Virtual and augmented reality have been all the talk the past year and I find myself…along with investors pondering – are they even real? I understand that it is tough to understand the vision for VR without experiencing it. This technology is especially difficult for all of us to grasp because it has to be delivered one a one-on-one basis.
Hardware
There is actually a high volume and variety of VR headsets in production that range from the basic Google Cardboard to Gear VR, along with Chinese competitors like Oculus, HTC Vive and PlayStation VR. On the AR side, there is Magic Leap, DAQRI and HoloLens among some others. There will most likely be a monopoly in this category, while there are also supporting technologies like eye-tracking and haptic feedback expanding as well.
Content
This past year, we saw headset companies make huge investments in niche VR content producer to drive mainstream consumer adoption beyond gaming. Media companies and Hollywood studios are even jumping into VR content. VR producers are even getting overwhelmed and forced to outsource content creation to visual effects studios like ILM and Weta Digital.
Until there are tools to democratize content creation, content will remain in the hands of niche players that can’t meet the demand. Over time, this will change – media companies will bring VR content creation capabilities in-house. For now, VR producers are maximizing their long-term value by turning themselves into distribution companies and developing their own IP.
Software
Software enables tools and apps for content creation and discovery – just like in the PC and mobile eras. In the next few years, as headsets come to market, it will be the VR and AR software that will create the most value.
Investors in AR and VR are going to be those who are looking for a transformative opportunity that cannot be displaced by something that is incrementally better. To find the right opportunities within VR and AR, one must understand where this ecosystem is going and be able to identify the technologies and teams that will advance the industry.
Time travel, teleportation and immortality will be within our reach with VR and AR – as well as many other things that we have only imagined. I am very excited to watch VR and AR pioneer the next computing era.
What do you know about VR and AR? Are you just excited as I am?
Advisor Abbate 