion. 

Enter Facebook

A defining moment came in 2014, when social media giant Facebook bought the US start-up Oculus Rift for $2 billion. Oculus Rift – oculus is Latin for eye and rift refers to the gap between the real and the virtual world – was one of the pioneers of VR although when Facebook bought it, the company had only a single prototype headset.

Unveiling his big bet on the technology, Facebook’s Mark Zuckerberg predicted: “One day… this kind of immersive, augmented reality will become a part of daily life for billions of people.

“Virtual reality was once the dream of science fiction. But the internet was also once a dream and so were computers and smartphones. The future is coming.

”That future has yet to arrive, however, and even the mighty Facebook has found the going tougher than it expected. In March this year, it was forced to slash the price of the Rift headset and Touch wireless controllers by 25 per cent, to $600, after disappointing sales. 

Europe VR landscape 

Historically, the US has led the way on technological development but Europe now has a burgeoning VR ecosystem, with a growing international impact. According to a survey by the Silicon Valley-based venture firm, The Venture Reality Fund, which tracks the AR and VR markets, there are some 300 start-ups in Europe developing the technology.

They include Swiss company MindMaze, whose mix of AR and VR technology is used to aid the recovery of stroke victims. The Lausanne-based company last year raised $100 million, the largest amount in one round by any European VR company.

No worries

Spain-based behavioural health technology company Psious is another European firm leading development in VR. Its platform is used by health professionals to treat anxiety disorders, fears and phobias and it is growing fast. 

More than half of the 300 companies tracked by The Venture Reality Fund are based in the UK, France, Germany and Sweden, with France taking the lead in Continental Europe. Pioneering names include CCP Games of Iceland, nDreams of the UK, Resolution Games of Sweden and VideoStitch and Giroptic of France.

As industries outside the core gaming market increasingly adopt the technology, so public awareness of VR is growing. And on the commercial front, the real estate and healthcare markets are expected to lead the way, along with retail.

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Bridgepoint  |  The Point  |  May 2017  |  Issue 31