Nivedit Majumdar Nivedit Majumdar

The future of VR and AR: Novelty with more use cases?

Virtual and Augmented Reality have had a troubled existence so far. They come with wonderful prospects, bringing in the best of technology for consumers and businesses alike. They present a solid foundation for app developers to build specialised, interactive applications, and yet the growth rate isn’t really billowing out as most headset OEMs would have hoped for.

Take the Google Glass, for instance. It was a device way ahead of it’s time – and this might have been the biggest advantage and disadvantage for it and the field of AR as a whole; since consumers were trying to find the balance between using the Glass well, and not becoming a Glass-hole. But I digress.

Recent numbers from various research firms are indicating an upward shift in the demand for VR based headsets. Primary factors involve a reduction in prices, as well as the popularization of more robust platforms for mixed reality. Do these trends indicate a rebirth of interest in VR and AR? And can these trend lines hold steady in the future?



For a more comparative study of where the VR / AR market was and is, let’s take a look at the scenario some months back. Specifically, Q1 2017.

With the launch of Pokémon Go, many people would have imagined that VR and AR based companies would do exceptionally well. However, the Pokémon Go bubble burst sooner than expected, and VC interest in AR and VR based startups saw a decline as well.

Source: crunchbase

According to Crunchbase, 26 AR and VR based companies raised just over $200 million in Q1, 2017. Compare the Q1 statistic to that of the previous year, and Q1 2016 saw 29 companies raising over $1 billion. Sales volumes weren’t up to expectations, and all in all, there were mixed to negative forecasts about the still nascent VR / AR market.


VR and AR have made a pretty good comeback from their almost questionable status a couple of quarters back, with Canalys reporting that the Q3 2017 shipments exceeding 1 million units for the first time. Leading the fray was the lower priced PlayStation VR headset, followed by the Oculus Rift, with HTC’s Vive VR headset completing the holy trinity of the most popular headset makers today.

Primary reason for the sudden increase in sales is the reduction in costs (specially for the Oculus Rift), and the market in gaming and entertainment culture in Japan. Experts say that the numbers are bound to increase, with the emergence of more specialised sectors such as manufacturing, healthcare and education. Moreover, with the involvement of more players such as HP, Lenovo, Acer, Asus and Dell, the market will certainly be more interesting in the near future.


But there’s more optimistic news. TechCrunch reports that at least 217 companies in the AR and VR space have raised fundings this year, bringing in $2.1 billion. Microsoft licensed its HoloLens tracking technology to PC manufacturers, HTC released Vive trackers which could sense presence, and Google upgraded its Daydream View for more comfortable usage.


According to ARtillry, global AR and VR revenues will grow to about $79 billion by 2021, as opposed to the 2016 numbers of $4.1 billion.

The fastest growing segment within AR revenues will be comprised of Enterprise AR, with a growth from $829 million in 2016 to $47.7 billion in 2021. As for Consumer AR, the growth will be from $975 million in 2016 to $15.8 billion in 2021. In the Consumer AR space, ARtillry states that until Apple comes out with its AR glasses, the space will be mostly dominated by the mobile device.

When it comes to VR, the Enterprise VR market is expected to grow to about $4.4 billion in 2021, from the 2016 statistics of $665 million. However, in VR, Consumer VR is said to take the upper hand, with the market growing from $1.6 billion in 2016 to $11.5 billion in 2021.

According to VentureBeat, AR will see a renewed interest (and thereby, more use cases) in areas such as live streaming of events, fashion / beauty (trying something out virtually), transportation (maybe in the form of a live map about the transit route), hospitality and travel (in terms of exploring a city), and other service sectors such as restaurants.


Here’s the bottom line: VR and AR – as technologies – will always be cool. Visualising things on displays would provide new levels of interactions, which won’t be limited to just the entertainment sector, but will also rope in more advanced industries such as healthcare.

Now while it is impressive, one has to realise that VR and AR – even after about five years of gaining mainstream attention – are still in their nascent stages. Mass adoption has yet to reach a turning point, and the primary factor for this is additional investments for more specialised hardware. Most consumers are shying away from the technologies owing to the costs, and are resorting to using mobile devices.

With technology becoming cheaper, and big vendors such as Microsoft licensing out proprietary technology though, 2018 might just become the turning point for the VR and AR sectors.