Augmented/Virtual Reality technologies have long been considered the next step in technological innovation. While augmented reality (AR) helps to overlay computer generated images on our real world, virtual reality (VR) helps to create a 3D environment that can be interacted with as well.
Both these technologies are intertwined but analysts observe that gradually it could bifurcate. However, at present, the hardware that is based on these technologies is struggling to find favor with the masses, primarily due to hefty prices.
Prices Slashed Massively
Last month, HTC slashed the price of Vive by $200 to generate consumer interest before the holiday season. Vive was originally priced at $799. In March, Facebook Inc (NASDAQ:FB) made a steep cut for its Oculus Rift headset. Price of VR headset Rift and Oculus Touch Motion controllers was slashed by $100 each. Again, the step was widely viewed as a measure to boost sales.
Rift was originally priced at $599, which has been a major deterrent for the device to gain mass adoption. Moreover, Rift has been so designed that it is compatible with only high-end PCs costing above $1K. Mainstream adoption of such heftily-priced gizmos will definitely be difficult.
Even Microsoft Corporation’s (NASDAQ:MSFT) $3000 priced HoloLens is mostly for developers with very little commercial use.
Is this the End of the Road for AR/VR?
Analysts dont believe so given the strong adoption of Sony Corp’s (NYSE:SNE) PS4 headset and Nintendo-Niantic’s super successful AR game, Pokémon Go. Sony’s PS4 headset success was driven by compatibility with a PS4 console and the relatively low price tag of $399. In June, the consumer electronics giant announced that it has sold over 60.4 million units of the console and over 1 million headsets.
Then, we all know how successful Pokémon Go was last year. Analysts have widely credited that the game’s AR aspect as critical to its success. Notably, Pokémon Go’s foundation was based on another AR game, Ingress, created by Niantic that compelled users to get out and interact with real world locations. Pokémon Go’s stupendous success put AR technology under the limelight.
Current Application Limited to Gaming
Nonetheless, it is but obvious that any technology at its nascent stage will take time to gain a toehold. Earlier this year, Facebook chief Mark Zuckerberg was quoted saying that though its VR efforts aren’t profitable now, he asked the investor community to be patient as the investments in VR will take some time (about 5- 10 years) to generate profits. The social-media giant has committed over $3 billion toward AR/VR research.
Per media reports, though at present VR application may be limited to gaming, it has the potential to evolve into the next computing platform but how it will evolve remains a matter of discussion.
Per ZDNet, apart from entertainment (gaming & film making), there are several other industries like healthcare and automotive, who are using these technologies. However, we do believe mainstream adoption will take some more time.
Nevertheless, growth projections are massive. According to market research firm IDC’s August report, quoted by Business Insider, total spending on AR/VR is expected to soar from $11.4 billion in 2017 to nearly $215 billion 2021, achieving a CAGR of 113.2%.
This strong spending has attracted tech behemoths, right from Facebook to Apple Inc. (NASDAQ:AAPL) to Alphabet Inc (NASDAQ:GOOGL) and Microsoft, directing ample resources to develop these technologies.