Our world is constantly being re-shaped by advancements in technology – from PCs to the internet, to mobiles, to tablets. With every new technological transformation, our lives have become a little bit easier and the world has become a lot more accessible. Today, all eyes are on the new-yet-not-so-new kids on the block: augmented reality and virtual reality.

Virtual Reality

Virtual reality refers to an immersive digital world completely cut off from the physical one. It is built on ideas that go as far back as the 1800s, but the term was first used in the 1930s by Jaron Lanier. Today, after nearly a century, it has gained massive traction, with people scrambling to get a taste of the complete immersive VR experience. Leading the way is the gaming industry, which has proven to be the first-adopter of all things visual and tech, and has already created products that leverage the potential of AR and VR technology. Additionally, as an industry, it is not satisfied with just the basic offering, and is striving to push the envelope to achieve richer, more immersive, personal experiences.

According to statista.com,

The VR industry is growing at a fast pace, with the market size of virtual reality hardware and software projected to increase from 2.2 billion U.S. dollars in 2017 to more than 19 billion U.S. dollars by 2020. Another forecast projects revenues from the global virtual reality market to reach 21.5 billion U.S. dollars in 2020.”

Currently, competitive gamers have an average PC spend of USD 1500 – 50% more than users who do not game. Keeping this in mind, a full gaming rig with premium VR, estimated at around USD 800, with VR headset and games, is well within the budgets of competitive gamers. Cost of hardware is predicted to fall further. The cost of an Oculus Rift is now USD 399, while the new Oculus Go is even more affordable, with a USD 199 retail price having launched in May 2018. In fact, 200 million+ consumer VR head-mounted displays are expected to be sold worldwide by 2020, implying that more and more people will be turning to these technologies and making them a staple for entertainment, be it esports, films, or music.

 

Augmented Reality

Unlike virtual reality, which is completely cut off from the real world, augmented reality blends the virtual and physical worlds. Due to its easy accessibility (via mobile or tablet), AR has caught on faster than VR amongst the masses. Augmented reality has been growing in popularity amongst the developer community since 2006. However, it was only in 2017 that the industry received a significant boost, when AR exploded into the mainstream with the release of Pokemon Go and AR development kits by Apple and Google.

Pokémon Go was the first memorable instance of mass AR consumption. A location-based AR game, it had more than 100 million downloads in its first month of launch, reportedly earning $10m per day at the height of its popularity. Due to its mass appeal, it attracted more attention and investment. But why did it work? First, it brought our favourite Pokemon to the real world, in a sense; secondly, it promoted a sense of community by bringing people together. Most of the break-through technologies have done much the same.

The best part about AR games is that they introduce elements in our otherwise ordinary world. In Pokemon GO, a pokemon could be hiding behind a chair or a dustbin on a street that you pass daily. It gives us an opportunity to build a new world on the foundations of our current one.

According to insightssuccess, “With the new advancements in AR, players can scan a room with their devices and create a 3D map of the walls and furniture. Gamers can place their virtual characters and objects on real tables and shelves, while other players can view the scene and join via their own devices.”

The proof of the popularity is in the numbers. There are approximately 200 million AR-compatible devices on the market, with this number expected to increase 10-fold, to 2 billion, by end-2019. In addition, billion-dollar investments in wearable technology firms such as Mirror Labs and Magic Leap are forecast to bolster the size of the AR addressable market, in addition to taking immersion to the next level. Add to that the Hololens initiative from Microsoft coupled with Apple’s acquisition of Vrvana (a VR/AR eye-tracking “crossover” company) and Akonia Holographics (which develops lenses for AR glasses), and the future of augmented reality looks exceptionally bright.

Advertisers are already engaging with AR to disrupt traditional digital marketing with immersive, interactive AR content. A case in point is the Jaguar Land Rover AR experience that created a simulated driver cockpit experience for potential customers.

Needless to say, AR has significant potential to serve not only as a vital acquisition funnel for VR game technology and content, but also as a brand new stream of views and revenue for game streamers who are struggling to differentiate themselves in an increasingly competitive market.

The market for both realities

Augmented reality and virtual reality will be most widely used in the gaming industry and, with the increase in number of both casual and professional gamers, their future seems to have an abundance of lucrative opportunities. The two technologies add a fantastical element to gaming, making it seem both ethereal and personal. VR and AR provide opportunities for people who are both gamers and athletes. A case in point is HADO, a Japanese firm that has been hosting an annual VR/AR competition for the past few years. In 2017, it expanded into other SEA countries including Singapore, Malaysia, Indonesia, and Vietnam. Its second official international tournament, the HADO World Cup, saw 12 teams from three different countries competing for the championship title. You can check the promo here.

Thus, undeniably, the convergence of these two technologies will help make the future of esports brighter than it already is.