28 October 2016
Virtual reality products offer great value to serious scientists and playful children alike. Photo:
Virtual reality products offer great value to serious scientists and playful children alike. Photo:

Virtual reality all set for a second coming

Investors are always on the lookout for the next exponentially explosive growth market. The usual suspect is the electronics industry, and once again it does not disappoint.

In the course of 2015 and 2016, four companies are releasing independent virtual reality headsets and controllers more powerful and sophisticated than any previous products at an affordable price range of US$300-400 (HK$2,400 to HK$3,200).

Their prospects look bright, judging by the reactions of those who have tried out the new technology. Reviews cite the immersive quality of the headsets.

The companies are all seasoned tech players, including Facebook and its US$2 billion plus acquisition of Oculus VR’s Oculus Rift and cooperation with Samsung; the alliance between Taiwanese smartphone maker HTC and online gaming platform Valve with its 125 million users to produce Vive; Sony’s Morpheus and Microsoft’s HoloLens.

Together with software partners, the four companies are vying to secure market share on this long awaited yet ultimately revolutionary media and work platform.

Over the next couple of decades, virtual reality promises to finally unlock the better part of its potential, promising everything from sneaking around and blowing monsters and fellow players to bits, to making video calls, providing cheap and safe simulation of dangerous activities such as pilot training and bomb disposal, architectural modeling for the construction industries, and playing extreme sports.

The scientific and educational values of these gadgets are not to be underestimated either; their immersive models are useful for scientists and schoolchildren alike.

Yet it was for good reason that virtual reality first collapsed. Advanced VR first arose in the late ’80s and early ’90s from the dreams of the television industry. By the mid-’90s it had collapsed over pricing (with US$1,000 price tags, in a poorer world), and fatally weak hardware and software that did not fulfill the dreams of all but the most devoted fans.

For the next 20 years R&D in virtual reality was pursued on and off, as the underlying hardware and software fundamentals continued to improve rapidly. But as an income generator, VR survived largely in niche markets as simulators for specialized industries.

But the hibernation is over. Multiple suitors are aggressively investing in R&D to catch up on the full potential of new hardware components and software programs, and are energetically courting the gaming press. Soon they will bang on the doors of the mainstream public in developed countries, ready to make their pitches.

There is no doubt in the gaming industry and communities that VR has finally come of age, with rave reviews given to demos and released development kits, such as the commercially available Oculus Rift Development Kit 2, the showroom demos of Sony’s Morpheus, and with the HTC/Valve partnership also having showcased its Development Kit and currently lending it free of charge to qualified developers.

Yet even these models pale in comparison to existing prototypes undergoing the remaining three to nine months of development and tweaking before mass production and inventory stocking begins.

Already Valve and HTC have promised to release their product in November in preparation for the Christmas season, while competitors are expected to release theirs between late 2015 and the middle of next year.

Despite the rushed, highly competitive climate, players hope there will be no unanticipated delays. Avoiding bugs and software issues will be critical for providing a solid experience to consumers.

Even if the hardware is technically revolutionary, a consumer unable to access that experience due to overly rushed software development may easily believe that VR is once again a flop, thus poisoning the well.

Still, as history shows, even the failure of Atari’s ET The Extra-Terrestrial and the resultant mass burial of its unsold consoles and cartridges in a New Mexico landfill were unable to kill console gaming in America. Foreign consoles quickly came in and captured a dominant share of the market for over a decade afterwards.

Amid the intense competition and a market of cashed-up consumers, word will quickly spread as to who delivers the superior product. Yet as far as the situation currently goes, with critical acclaim coming in from every direction, it appears that all the players may have a good product on hand, with different strengths rather than weaknesses.

Should things go right for most or all, and it is already looking as if the future of VR is all but assured, it may easily be a question of who launches first and/or has the biggest campaign, or woos the most gamers to kickstart their reputation as a VR provider.

However, investing in these companies may prove difficult. Steam is privately owned, though its hardware partner HTC trades publicly. And while Facebook shares are available, Oculus VR is owned directly by the company.

At least Sony and Microsoft shares are fully available, but these two may be considered the weaker contenders, given the application of Sony’s VR is yet to be expanded beyond the PS4 platform, and Microsoft with its competent yet fractious and ossified corporate structure and its resultant track record at expanding into non-core, innovative markets.

Whichever wins, and whatever minor disasters may occur, the future is once again arriving in our shops, to be bought up and greedily unpacked in offices and living rooms.

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A Hong Kong-based writer from Norway

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