In 2016, venture investments in Virtual Reality exceeded US$800 million, while AR and MR received a total of $450 million. Just a year later, investments in Augmented Reality and Virtual Reality startups doubled to US$3.6 billion.
And today, major players are bringing VR headsets to market that have the power to revolutionize the industry, as well as countless others.
Already, VR headset sales volumes are expected to reach 98.4 million by 2023, according to Futuresource Consulting. But beyond headsets themselves, Facebook’s $399 Oculus Quest brought in US$5 million in content sales within the first two weeks post-release this past spring.
With companies like Niantic ($4B valuation), Improbable ($2B valuation), and Unity ($6B valuation) achieving unicorn status in recent years, the VR space is massively heating up.
In this blog, we will dive into a brief history of Virtual Reality, recent investment surges, and the future of this revolutionary technology.
(Note #1: This blog is an excerpt from my next book The Future is Faster Than You Think, co-authored with Steven Kotler, to be released January 28th, 2020.)
Brief History of Virtual Reality
For all of history, our lives have been limited by the laws of physics and mitigated by the five senses. VR technology is rewriting those rules.
It’s letting us digitize experiences and teleport our senses into a computer-generated world where the limits of imagination become the only brake on reality. But it’s taken a while to get here.
Much like Artificial Intelligence, the concept of Virtual Reality has been around since the 60s. The 1980s saw the first false dawn, when the earliest “consumer-facing” systems began to show up. In 1989, if you had a spare $250,000, you could purchase the EyePhone before the iPhone, a VR system built by Jaron Lanier’s company VPL (Lanier coined the term ‘virtual reality’).
Unfortunately, the computer that powered that system was the size of a dorm room refrigerator, while the headset it required was bulky, awkward and only generated about five frames a second—six times slower than the average television of that era.
By the early 1990s, the hype had faded and VR entered a two-decade deceptive phase. Through the 2000s, the convergence of increasingly powerful game engines and AI-image rendering software flipped the script. Suddenly, deceptive became disruptive and the Virtual Reality universe opened for business.
The Disruptive Phase: Surges in Virtual Reality Investment
In 2012, Facebook spent $2 billion on Oculus Rift. By 2015, Venture Beat reported that an arena which typically saw only ten new entrants a year, suddenly had 234.
In June 2016, HTC announced the release of its 'Business Edition' of the Vive for $1,200, followed six months later by their announcement of a tether-less VR upgrade.
A year later, Samsung cashed in on this shift, selling 4.3 million headsets and turning enough heads that everyone from Apple and Google, to Cisco and Microsoft decided to investigate VR technology.
Phone-based VR showed up soon afterwards, dropping barriers to entry as low as $5. By 2018, the first wireless adaptors, standalone headsets and mobile headsets hit the market.
Resolution-wise, 2018 was also when Google and LG doubled their pixels-per-inch count and increased their refresh rate from VPL’s five frames a second to over 120.
Around the same time, the systems began targeting more senses than just vision. HEAR360’s “omni-binaural” microphone suite captures 360 degrees of audio, which means immersive sound has now caught up to immersive visuals.
Touch has also reached the masses, with haptic gloves, vests and full body suits hitting the consumer market. Scent emitters, taste simulators, and every kind of sensor imaginable—including brainwave readers—are all trying to put the “very” into verisimilitude.
And the number of virtual explorers continues to mount. In 2017, there were 90 million active users, which nearly doubled to 171 million by 2018. YouTube’s VR channel has over three million subscribers.
And that number is growing. By 2020, estimates put the Virtual Reality market at $30 billion, and it’s hard to find a field that will be left untouched.
Future of Virtual Reality: Emotive and Immersive Education
History class, 2030. This week’s lesson: Ancient Egypt. The pharaohs, the queens, the tombs—the full Tut.
Sure, you’d love to see the pyramids in person. But the cost of airfare? Hotel rooms for the entire class? Plus, taking two weeks off from school for the trip? None of these things are doable. Worse, even if you could go, you couldn’t go. Many of Egypt’s tombs are closed for repairs, and definitely off-limits to a group of teenagers.
Not to worry, VR solves these problems. And in VR world, you and your classmates can easily breach Queen Nefertari’s burial chamber, touch the hieroglyphics, even scramble atop her sarcophagus—impossible opportunities in physical reality. You also have a world-class Egyptologist as your guide.
But turning your attention to the back of the tomb doesn’t require waiting until 2030. In 2018, Philip Rosedale and his team at High Fidelity pulled off this exact virtual field trip.
First, they 3D-laser scanned every square inch of Queen Nefertari’s tomb. Next, they shot thousands of high resolution photos of the burial chamber. By stitching together more than ten thousand photos into a single vista, then laying that vista atop their 3D-scanned map, Rosedale created a stunningly accurate virtual tomb. Next, he gave a classroom full of kids HTC Vive VR headsets.
Because High Fidelity is a social VR platform, meaning multiple people can share the same virtual space at the same time, the entire class was able to explore that tomb together. In total, their fully immersive field trip to Egypt required zero travel time, zero travel expenses.
VR will not only cover traditional educational content, but also expand our emotional education.
Jeremy Bailenson, founding director of Stanford’s Virtual Human Interaction Lab, has spent two decades exploring VR’s ability to produce real behavioral change. He’s developed first-person VR experiences of racism, sexism, and other forms of discrimination.
For example, experiencing what it would be like to be an elderly, homeless, African American woman living on the streets of Baltimore produces real change: A significant shift in empathy and understanding.
“Virtual reality is not a media experience,” explains Bailenson. “When it’s done well, it’s an actual experience. In general our findings show that Virtual Reality causes more behavior changes, causes more engagement, causes more influence than other types of traditional media.”
Nor is empathy the only emotion VR appears capable of training. In research conducted at USC, psychologist Skip Rizzo has had considerable success using virtual reality to treat PTSD in soldiers. Other scientists have extended this to the full range of anxiety disorders.
Virtual Reality, especially when combined with Artificial Intelligence, has the potential to facilitate a top shelf traditional education, plus all the empathy and emotional skills that traditional education has long been lacking.
When Artificial Intelligence and Virtual Reality converge with wireless 5G networks, our global education problem moves from the nearly impossible challenge of finding teachers and funding schools for the hundreds of millions in need, to the much more manageable puzzle of building a fantastic digital education system that we can give away for free to anyone with a headset. It’s quality and quantity on demand.
In the workplace, Virtual Reality will serve as an efficient trainer for new employees.
10,000 of Walmart's 1.2 million employees have taken VR-based skills management tests. Learning modules that once took 35 to 45 minutes, now take 3 to 5. The company plans to train 1 million employees using the Oculus VR headset by the end of this year. The upfront costs of VR headsets will ultimately be recovered in labor efficiencies.
Multiple Worlds, Multiple Economies
We no longer live in only one place. We have real-world personae and online personae. This delocalized existence is only going to expand. With the rise of Augmented Reality and Virtual Reality, we’re introducing more layers to this equation.
You’ll have avatars for work and avatars for play and all of these versions of ourselves are opportunities for new businesses. Consider the multi-million-dollar economy that sprung up around the very first virtual world, Second Life. People were paying other people to design digital clothes and digital houses for their digital avatars.
Every time we add a new layer to the digital strata, we’re also adding an entire economy built upon that layer, meaning we are now conducting our business in multiple worlds at once.
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