After a very disappointing 2016, virtual reality looks set to have another disappointing year in 2017 while its proponents work out how to fix the issues that keep it from being a success.
The latest blow is the removal of 200 out of 500 of Oculus Rift demonstration stations in the US as a result of poor performance within stores. The idea had been that to get a user to buy virtual reality, he has to try it – but in some stores, entire days have gone by without a single demo being given. Best Buy will continue to range the Oculus Rift but the real estate given up will be re-used for products that produce better sales per square foot.
It appears that the only place where people queue for a demo is at trade shows with the regular user not really seeing the point of the technology. This is a further indication that the limitations of virtual reality continue to hamper its appeal.
Key limitations of virtual reality include:
- Price: Many of the devices cost several hundreds of dollars, and also require a PC to run, further increasing the cost.
- Clunky: VR and AR units are still large, clunky and uncomfortable to wear. In many cases they also make the user feel foolish when wearing one.
- Comfort and security: Virtual reality cuts the user off from almost all sensory inputs from his immediate environment, severely limiting the situations in which the user would feel comfortable using one. Many units also cause feelings of nausea due to an imperfect replication of the real world compared to what the brain is expecting.
- Cable: Many units require an HDMI cable, which prevents the user from moving and also increases the risk of a fall should the user trip over the cable.
- Content: Both games and content remain in short supply, limiting the reasons for users to immediately adopt the platform.
The adult entertainment industry is a good yardstick for the adoption of new media types and even this has been slower than expected to jump in on VR.
The net result is that I think 2017 will be a disappointing year for virtual reality.
The one bright spot remains augmented reality (AR) to enterprise customers. For the enterprise, it is productivity that really matters, with the user experience being less important. This is because in the consumer sector, users pay money for an experience, but in the enterprise, users are paid to use the technology. Hence, enterprise users’ willingness to put up with a substandard user experience is much greater.
The AR user experience is still miles from where it needs to be, but critically it does offer productivity improvements that have led to many companies trialing it particularly for employees in the field. Hence, I think that AR in the enterprise should see both unit shipment growth as well as good growth in revenues from software and services in 2017.
Consequently, the companies to watch this year are those in this field like ODG, Microsoft HoloLens, Meta, Atheer Labs and of course Magic Leap. That said, Magic Leap is an exception – it has made incredibly bold promises around a consumer offering in AR, but it is questionable as to how close it really is in terms of having a working, commercial product.
From an investment perspective, AR in the enterprise is the only place I would entertain putting money into this year unless it is something aimed at fixing the limitations listed above.
This article originally appeared on RadioFreeMobile
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