Dubai: Virtual reality (VR) still remains a deeply individual and personal experience but as the industry evolves, there is a potential for VR to transcend isolated user experiences and for consumers to share the experience in the same environments as others, and to also influence the narrative in real time.
Following years of hype, VR actually becomes real this year and set to become the biggest trend in computing in 2016 as devices like HTC Vive, Sony’s PlayStation VR, Facebook’s Oculus Rift and Samsung’s Rink are expected to be launched this year.
And with Apple expected to enter the bandwagon, the industry is going to be competitive as film makers and travel industries are also planning to release VR contents.
Apple has created a new research unit dedicated to virtual reality and has been developing prototypes of a possible VR headset.
VR allows users to engage in a 360-degree 3D computer-simulated reality and immerse in places through videos or photos and allow users to interact by elevating live-event experiences such as concerts, indulge in adventure sports without the risks from the comfort of the couches.
Sensors in the headset track the user’s movements and change the user’s view accordingly. A VR version of scuba diving allows you to feel as if real fish are swimming toward you. If you look up, you see a realistically rendered sky. When you glance down, you are shown the ocean floor.
The soundtrack adjusts accordingly, enhancing the perception of being elsewhere. All other things being equal, the higher the screen resolution, and the faster the screen refresh, the more convincing the simulation.
As with many technologies, the notion of virtual reality is decades old, but its commercial realisation has been subject to the sometimes slow pace of technological progress.
More processing power is also necessary so that synchronisation between the user moving their head and the picture being adjusted is as near-simultaneous as possible. It is only recently that screen and processor technology have improved in terms of price and performance such that VR is commercially viable, albeit still at high price points for the full featured solution.
Users can experience the effect with Google cardboard for $10 or Samsung Gear VR available in the market for Dh399.
At the recently held Consumer Electronics Show in Las Vegas, many companies showcased their latest advancements in VR devices.
Deloitte Global predicts that virtual reality (VR) will have its first billion dollar year in 2016, with about $700 million in hardware sales, and the remainder from content.
About 2.5 million VR headsets and 10 million game copies are expected to be sold this year. Majority of the spending on VR is likely to be by core users rather than casual gamers. This means that while anyone with a smartphone could try a variant of VR, the majority of VR’s revenues in 2016 will likely be driven by tens of millions of users rather than billions of users.
But according to market research firm TrendForce, the total value of the virtual reality market — including hardware and software — will reach $6.7 billion in 2016 and will skyrocket to $70 billion in 2020.
“While in 2016, virtual reality is expected to reach a major milestone―becoming a one billion dollar market — in the long term, VR is likely to struggle to reach the scale or ubiquity of the smartphone, PC or the television set,” said Emmanuel Durou, Technology, Media and Telecommunications Consulting Partner at Deloitte Middle East.
This untapped potential is likely to unleash a wave of applications that would have been unimaginable before the arrival of this relatively nascent technology. The software aspect of VR has created an ecosystem of companies that are developing virtual environments, creating and adapting content that previously only existed in two dimensions.
“However, as the technology required to provide a total immersive experience improves, wider global adoption may ensue.”
VR is likely to have multiple applications, both consumer and enterprise, in the longer term, but in 2016 “we expect the vast majority of commercial activity to focus on video games. We would expect the majority of spending on VR to be by core rather than casual gamers,” Durou said.
While anyone with a smartphone could try out a variant of VR, the majority of VR’s revenues in 2016 will likely be driven by a base of tens of millions of core gamers rather than the hundreds of millions of occasional console or PC gamers, or the billions who play casual games.
Zaid Selman, assistant director for transaction services and financial advisory at Deloitte, said that the Middle East is one of the fastest growing and most promising regions for VR, both for gaming and enterprise applications.
Countries such as the UAE, Bahrain and Saudi Arabia have seen consumers adopt head-mounted displays (HMD), an integral component of many VR applications for gaming and corporate use.
“With high disposable income, a growing young population and increased demand for leisure activities, the gaming industry has experienced rapid growth in this region, with VR following suit,” he said.
There are likely to be two main types of VR device in 2016 — full feature and mobile.
The former incorporates high resolution screens and will cost about $350-$500 (with prices at the start of the year possibly being higher), and Deloitte estimates between 1—1.75 million sales in 2016, with volumes depending heavily on the initial price.
“We expect the addressable market for games consoles as of the end of 2016 to be at least 30 million units, and high-end PCs at about seven million units worldwide. We also expect that most users of full feature VR would already own the latest generation console or a high-end PC. Otherwise, a full feature VR experience would require at least $300 additional spending on a console or $1,000 for a suitably equipped PC,” Durou said.
‘Mobile VR’ incorporates a high-end smartphone’s screen into a special case, enabling the headset to fit more-or-less snugly on the user’s head. This is likely to cost from about $100, and Deloitte forecast that at least half a million units will be sold in 2016.
Mobile VR requires smartphones with large, high resolution screens, ideally with greater than 400 pixels per inch (PPI) resolution, which is higher than that for the average premium smartphone.
“We expect that VR-ready smartphones will cost from $750 and up but that most purchasers of mobile VR will already be owners of a suitable device.”
Both types of VR would provide a high quality VR experience, with the calibre of full feature VR being noticeably superior, at least in 2016 and out to 2020. The processor and pixel density requirements require a lot of power, with plug in power being ideal.
As for VR content, Durou expects most revenue generated to come from games sales, with titles sold at between $5 and $40, generating over $300 million. Many of the apps created for smartphones are likely to be available for under $10 or free, with the latter serving primarily as marketing tools.
