SAN FRANCISCO — Everyone tuned into tech has heard of virtual reality and its coming wave of goggles with futuristic names such as Oculus Rift that immerse you in other worlds.
New flash: VR is poised to take a significant backseat to AR – augmented reality – as soon as gear providing that partly immersive experience becomes mature.
By 2020, AR will claim a projected $120 billion of the total $150 billion AR/VR market, according to a new report from Manatt Digital Media, a Los Angeles-based consulting firm targeting digital entertainment and advertising firms.
Where VR is a closed-off experience, AR eyewear will allow viewers to see the real world while visually overlapping relevant information in the user’s field of view.
“Although this technology’s story is told more strongly through the magic of VR, it’s clear that AR is the route to the mass market,” says Manatt Digital Media CEO Peter Csathy. “We think the comparison market-size-wise would be between the mass mobile market, which is AR, and the niche gaming market, which is VR.”
Although video games have served as the proof-of-concept platform for many VR/AR content providers, Hollywood and Madison Avenue players increasingly are keen to offer consumers alt-reality content. Disney recently invested in VR-content provider Jaunt and Lucasfilm has set up an in-house lab dedicated to making VR content for franchises such as Star Wars. In the ad world, brands such as Nike and Ferrari have used VR to help sell their products, often leveraging inexpensive smartphone-based VR tech such as Google Cardboard and View Master VR.
Other businesses are seeing the advantages of AR/VR content. For example, real estate site Redfin, which recently began offering VR property tours at new home-buying classes in San Francisco and Seattle that use Samsung Gear VR goggles to give potential buyers a feel for a house without visiting it.
Manatt’s report indicates that within AR, about a $40 billion in revenue will be generated by hardware, an area where many eyes remain fixed on Alphabet’s restart of AR-pioneer, Google Glass. Although that product never got beyond an enterprise-focused test market, Google’s lead in a $500 million investment in Florida-based AR company Magic Leap spotlights its intent to get AR right the second time around. And Microsoft hopes to play in both worlds with its forthcoming HoloLens, which is said to combine the virtues of both AR and VR hardware tech.
The remaining $80 billion of AR’s pie be divvied up by applications ranging from movies to theme parks, according to Digi-Capital research. Meanwhile, VR’s $30 billion share will come largely from video games (about 45%) with the rest almost evenly split between film and theme park applications and hardware.
Microsoft and Facebook both have indicated that their respective four-figure products, HoloLens and Oculus Rift, will hit developers next year.
Csathy, who will moderate a panel at the annual digital media and tech-focused Siemer Summit in Los Angeles today and Wednesday, says that the full spectrum of uses for AR and VR are still being explored.
“We see this being very big in immersive journalism, where you don’t just read about the story, but become a part of it,” he says, citing as an example Clouds of Sidra, a short VR film commissioned by the United Nations that brings viewers into a Jordanian refugee camp.
What remains to be seen, Csathy cautions, are the potential negative side effects of the coming age of VR/AR.
“Will people get a very real version of PTDS (post-traumatic stress disorder) as a result of playing an immersive version of (popular video game) Call of Duty?” he says. “Will terrorists use VR to traumatize people by exposing them virtually to the terrible things they do? There will be unintended consequences of this technology, for better and for worse.”
Follow USA TODAY tech reporter Marco della Cava on Twitter: @marcodellacava
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