The Fuzzy Future of Virtual Reality and Augmented Reality

A person wears a white-and-black Sony PlayStation VR headset to play a video game during a launch event in Tokyo, Japan.
Photo: Kiyoshi Ota/Bloomberg/Getty Images

Virtual reality is having a moment, but the technology is still far from mainstream. Following the release of the HTC Vive and Oculus Rift in early 2016, headset sales quickly flattened once early adopters had purchased their gear. It seems the average customer isn’t as eager to pay US $600 for bulky goggles simply to peruse the rather limited catalogue of available VR content.

If more consumers can’t be persuaded of the value that VR could bring to their lives, an industry projected to breach a trillion dollars in sales by 2035 might flop. Faced with that possibility, NYC Media Lab welcomed virtual reality and augmented reality experts to Viacom last week for a daylong discussion about the future of these two budding technologies.

There was, not surprisingly, plenty of excitement about VR's potential among the crowd of creators, designers, entrepreneurs, and investors. There was also a healthy dose of realism about the state of the industry and the drawbacks of existing VR gear. “For VR to really work and succeed, it has to be so good that you want to put an ugly plastic thing on your face,” said David Liu, creative director for virtual reality at Viacom.

Though 2016 has been a breakthrough year for VR, very few people actually own a headset or are consuming VR on a regular basis. Hard numbers are difficult to come by, but recent reports suggest HTC has sold about 140,000 Vives since its launch in April 2016. For comparison, Apple sold roughly 444,000 iPhones per day in its most recent quarter.

When a panelist at the Viacom event asked the pro-VR crowd how many attendees had a headset at home, only a smattering raised a hand. Early demonstrations of AR have also struggled to find mass appeal. (Google Glass, anyone?)

Despite the slow start, insiders are more optimistic when they look ahead. Shawn Cheng, an investor with venture capital firm Vayner/RSE, said he expects VR to reach mainstream, which he defines as the point when roughly one-fourth to one-third of the population has a headset in their living room, in the last half of 2018.

On the 2016 Gartner Hype Cycle, an industry measure of technology readiness, virtual and augmented reality are expected to emerge from the “trough of disillusionment” and ascend the “slope of enlightenment” to achieve widespread adoption within five to 10 years. Meanwhile, machine learning, self-driving cars, and smart robots remain huddled around the “peak of inflated expectations.”

At the New York City event, content developers, tech investors, media executives, and entrepreneurs focused on expanding the amount of VR content available to customers while still delivering a high-quality experience that will convert first-time users into devoted fans.

Already, several experts said, too many VR startups and developers are putting out shoddy or nauseating demos, thereby shooting themselves—and potentially the whole industry—in the foot. Customers turned off by those demos may never return, leaving VR to go the way of 3-D TV.

“I see so much sub-par VR content out there and it infuriates me,” said Resh Sidhu, creative director for virtual reality at the design studio Framestore.

For newcomers, the pros offered some tips: Hire storytellers and user experience designers as early as possible, so they can shape a demo or product from the start with the customer in mind. Don’t produce footage with too many cuts or too much camera motion, which tend to make people sick. And use the “Why VR?” test, which goes like this: If there isn’t a compelling reason to produce a film or experience in VR, don’t do it.

Natacha Merritt, director of VR for WestSummit Capital, adds that startups in this highly-competitive space hoping to boost their chances of funding should recruit candidates that reflect the diversity of their potential users. Her firm, which counts only three female co-founders in a pipeline of 200 companies, has begun to prioritize meetings with female founders. “It’s a big red flag when I see a [presentation] screen with a board of 10 white males,” she said.

It’s a critical time for producers to win the hearts of new users, as VR spreads from the gaming world into places familiar to a much broader audience. Media companies including The New York Times and NBCUniversal are experimenting with VR films and documentaries, which is exactly the sort of high-quality content that VR insiders say the world needs to see.

“We want to find as many ways as possible to connect with our audiences and tell our stories,” said Kelly Alfieri, executive director for special projects at  The New York Times.

Compared to other sectors, media companies have been particularly aggressive about pursuing VR for storytelling and live event coverage from the technology’s early days. Since NYT VR launched a year ago, the group has produced 20 VR films. Two weeks ago, they announced a new project called Daily 360 that publishes a new 360-degree video every day.

To pull that off, Alfieri’s team sent 500 cameras to reporters around the world and asked them to start shooting. She admits that much of what they sent back at first was unusable, but says reporters’ skills have improved over time.

NBCUniversal, which owns The Weather Channel and E!, has produced over 40 VR and 360 degree video projects since 2014 and broadcasted 86 hours of VR footage during the 2016 Olympics. The company predicts VR will be “a significant revenue stream” over the next five years. Recently, Universal Studios Florida debuted an in-person VR experience themed around a haunted house for Halloween. For the 30-minute experience, users paid $50.

So far, most companies haven’t been able to demonstrate a strong financial return on their early VR experiments. At this stage, many clients are simply doing it for the PR buzz. Looking ahead, one panelist suggested VR startups might have more luck landing projects if they develop VR enterprise solutions, such as the 3-D modeling for architectural firms pitched by a startup named Geopipe or the 3-D medical imaging demonstrated by MediVis.

Other companies are refining the VR experience in different ways. Jim Preston of FOVE says his company’s eye-tracking feature, available in a Kickstarter-funded headset scheduled to ship in January 2017, will allow users to scroll and select items with a glance rather than reaching for a mouse or controller.

Eye-tracking can also make the VR experience more realistic, he says, by allowing foveated rendering, which fully renders images in a users’ direct line of sight and leaves the surroundings slightly blurred, similar to peripheral vision. This feature can also reduce the processing power required in a headset and improve battery life, which could make it easier to roll out wireless models.

However, there is a downside—eye tracking adds 8 milliseconds to motion-to-photon latency, or the time it takes to update a screen following a user’s movements. VR requires a motion-to-photon latency of under 20 ms to keep users from getting sick or disoriented, so an 8 ms delay would eat up nearly half of that time.

Every detail counts, because as more consumers encounter VR for the first time, these issues could mean the difference between someone who puts down a VR headset and never picks one back up, and someone who buys one for themselves and their loved ones.

Right now, it’s fair to say that the industry is still figuring out what types of VR content are worth producing and how to make money from these projects. As Brett Leary of Digitas described it, a lot of players have dipped their toes to into the water but few have taken the plunge. “There’s no shortage of really cool ideas but I think the dollars are still going to be kind of test-and-learn,” he said.

Then, once VR and AR have finally reached mass adoption, we can all start to looking forward to the next hyped tech, smart dust.

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