The Microsoft HoloLens and Oculus Rift are just some of the augmented and virtual reality devices that compete for a predicted $4 Billion market.
At the E3 2015 Microsoft impressed with a Minecraft HoloLens implementation. Everyone believes now Virtual Reality is finally coming to consumers in a big way. Analyst firm CCS Insight just released forecast of the Augmented and Virtual Reality market.
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After years of development, 2.5 million virtual and augmented reality devices are expected to be sold this year, rising to over 24 million device sales in 2018. The analysts estimate that more than 12 million virtual reality headsets will be sold in 2017, with sales of augmented reality smart glasses expected to be worth $1.2 billion in the same year. CCS Insight believes that although augmented reality and virtual reality are two very different technologies, they each have the potential to deliver transformative experiences.
Virtual reality has the most potential with consumers in the near term. Several technology giants are making huge investments, most notably Facebook's $2 billion acquisition of Oculus VR. Other firms pursuing projects in the area include Google, Sony (with Project Morpheus) and HTC, which has a partnership with games company Valve. Samsung, working closely with Oculus VR, has also produced virtual reality devices for use with its flagship smartphones.
Currently, gaming is the low-hanging fruit for virtual reality devices, but video, entertainment and user-generated content will also drive adoption of this technology.
Ben Wood, CCS Insight's Chief of Research commented: "Most consumers find virtual reality a mind-blowing experience the first time they try it. We believe it has tremendous potential and it's not just about expensive high-end devices such as the Oculus Rift. For only a few dollars, consumers can dip their toe in the water with an inexpensive cardboard holder for a compatible smartphone. We expect this democratization of the technology to deliver growth not just in affluent mature markets but also in emerging markets where smartphone penetration is stronger than ever."
Augmented reality is also starting to gain traction in industrial and business arenas. CCS Insight believes Europe is currently the largest test bed for this technology, with numerous blue-chip companies across all sectors evaluating its capabilities.
Wood observed: "Despite the reputational damage done to the consumer smart glasses segment by Google Glass, companies have realized augmented reality can be used to increase productivity and cut costs. Over the next two years we're going to see the technology move out of trials into full-scale deployments. Companies that embrace augmented reality will gain a competitive advantage."
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Having lived through the first Virtual Reality hype in the early 90s I am still not convinced that this time consumers will adopt virtual reality. There are lots of question marks especially the high price of quality systems. There are many low-cost systems that use smartphones as displays, but the real high quality virtual reality experience is with an Oculus Rift type setup or the Microsoft Hololens. Also nobody is talking today about the nausea wearing VR goggles can cause for some consumers.