Virtual reality is one of the hottest tech buzzwords of the year, but it’s hardly a new concept. An article in The New York Times last year noted that virtual reality “is a dream that dates to at least 1968.”
But VR is definitely gaining momentum; a recent report shows the market is expected to grow at an compound annual growth rate of more than 15% from 2013 to 2018, and is expected to top $1 billion by the end of that date range.
Gaming and entertainment are the two most obvious and arguably mainstream applications of virtual technology — as evidenced by this week’s news cycle. Headlines began swirling Monday morning upon the announcement that Disney (DIS) led a $65-million investment into virtual reality startup Jaunt, with the goal of bringing “live-action shows, movies and sports to the emerging medium,” as The Los Angeles Times reported.
There is plenty of virtual reality chatter as it relates to the technology’s broader potential too, though — including applications in retail and healthcare, to name a few. Let’s take a closer look at the Disney news, and several other ways you can put money behind the growing virtual reality market.
Virtual Reality Stocks: Disney (DIS)
Once again, Disney (DIS) is the latest name to make a sizable virtual reality push as one of three investors to put millions behind Jaunt. And with several virtual reality headsets slated to go on sale in the coming months, it makes sense that the company would be ramping up its efforts to get content into them.
Disney stock barely budged on the virtual reality news, but the investment could help further diversify the company down the line.
As we’ve mentioned before, one of the most compelling aspects of DIS stock — which has gained 15% over the past 52 weeks while the broader market sits in the red — is the fact that it already boasts impressive diversification thanks to movies, television, theme parks, merchandise and much more.
While being part of a $65 million funding round is a drop in the bucket for a company worth hundreds of billions, it is notable considering it makes Jaunt the highest-funded VR startup out there.
Virtual Reality Stocks: Facebook (FB)
When it comes to making virtual reality deals, though, Facebook (FB) was quite the trend-setter. The company made a huge splash with its $2 billion purchase of Oculus VR last year.
According to Facebook CEO Mark Zuckerberg, though, Oculus is about more than just the virtual reality headset.
“This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures,” Zuckerberg posted on the social media site, adding: “These are just some of the potential uses.”
Oculus is just one of several purchases Facebook stock made related to VR, too. Plus, shares have already been chugging along in recent years — up 20% in the past 12 months — making it a nice mix of an established tech business and ongoing innovator.
Virtual Reality Stocks: Apple (AAPL)
We see a similar story with Apple (AAPL), although this tech behemoth has been moving sideways and facing Wall Street skepticism lately.
Regardless, Piper Jaffray’s Gene Munster strongly believes Apple is stealthily entering this up-and-coming market. If that’s true, the move could mean AAPL returning to the level of innovation many say is now lacking from the one-time darling.
Two acquisitions form the crux of this theory: Apple spent “$32 million in March to acquire the engineering team at Metaio, a software company with dozens of virtual reality patents,” and also recently bought PrimeSense for $345 million — a company whose “engineers are best known for designing the first motion sensors for Microsoft’s Xbox Kinect.”
Add those numbers up and it puts the head-turning Disney investment to shame — although it still doesn’t come close to the pricetag of Oculus.
Virtual Reality Stocks: Google (GOOGL)
It’s called Google Cardboard and the consumer VR offering lets users buy head-mounted viewer for their Androird smartphones for under $25.
Sure, it’s made of cardboard. But you get what you pay for. In fact, if you don’t want to pay at all, you can actually download Google Cardboard instructions for free and make your own!
Of course, it’s hard to see a cardboard product actually moving Google stock — especially considering the company’s diversification. But Cardboard is the kind of low-end disruption that could make VR technology widely popular and accessible, bidding the market up to the point that even snagging the lowest-end slice could be a big deal.
Virtual Reality Stocks: Sony (SNE)
Sony (SNE), which came roaring back to the tune of 44% gains over the last year, is also a virtual reality play thanks to its PlayStation console.
Plans for a new headset — called ‘Project Morpheus’ — were originally announced last year, with a general release date slated for early 2016.
Most recently, the company made headlines when it was announced that the headset will “cost the same as a new console.” If virtual reality indeed becomes an indispensible part of the gaming experience, this headstart will certainly help Sony stock.
Experts agree. Jon Fisher — CEO of CrowdOptic and the only Google Glass partner with patents — told me: “Sony has a real lead that people aren’t talking about — including the most issued patents in the AR space — representing years of work and a strategic advantage over its peers.”
Virtual Reality Stocks: 3D Systems (DDD)
It’s no secret that 3D printing stocks have been struggling, but, as I mentioned recently, there remains plenty of potential once companies make the pivot from a consumer focus to an enterprise focus.
And in case 3D printing isn’t enough innovation for you, 3D Systems (DDD) is bringing virtual reality into the fold, with both technologies helping in the medical space.
As Fisher put it: “The medical industry — including physician training — is perhaps the most promising application set so far.”
More specifically, 3D Systems recently introduced the very first virtual reality robotic prostatectomy simulation training.
Other Ways to Invest in Virtual Reality
While the public markets are the most obvious (and safest) way to invest in the virtual reality mega-trend, CNBC did recently point out a recent new option that came up thanks to the JOBS Act.
As Ari Levy described when the news broke: “a new Securities and Exchange Commission rule enables companies like Virtuix, which makes a suite of VR products, to raise capital from the Main Street crowd.”
As he added, this is far more risky than buying stock in an established company like Apple or even Sony, which have established businesses on top of plenty of liquidity. But if you want to take a little more of a flyer and have a little more room for potential upside, you can take your cash straight to a VR startup.
Alyssa Oursler is based in San Francisco and writes about technology, investing, gender and entrepreneurship. Her work has appeared on Forbes, Business Insider, MSN Money and more. You can follow her on Twitter here or check out her personal site here. As of this writing, Alyssa Oursler was long FB and AAPL.
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