A close look at how virtual reality and its future provides a unique opportunity for different industries - from luxury to the corporate brands sector.
While the virtual reality industry is still experiencing some growing pains, it was extremely encouraging to see, or more accurately NOT see, VR anywhere on Gartner Research’s newest Hype Cycle curve which was published in August. It’s absence indicates a graduation from the Trough of Disillusionment, as it swiftly advances through the Slope of Enlightenment to the Plateau of Productivity just ahead. I recently had the opportunity to take a four corners tour of the US, attending a number of events that reinforced this distinction and revealed some specific and immediate needs that a maturing VR industry is well-positioned to solve.
At a luxury brand conference in New York, most of the talk was centered around the idea of creating a luxury ‘experience’ for customers. What does that look like? Luxury is high-end, not highly accessible (maybe even exclusive at times), high touch and one-of-a-kind. Luxury is the feeling of belonging to a small subset of people who have been let in on a secret the rest of the world either doesn’t have the means or the interest in pursuing.
VR fits into the luxury landscape like a tailor-made cashmere sweater. Whether it is worn everyday or not, it is a ‘must have’ in your wardrobe. What we have found is that luxury brands whose product or service is built around craftsmanship, lifestyle or heritage are especially suited to activate marketing campaigns in VR. We saw this earlier this year when we partnered with M Booth and Pixel Rain to produce The Macallan Experience at Grand Central Station and at private event for NY press and influencers. The scale of in-home headsets is not a problem when your focus is creating an exclusive, incredible, out-of-home experience that engages super-fans and influencers and contributes to the aspirational ethos associated with the brand.
Beyond the use of VR as a marketing tool for luxury brands, we have also found that luxury training experiences are ripe for disruption. Corporate development and training, no matter the industry, can be an unwieldy and costly proposition. However, in industries where ‘being there’ - wherever that may be - is key to truly understanding the value of the brand, virtual reality training stands out as an amazing, high-impact, cost-efficient solution. So much so that I am willing to predict that within the next five years VR training and development in the corporate and higher education sectors will be standard operating procedures.
Large global businesses who do not have virtual training modules in place will feel archaic and out of touch to their employees and recruitment candidates. The linear, 2D video trainings that we are used to today will be the fax machine of the future and become the hallmark of companies that struggle to keep up with the speed of progress.
I also believe that the ubiquity of VR interactions at work will drive increased adoption of the medium at home, similar to the way that the ubiquity of computer technology at work drove the adoption of personal computing throughout the 80’s and 90’s. Yes, the form factor of VR headsets still needs work but if the past five years is even the slightest indicator, the next five years will produce an exponentially better personal XR device that doesn’t cause our friends, family and co-workers to immediately pull out their cameras to capture how ridiculous we all look with this big, bulky, blinding brick strapped to our faces.
VRS made it pretty clear that the enterprise and higher education have emerged as the most immediate and consistent revenue sources for VR companies outside of gaming. Location-Based Entertainment (LBE) will be a big business for at least the next 5-10 years while people are still discovering the new technology. The hyper-reality experiences of THE VOID and the room-scale, multi-player games you find at arcades like IMAX provide a high-fidelity, highly-engaging experience that drags skeptics in and quickly converts them to VR evangelists.
Another interesting segment of the industry that is already seeing significant and growing revenue is VR live broadcasts. Oculus Venues has created a compelling application for social-enabled VR broadcasts that will only get better. While certainly not perfect and obviously in need of more compelling event-driven content, the experience of joining a group of friends or even strangers in a virtual stadium where you all have a front row seat to a shared experience - that in most cases lasts an hour or more - is definitely a big step forward for the medium as a whole. In my not-so-humble opinion, however, I think the producers of these broadcasts need to think of creative ways to augment the broadcasts with special feature overlays of either 2D streams or data feeds that are additive to the live experience. HMD viewers aren’t going to remain engaged unless the virtual experience offers a unique perspective that is different than attending in person.
Speaking of augmented, let’s talk for a second about AR. TC Sessions in LA split their focus between AR and VR this year. While the VR track focused on the breakout successes in enterprise, education and LBE there was something about the AR conversations that felt familiar. There was this quiet desperation. This bit of head-scratching about where to go next. How to monetize. What is the ‘killer app’. These same conversation were being had two years ago in the VR world. For this reason, I’m willing to make a bold and potentially unpopular prediction that AR is headed for the bottom of the Trough of Disillusionment in 2019. I think we will definitely see a lot of AR projects launched publicly throughout the year, but my guess is they will fall flat and certainly not live up to the inflated hype that surrounds AR at the moment. This time next year we will all be talking about how AR is dead and wonder what we were thinking for hyping it so much. Of course, it won’t actually be dead but that’s how this hype cycle thing goes, right?
On the other hard, as a high volume of low-cost, standalone headsets get stuffed into stockings this holiday season and with Oculus’ launch of the Quest in the spring we are about to witness a staggering growth opportunity for the VR industry over the next 24 months. Couple that with the extended deployment of 5G technology across the world and we will find ourselves in the path of totality where the sun and the moon align to create a spectacular moment in time. Before long VR and AR will converge into a single device, coupled with advanced AI to finally give birth to the mixed-reality game-changer and platform shift. In the meantime, VR is certainly not dead. In fact, I’d say it’s actually growing out of it’s awkward adolescence phase and maturing into the young adult we all hoped it would be. Even though it may look a little different than we expected, in the right situations, it really does make a whole lotta sense.