With global investments in VR technologies growing each year and amounting to dozens of billions of US dollars, there are bold statements claiming that soon people will lose interest for real activities and within the next decade the mankind has every chance to immerse in virtual reality. Dmitry Kirillov, president of Modum Lab’s AR/VR business project development company, spoke on whether this is true, what we all can expect amid rapidly advancing technologies, and what the future holds for the VR market in Russia and the world.
Virtual environment is not simply another novelty or an unusual entertainment medium – this is a radically new technology offering exciting opportunities for people. Despite investors choosing so far to put money into the VR entertainment sector, speaking of the VR market, it would be incorrect to focus only on immersive games. Today, VR projects in business, education, industrial security and marketing have immense potential. Numerous researches show that people process information faster and more efficiently when immersed in virtual reality; they receive the opportunity to test their reactions to the situations that would otherwise be totally unrealistic.
This year’s reports by analysts reveal record investments in the VR entertainment sector in 2018. According to Digi‑Capital, annual agreements in this sphere amounted to $25 bln, twice as much as in 2017. The largest number of deals last year was signed between VR development companies and major investors in China.
Aside from the entertainment industry, today’s VR market is still focused on the B2B segment. However, in 3 or 4 years, VR has every chance to enter the B2C market and become an integral part of people’s everyday life. There are companies – albeit very few – that are oriented towards the mass market. According to initial surveys, B2C clients choose to purchase content mostly for entertainment (74%) and education (17%).
VR is of particular interest to children and adolescents, who adore technology and gadgets. A research by National Sun Yat-sen University specialists revealed that today the VR technology is the most relevant tool for working with millennials: this is a format that appeals to young people stronger than reading professional literature or textbooks. Experts and developers expect VR projects soon to become one of the most advanced areas of the technology use and development.
New trends also stir up interest of internet users in virtual reality. For instance, Facebook launched the first social network compatible with Oculus VR devices. Each user of the network can create their photorealistic moving avatars in VR.
Both foreign and Russian developers of VR content currently agree that the key role in the development of VR in 2019 will be played by Oculus and HTC Vave developers who will promote the VR content on the B2C market within the next 3-5 years.
The number of VR content users grows every year, which stimulates a positive competition and the development of the entire industry. Thus, according to our data, Russia has some 500 companies developing VR solutions. There are thousands of such companies all over the world.
According to the IDC consulting company, the volume of the global VR market in 2018 reached $12 bln and might grow to $20.4 bln in 2019. At the same time, Goldman Sachs estimates the future capitalization of the VR market to be $80 bln by 2020. They also predict that by 2025, sales of XR (including VR, AR, AV and others) will exceed $100 bln with the largest beneficiaries being the consumer and electronic commerce sections of B2C.
The distribution of VR among wide circles of users is hindered by relatively high cost of VR devices, as well as a large amount of poor quality content. Many people are also prejudiced against virtual reality and are afraid of getting ‘lost’ in it. Though VR is unlikely to be able to replace the real life in the near future, it can enrich it and help develop such important areas as education, medicine, marketing, security and industrial production.