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Driven By Enterprise Applications, Virtual Reality On Track To Grow In 2018

vr headset graphic via Vladimir Belochkin noun project

By | January 5, 2018 |

As we enter the third year of VR, the industry will look to grow its adoption beyond technology and video game enthusiasts to include a more mainstream audience. Enterprise VR will be a major driver for the industry, which may lead to stronger consumer adoption in the coming months. The road to growth will include less expensive and more portable hardware, backed by a broad library of compelling content.

Enterprise To Drive Growth

Stephanie Llamas, SuperData VP of research and strategy, told AListDaily that enterprise will continue growing at a rapid pace, which will help communicate VR’s value. Over $4 billion was invested in VR business applications in 2017 alone, much of which came from R&D.

“The companies looking for solutions are also getting headsets on a whole group of people that might never have otherwise had access to them,” said Llamas. “There are also already a lot of lessons learned from consumer products that have translated into elements of successful use cases.”

“Virtual reality will continue to change the computing landscape with consumers and businesses alike in 2018,” Tony Parisi, global head of VR/AR strategy at Unity Technologies, said in agreement. “With VR investments only increasing, more industries across the board will be developing not only exciting consumer VR experiences but practical business applications as well. With enterprise VR moving from proof-of-concept to deployment, fields like automotive, architecture, creative and others will use VR to create immersive user applications that will change the way things are done.”

On the consumer side, Llamas predicts that VR revenues will increase to $7.2 billion, over twice what 2017 brought in, largely thanks to device penetration and new content that entices a more mainstream audience.

“Already, we are seeing Hollywood, AAA publishers and big-name theme parks get involved, and that will keep increasing,” said Llamas. “Also, China is booming with promise. In November 2017 alone, Xiaomi announced its Mi VR headset has sold 1.2 devices, a massive VR theme park is opening in Guiyang, and HTC Vive’s unveiling of their new premium standalone VR headset, the Vive Focus, to be released in China.”

“VR is in the trough of disillusionment, which is completely natural and expected for every tech cycle,” said Maureen Fan, CEO at Baobab Studios, which makes VR films. “Believers like us and the platforms will do heavy lifting to create the content and make the headsets more accessible to take VR to the mainstream. Narrative creators will experiment even more with interactivity. As new companies enter the market, headset price points will drop, and more creators will experiment with both VR and AR.”

Frank Azor, VP and GM at Alienware, gaming and XPS at Dell, said that the Alienware brand remains committed to supporting VR. He points to how Alienware made all its computers VR capable in 2016, then reduced the price points for some of its systems in 2017 in addition to introducing the Dell Gaming brand.

“You can get a VR-ready notebook for $899. That’s disruptive,” said Azor. “I think by the end of 2018, those prices will probably come down one or two hundred dollars further. We’re committed, and it’s not a question of ‘if’ for us, it’s a question of ‘when.’ When does VR become as mainstream and popular as the internet, smartphones and tablets have become? I don’t know that answer to that, but we think that’s going to happen, and we want to help it happen by doing everything we know how and can.”

VR Is On Course

“In many ways, VR is right where it should be,” said Parisi. “Historically, when you look back, enterprise and business are the first to adopt new technologies because they have the means, resources and problems to solve. We’re seeing that now with VR now across medical, training, entertainment and more. Now that we have some untethered all-in-one VR devices at lower price points, I expect to see a lift this holiday season and the growth trend continue in 2018.”

“In many ways, VR is right where it should be.” — Tony Parisi, global head of VR/AR strategy at Unity Technologies

“I think the headset makers and content developers are doing a great job, with a lot of companies both big and small investing in VR to move the industry forward,” Azor said. “The only way VR will die is if Dell, Oculus, HTC, Valve and content providers stop investing in it. If one of those companies stop, it all starts to crumble unless someone comes in to fill that space.”

Parisi also noted that mass adoption always comes down to compelling content and access to affordable devices. Llamas agreed, stating that VR still needs a “killer app” to draw consumers in by offering a high value proposition—convincing audiences to pick up headsets—followed by more accessibly priced and easier to use VR headsets.

Lower priced wireless VR headsets such as Oculus Go, which is expected to release later this year, may have a major impact on the industry. However, Llamas said that the devices need to offer quality experiences, otherwise they will end up hindering the growth of VR.

“If they do not provide experiences that do not impress consumers, this could pollute consumer expectations for the industry as a whole,” Llamas explained. “Whatever entry point we use to get consumers inside headsets needs to be strong, otherwise they will have a long lasting negative impression that is far more difficult to dispel than if they had none at all. But I think in the end, the response will be positive.”

Both Fan and Parisi remain optimistic about the device’s potential, and they both emphasize content as the key.

“We are excited that Oculus Go will introduce VR to a new group of consumers who are attracted to the lower price point and all-in=one native VR wireless device,” said Fan. It all comes down to having great content to attract consumers, however.”

“I think these devices will have a huge impact on driving consumer adoption of VR, and the proliferation of untethered, all-in-one VR devices like these can only help move us closer to the promise of VR,” Parisi added.

Oculus isn’t the only company developing wireless VR headsets. The HTC Vive Focus was announced in November, but release plans are currently limited to China. Additionally, hardware companies including Dell, Lenovo, Acer and others partnered Microsoft for its Windows Mixed Reality program, with each creating their own relatively low-cost and portable headset.

But even with these devices entering the market, Azor affirmed that Dell isn’t looking to disrupt the VR industry with its Dell Visor headset.

“I’ve always said clearly, speaking with HTC, Oculus and other headset providers, that we’re not in the VR headset business. That is not a key or core strategy of ours right now,” said Azor. “Microsoft came to us and said that they were doing a VR headset and gave us an opportunity to build one that could marry our machines better than a third-party headset, and we said ok. It’s just another product offering, and we continue to have strong partnerships with Oculus and HTC.”