2016: The Year Virtual Reality Shifted Toward Reality

2016: The Year Virtual Reality Shifted Toward Reality

2016: The Year Virtual Reality Shifted Toward Reality

2016: The Year Virtual Reality Shifted Toward Reality

I attended VRX in San Francisco a couple of weeks ago. This business-oriented event was well-attended for a local event (in string of international events). Big sponsors, including Intel and AMD brought experiences to the floor, and top-notch speakers discussed business and entertainment applications. I spoke on a panel focused on the social impact and ethics of VR. Demos and expectations abounded. Shouldn’t we be further along in 2016, the “year of VR?” What 2016 actually turned into,  “2016: The Year Virtual Reality Shifted Toward Reality.”

Yet here we are, at the end of “the year of VR,” and it is being reported that virtual assistants Amazon Echo and Google Home, have won the holiday buying season [see Virtual assistants expected to top virtual reality in holiday sales].

VR remains a powerful tool for visualizing the overwhelming data we collect, and creating stories and experiences that can entertain, educate and offer insight. But as good as it is when you’re in it, the experience of getting into it it remains clunky. Even Samsung GearVR, which offers the best of the basic experiences, requires the removal of a phone from its case before it will work. If you own an Otterbox or other hyper-protective case, is VR really good enough to remove the case all of the time? Google Daydream’s design appears similar, in the the mobile VR experience forces phone owner to shift how they use their devices to engage in VR.

Issues and Observations

Wires and spotters. It proves very difficult to become a hermit with a VR system, especially the HTC Vive. Trade show after trade show I watch the slow march through the VR demo as people outfit and orient attendees, and then turn into spotters, helping guide the experience and making sure those in the demo don’t trip over their tethers. So far perhaps the most social aspect of VR is getting into and out of a Vive experience. If VR doesn’t become a one-person mobile experience, it will keep its market numbers low. 2017 may well see, probably toward year-end and into the 2018 CES season, more and better mobile solutions that don’t require so much fuss.

Too many headsets for too few good experiences. As Google Cardboard brought “VR” to the masses, it offered up a model of low interaction and lack of positional tracking that was very easy to replicated. Dozens of companies started making headsets. Cardboard made it clear that VR technology lived in the smartphone, any smartphone—so any headset with a pair of lenses could do virtual reality duty.  I have stopped tracking these headset makers, and will probably not spend much time at CES 2017 looking for them, though I’m sure they won’t be hard to find. Despite 2016 being “the year of VR” no consensus developed around control or launching for these low-end experiences.

VR at this level remains the wild wild west of VR development with app developers and content developing mostly delivering low-end experiences for minimal hardware. The Oculus experience in GearVR offers one model, the “cardboard” experience another. Neither is very good a delivering engaging experiences, personalizing recommendations, or searching for content. Plenty of room exists for VR launcher models and new stores. The lack of content makes all existing launchers and stores vulnerable. The Apple app store dominates because the platform attracted developers and the app store was THE path to the content. VR needs content and a better path. The two need to co-evolve, and when a good one arrives, it will likely displace existing players.

The other experience downside: no must-use daily VR experience. Would you spend $800 for a smartphone that you only looked at once or twice a week? The answer: no.

VR needs content and a better path. The two need to co-evolve, and when a good one arrives, it will likely displace existing players.

Prices for PCs plummet. VR hardware remains at a premium. With the release of the Oculus $200 Touch controllers, the Rift now hits the same entry-level cost as an HTC Vive. Lower-priced graphics cards from AMD and Nvidia, however, bring down the total entry-level to a more reasonable amount. Promotions bring systems in at the $1,000 which is not price prohibitive for the existing PC market.

2016: The Year Virtual Reality Shifted Toward Reality
Alienware Area 51 and HTC Vive from Dell

Forecasts. The money side of VR keeps encouraging reports with very little useful information about future forecasts, which I contend had little or no chance of being anywhere near correct so early in a market. Superdata, for instance, guessed in January the market would sit at $5.1 billion. By April, it was targeting $2.9. Of course, IDC, Superdata and others continue to provide big numbers in the out years, but these are as likely to be wrong as the number for 2016. And no one knows if they are wrong on the upside or downside.

As I always say about forecasts, “you can’t be wrong today.”  The question also becomes how many of the units remain in play after acquisition. I was in Best Buy today, and there were stacks of drones behind the customer service counter as I dropped off some expired electronics for recycling. Content will drive usage. A “healthy” VR hardware market will only stay healthy if early adopters use their systems and become word of mouth advocates for the technology.

The Wearable Problem. People get contact lenses for a reason. They don’t want to wear glasses. AR and VR both assume people will want to put on headsets of some sort. Even the lightest headsets of the future will still be glasses that require people to wear them (yes, prototype contact lenses also exist, but they offer the same challenge to glassed-people as glasses do for the unglassed). That people already choose not to wear glasses will likely leave some outside of the facial wearable market. Google Glass and the glass-hole phenomenon proved a spontaneous and emergent meme. Any new consumer facial wear will likely rekindle the negative social aspects of looking through people, and not paying attention to the world around them.

Reinventing storytelling. VR breaks storytelling. VR places people inside the story and gives them narrative control. At least real VR does that. 360-video isn’t real VR, which is why it appeals to current filmmakers. They can craft stories where the interesting stuff takes place in one area, and they can guide the participant by the virtual nose hairs along the narrative path. In real VR worlds of complex immersion, the participant may decide what lies behind them is more interesting than what lies before them. This will lead to fully immersive stories where the creatives craft all aspects of the visual and narrative experience or let it emerge as they shoot fiction against the real world. Or not, and we’ll see if people think traditional storytelling in 360 is worth the time to put on a headset.

Consider this: As two characters talk on a park bench, you flip around and watch a boat dock and offload its passengers. No reason why not. In a traditional film, no one would see the boat. In VR, everyone could see the boat, and the choice of what to watch falls to the participant, not the director.  If you took a film studies class, or hold a film studies degree, or make films or television, VR is coming for your theories with a chainsaw.

Analysis and Serious Insights

2016 was a year of talking about VR among people interested in VR. The community aware of VR didn’t jump in and buy as quickly as vendors hoped, by approximately half. And that meant that many of the software investments faced soft sales, as the forecasts they based their forecasts on trickled down the wishful thinking. But VR also showed itself to be a powerful tool for educations and for businesses, with applications not just demonstrated but used in real-world situations.

But as VR progress marches on, management issues like those found at Oculus and Leap Motion portend rifts in the founding members of the industry—rifts in structure, governance, positioning, innovation, and regulation.

The VR market needs to learn from IBM. I recently attended IBM Watson World, which focused on some pretty big assertions for the Watson platform. But as IBM demoed features from a black box, the large number of partners delivered credibility by demonstrating that they too could make Watson do things. HTC has created a $10 billion fund to help drive the VR market. The multi-firm effort called the VR Venture Capital Alliance with the aim of “working tirelessly to ensure that the VR startups today get the resources they need, so that they can grow into the industry titans of tomorrow.”

2016: The Year Virtual Reality Shifted Toward Reality
Daydream, via Google

But as IBM demonstrated, start-ups aren’t enough. VR needs established vendors to adopt the technology as transformative within the markets they already serve. Yes, VR may be able to create net new markets, but it will prove itself through enhanced applications within existing markets. That means any company that creates or brokers spatial data should be courted by HTC and Oculus to find a way to bring their data into VR’s visualization frameworks. Looks for start-ups to merge, and even more to be snapped up by firms looking to bring VR in as a differentiator, much as some of the expert system firms from the 90s were transformed into captive business process engines after they were acquired.

 VR needs established vendors to adopt the technology as transformative within the markets they already serve. Yes, VR may be able to create net new markets, but it will prove itself through enhanced applications within existing markets.

The real trick then will be to create infrastructure level technology that allows developers, and eventually consumers, in realtime, to tap into the repositories of 3D data to build the world they want to build, or to have those built by others rendered for them by bringing in components from these libraries (think of something like HTML for 3D where there is a description of a world but the models are just called, not embedded).

VR’s future remains promising. We hyped VR in 2016, and in 2017 it will take a long deep breath in order to figure out what it needs to be, and how it will get to the next level of its evolution. This will not be another VR resurgence that dies. Data has become too important. Big data needs VR as much as VR needs big data. Big data will drive AI, and it will drive visualizations, not just for business intelligence, but for things and places. Big data will create an analog for the world that will be able to be touched and manipulated, experimented with, and experienced in new ways. An analog best virtualized in VR and seen through AR when appropriate (in AR the world gets in the way of visualizing things the way they could be, VR doesn’t have that problem).

Big data needs VR as much as VR needs big data.

I look forward to the turbulent and exciting VR & AR developments that will take place in 2017. I look forward to surprises. I encourage you to seek surprise too. Put down those fanciful forecasts, put on a headset and experience something—and if you work for a business that lives in the world of big data, especially spacial big data, figure out how VR brings new value to your customers. Just do those two things in 2017 and see how they reshape your world view.

The following articles provide some recent insight on VR & AR solutions from others watching the VR market:

How virtual reality could help Congress understand the issues, The Hill

The Most Exciting Uses of Virtual Reality Right Now, Architectural Digest

Five Ways To Incorporate Virtual Reality Into Your Marketing Campaign, Forbes

Second Chances: How Virtual Reality Could Be used To Rehabilitate Convicted Criminals, UploadVR

How virtual reality could be used to save lives, Nextgov

Next Stop, Mars! Virtual Reality Takes Students to Red Planet, CBSLocal

Virtual Reality And Immersive Experiences As A Business Strategy, Holmesreport

Daniel W. Rasmus

Daniel W. Rasmus, Founder and Principal Analyst of Serious Insights, is an internationally recognized speaker on the future of work and education. He is the author of several books, including Listening to the Future and Management by Design.


    comments user

    Virtual Reality Social

    I found this article very insightful. Virtual reality has brought a revolutionary change in all mainstream areas of life experience. Thank you for this article!

    comments user

    Avinash Singh

    Interesting blog, good information given about how virtual reality is shifted towards reality since 2016 and how it is effectual. Thanks for sharing the blog with us.

    comments user


    Tons of different ways to check out VR. Some of the best VR is now available in arcades and specifically VR arcades like http://vearcade.com – as more of these mainstream locations open, the more accessible it will be to non-tech people.

    comments user

    Merb Ganzon

    VR is constantly growing. With the current market for it and the gaming/health potentials, we may see this lead the charge towards the future. This 2017, new leaps on interactive VR has been made by these startups:

    comments user


    Great thought about virtual reality importance in future, it gives me a positive sign about my virtual reality business your explanation about virtual reality helps me to boost my business production… Thank You.. http://speedvr.co.uk

    comments user


    I agree with your point regarding virtual reality. VR requirements are increasing day by day in area of life experience like medical, education, technology visualization.

    comments user

    Frode Hansen

    I think that with a little patience we will see virtual reality grow into something beautiful. I know some people look at this as if it was just a fad that will pass over time.
    But i sincerely hope and believe that VR will be the future.. We just need to improve the tech, and bring quality content out to the people..

      comments user

      Daniel W. Rasmus

      I agree. My experiences have been good, but with mostly demo software on the market, the anticipate rush from last year didn’t materialize. I think HTC and Facebook need to do more to grow the community, and they need to do more industry partnerships to build a B2B need. Neither of those companies is as good as Microsoft, Cisco or IBM at building ecosystems. I think they need to build that expertise quickly.

        comments user

        Frode Hansen

        Yeah, i know there are a lot of tech demos out there.. And many of them are really good.. But i think AAA developers are holding back until more HMDs (customers) become available.. I am currently enjoying my easily frightened ass in PSVR playing Resident Evil 7 (Oh god) and i have already spent more hours playing re7 in that headset than i did when Age of conan or Star wars the old republic.. We need more games like this..

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