You probably don't have a virtual reality headset. In that case, you might be wondering why "VR" has been the buzzword for "hot, new, possibly-a-fad tech" the last couple of years, occasionally serving as an easy tech punch line now that hoverboards are finally dead. VR is even showing up as a major plot point in the new seasons of House of Cardsand HBO's Silicon Valley, even though most of you out there haven't even tried it yet.
The more curious among you have probably noted hearing one of the following comments in the last 12 months:
"Like 3D movies, regular people just aren't that interested in VR."
"Oculus failing at Best Buy is proof VR is doomed as a mainstream platform."
"Gaming is the only viable future for VR as we know it."
These are all generally sensible and appropriately conservative comments I've heard in recent months from VR skeptics. But according to the people making the biggest bets on the new technology, those comments are as incorporeal as the virtual objects populating VR. Or, in English: bullshit.
Here's why.
SEE ALSO:How I lost the first national VR gaming tournament, but saw the future of esportsFirst, let's start with the obvious. Hollywood blockbuster directors like Iron Man's Jon Favreau and The Martian's Ridley Scott have both publicly embraced virtual reality as the next storytelling medium with dedicated VR projects and studio ventures. The producers of The Walking Deadjust announced a series of VR games based on the hit TV series. And according to some estimates, about $2.3 billion was invested in VR and augmented realty (AR) in 2016 alone.
What all this Hollywood, TV, and investment activity means is that you'll soon be deluged with VR marketing campaigns everywhere you look, even if you currently have zero interest in VR and have never strapped on a VR headset, which, based on my own experience covering the space, seems to be the norm for most people.
So what the hell is going on here? Why is media chatter about VR seemingly on the rise while actual user adoption of VR still fairly minuscule compared to something like, say, smartphones. Or even smartwatches.
At least part of the answer was revealed a few days ago via a report from PricewaterhouseCoopers' (PwC) annual Global Entertainment and Media Outlook, which contained a surprisingly optimistic forecast for VR over the course of the next four years.
Not only does report predict that VR revenue will reach $15 billion across 10 markets (U.S., Japan, China, South Korea, the UK, France, Germany, Spain, Russia, and Italy) by 2021, but the report also claims that VR will add nearly the same revenue as TV advertising during this period.
How? According to PwC, VR video will account for the majority of VR growth in the next few years as the platform, led primarily by mobile VR headset solutions. Ok, that sounds great for the Hollywood studios investing in VR, but with few mobile VR headsets visible on the streets of most major cities, and Samsung recently touting roughly 5 million Gear VRs sold (a good, but not earth-shattering number), what is driving the cash-fueled bets from so many that VR will go mainstream in the next 24 to 48 months?
"We're in a weird place right now with VR because all the players are not aligned ... The winners will be some part of the ecosystem that steps ups and collaborates to see how the different elements of these VR experiences come together."
"We're in a weird place right now with VR because all the players are not aligned," says PwC's Russell Sapienza when I ask why the firm is so bullish on VR video in particular, even though we've yet to see a major hit from the immersive video space. "What we're bullish about is that companies investing in VR will eventually find cohesion with one another. The winners will be some part of the ecosystem that steps up and collaborates to see how the different elements of these VR experiences come together to make something cool."
As for how that excitement around VR will transcend entertainment business players and actually reach currently uninterested consumers in the mainstream, Sapienza explains: "We expect to see campaigns from traditional networks [like Netflix and Hulu] and new VR content right holders to build awareness among consumers regarding the value-added experiences that VR can bring to a video moment or experience."
That sounds promising for the future, but what about right now? Since neither Oculus nor HTC Vive have revealed user numbers, what real indications do we have that VR hasn't already flopped?
For starters, it turns out that a February report that indicated flagging sales of the Oculus Rift at Best Buy stores, including a claim that 200 of what the report called Best Buy "VR pop-ups" had been shuttered due to lack of consumer interest, wasn’t entirely accurate. "[Oculus Rift] space in stores remained the same regardless of product demos, as did the continuation of selling the headset and touch controllers in stores and online," a Best Buy spokesperson told me, while pointing out that the only thing that had been reduced were one-on-one product demos in some stores located in smaller cities. "We have dedicated virtual reality departments in more than 700 of our stores, each with an Oculus Rift presence."
This matches my own experience. During a recent visit to a Best Buy store in Manhattan just a couple of weeks ago, when I asked an employee working in the dedicated Oculus section of the store why the Oculus-branded display was still in place (despite reports to the contrary), he told me that he knew of no change related to Oculus Rift set-ups at Best Buy and even volunteered that (anecdotally) sales of the VR headset had increased month-over-month since it was first introduced into the store (Best Buy's official spokesperson would not disclose official sales numbers for the Rift).
"We continue to be excited about virtual reality, as are our customers, whether they’re using a headset connected to a PC or a smartphone,” said Best Buy's vice president of computing and virtual reality. "In addition to the great devices already available, we look forward to more products, content, and price points joining the space to create even more possibilities for consumers."
SEE ALSO:Hulu VR app lets you watch shows in a virtual living room with your virtual friendsAnd while PwC is predicting that VR video will comprise nearly 60 percent of VR content in the next few years, VR gaming is gaining traction as well. A Sony spokesperson confirmed to me that its PlayStation VR headset has sold over one million units, and a recent Microsoft-hosted VR esports event in New York garnered nearly one million viewers on Twitch, leading to the launch of a VR esports league.
Looking ahead, VR activity is likely to ramp up in coming months as high-end, wireless VR headsets begin to make their way into the market and location-based venues like Imax VR continue to roll out new spaces in major cities.
However, major challenges around high prices, competing software platforms, and a general lack of consumer familiarity with VR still remain and could dampen all the optimistic forecasts and investments looking to push us into a new world of immersive entertainment in coming years. But that's fairly normal for new tech taking its first baby steps into the mainstream consciousness. The real make-or-break test will come from the creators of these virtual experiences.
"The future tends to repeat itself. What we had pre-iPhone was a burst of creativity and it took a while for all the pieces of the ecosystem to come together," says Sapienza. "You will eventually have two or three killer apps, those breakthrough experiences where a consumer will say, 'I want that.' But if you don’t take their breath away, you’ll never get them back. And in fact, they’ll resent you for it, because you’ve wasted their time and money."
TopicsAugmented RealityEsportsGamingOculusVirtual Reality
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