Finally, VR has arrived

While we’ve been talking about Virtual Reality for ages, this year it looks to have finally arrived. The term “virtual reality” dates from the 1980s, and the first mainstream VR headset in the form of Google Cardboard arrived in 2014, so it’s hardly a new thing for many people. However, it’s been languishing in a state of unfulfilled expectations. But that may now be about to change.

The above chart shows a Google Trends analysis of global web search interest in the topics: Virtual reality (blue), Augmented reality (yellow), and other related topics that rate as insignificant in comparison (Mixed reality, Extended reality, and Spatial computing). Looking at the period of time since Facebook rebranded as Meta and announced it would double-down on this area, there doesn’t seem to be a greater level of excitement since then, and if anything, it has declined to about half of the peak.

This is despite strong progress in this area that has clarified technology direction as well as the value of particular use cases. Hence the sector is primed for Apple to come in and make a splash with their new Vision Pro headset that will start arriving in customers’ hands in February. Apple has a good track record of entering a consumer electronics category and massively increasing its size, e.g. portable music players (iPod), smart phones (iPhone), tablets (iPhone), smart watches (Apple Watch), Bluetooth headphones (AirPods), and Bluetooth trackers (AirTag). Whether this has been due to clever market timing, market power, or bringing unique innovations to market is not important to this analysis, but suffice to say, they have solid form even despite some examples to the contrary that haven’t been immediate category disruptors, e.g. in set-top-boxes (Apple TV) or smart speakers (HomePod).

While the initial product from Apple is priced at a premium (US$3,500 to preorder the basic model), it is the usual approach by the company to start high and then bring prices down over time with later product releases. This approach hasn’t harmed their earlier successes, so there is reason enough to feel Apple will be able to repeat their previous examples of significantly growing a category that they enter.

This is, of course, assuming that the category offers real value to customers and end users – a point where there is still some scepticism around. I mentioned before that both technology direction and use cases have been clarified, which is why I am optimistic about success.

A key technology question was around “augmented reality” (AR) versus “virtual reality” (VR). While these can both be considered points on a spectrum of what might be called “mixed reality” (MR) or “extended reality” (XR), in practice, the key question was whether the the screen in the device was transparent or not. However, those products based on transparent screens suffered significant user experience issues, e.g. Microsoft Hololens, Magic Leap, and the original Meta (not the Facebook one). It has now become clear that the same cameras that allow a VR headset to perform inside-out tracking can also be used to provide passthrough of the camera feed to the headset screen, and enable the wearer to see something of the outside world. Unless and until there’s an incredible new technology discovery, the VR world has “won” and AR is now just a feature that can be delivered on a VR device.

The applications for the current generation of VR headsets has shown where the valuable use cases are. I have been a user of the Meta Quest 2 (previously Oculus Quest 2) VR headset, and have found it a lot of fun. At an entry level price of about US$300, the Quest 2 has become the market leader. There were 10 million units sold in early 2023 giving it 75% market share, had reached 18 million units by mid 2023, and continues to sell strongly. So, while my experience of current applications is skewed to what this device has enabled, it is highly representative of the general experience.

“Gaming” is sometimes stated as the main application for these headsets, but I find this is too high-level to explain where the value proposition is. I see three key areas where VR headsets have a strong advantage compared to other platforms:

  1. Fitness applications. Just like the Nintendo Wii enabled games to be created that got people off the couch, resulting in a burst of mainstream adoption for fitness purposes, VR headsets like the Quest 2 or the Vision Pro are not tethered to any other devices, support “six degrees of freedom“, and so enable the user to move around while using the device. Given this, exercise games like Beat Saber and Supernatural are very popular, and even exercise brands like LesMills have apps that provide a familiar workout based around their Bodycombat program. This sort of experience can’t easily be achieved with devices like smartphones, laptops or game consoles, and provides a solid reason to use a VR headset.
  2. Virtual office environments. Many people wish they had another monitor connected to their computer, but cost or desk space considerations prevent it. Additional monitors provide screen real-estate that results in better productivity, with less need to flip between windows or scroll around a screen. In a virtual office, the real-world constraints go away, and you can have almost as many additional monitors as you wish. Meta allows this use case in their Horizon Workrooms app, but I recommend the Immersed app which does this very well.
  3. Immersive training. Just as jet pilots train to fly by using immersive flight simulators, VR enables unique training experiences for those situations where emotions and senses might be overwhelmed. This is shown by the success of Virtual Reality Exposure Therapy to treat Post Traumatic Stress Disorder. Similarly, I’ve seen how VR is effective at training people to respond to disasters in underground mines, fire-fighters to attend burning buildings, and the like. Perhaps in the future, people will get credit for hours that a car or truck is driven on virtual roads given that VR can ensure exposure to situations like night or bad weather. For now, you can try out a Car Parking Simulator. The ability to take over all of the vision of the wearer enables training experiences that are possible only with VR.

In conclusion, I am convinced that VR has valuable use cases and that the technology to deliver them is feasible. Subsequent generations of technology now will continue to improve on the experience through things like increased resolution and frame-rate, improved comfort (including better support for corrective lenses), accuracy of hand-tracking, headset weight, battery life, and so on. However, the sales numbers for Quest 2 devices have shown that technology that is good enough has already arrived. The introduction of Apple to this device category will lift it to a new level of maturity. Finally.