Real Growth from Virtual Economies – Part I: The VR Boom

Apologies for the long summer break this year, I am hoping to return to regular posts of 1-2 per month starting now. I have also been working on putting together an e-book with most of the ThoughtInfection posts from the last year and a couple of all new essays that will only be found in the ebook. I am hoping to release some time this fall – please stay tuned for that.

This is part 1 of a series on the coming boom in Virtual Reality Economies which I have titled Real Growth From Virtual Economies. In this post, I will make the case that a major boom in the proliferation and adoption of consumer grade virtual reality hardware is about to happen, but this will mark just the beginning of a deeper shift towards mass virtualization which will spread out across our social, economic, and political reality. 

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We have been hearing about the promise of virtual reality for years now. Since at least the 90’s there has been a pop-cultural fascination with virtual reality. Before even the internet existed, there was talk about how soon we could all be living virtual lives within virtual reality. VR was going to change everything, and it was going to happen soon.

But it didn’t.

Major disappointments like the VirtualBoy marked the end of a hype cycle for VR that would not come around again until it was kickstarted back to life by the Oculus Rift in 2012. Now there is reason to believe that VR might actually live up to the hype this time. For a number of reasons, I think that we are in the beginning stages of a major VR boom, one that will see VR hardware in most homes within a decade. In the same way that we have seen smartphones go from an astounding new technology to totally ubiquitous in under a decade, I think we will see a similarly amazingly quick and complete adoption of VR over the coming decade.

The VR technological zeitgeist.

The first reason that VR is about to boom, is that the technology has finally gotten to a point where the problems of making a person feel like they are present within a virtual world have now become tractable. This is the single realization that Luckey Palmer came to in his garage a few years ago. Smart phones have driven down the costs of small, lightweight, high-resolution screens far enough that a device which straps that technology to the face is now possible. In addition smart phones have also driven down the costs for sensors which can provide accurate and low-latency head-tracking.

Now other companies in addition to Oculus are entering the field, and we are moving towards the release of high-quality consumer grade Virtual reality devices likely in early 2015.

Additional technological advancements should also be considered enabling technology for the emergence of VR including the continued growth of high speed networks which can handle the bandwidth to allow smooth communication between users in virtual spaces, and the incremental improvement of technologies to allow users to mirror their own actions in virtual space (1,2,3).

All of these technological improvements mean that a VR experience with a true feeling of presence can soon be a reality, but for this technology to see a rapid adoption it also is going to need a strong demand to make it happen. The smartphone took off as a technology because people wanted to be able to do things like mapping and browsing with a device that they could hold in their hands. The killer apps were what drove the uptake of the technology. But what about for VR, are there killer apps which will take the technology beyond the hands of the techno-elites?

The killer apps of VR already exist. 

The application of VR to next-generation gaming is obvious, so obvious in fact that I am not going to say anything more than this – the Oculus Rift is going to give every gaming console manufacturer a run for their money when it is finally released.

As big as VR is going to be for video games, it is important to note that this is much bigger than gaming. Contrary to what the Oculus Rift is typically being used for today, I think the most important role of VR is in enabling not just presence but shared presence. Imagine being able to sit across the table from your distant friends and family and have a cup of coffee. That coffee is real, and its really on the desk in front of you, its just the other side of the table and the person sitting there is thousands of miles away.

Now imagine sitting around a camp fire telling stories with a group of your best friends. For me, there is something magical about that kind of space, sitting staring into the flames while you chat about everything and anything. I see no reason that this kind of social experience could not be recreated within a virtual environment.

The future of communication is VR, and Facebook can see that.

The delivery of TV and movies could also constitute a killer app for virtual reality. Oculus developers are already experimenting quite successfully with recreating the shared theater-going experience in virtual space. While this might seem to be somewhat of a niche application for the hardware, I think that wanting to share a movie experience with particular friends could perhaps be hugely popular.

Another very exciting (killer app) for virtual reality might be to bring consumers right into the action for live sporting events. Imagine being able to sit courtside for any NBA game. It would make the experience of watching such an event on television seem downright archaic.

The proliferation of VR hardware will be just the beginning. 

As soon as Virtual reality gets over the initial few baby steps of an emergent technology and one of the many killer apps gets a hold, I think we are going to see nothing less than an explosion. The fact that so many obvious applications for VR, running the gamut from social and professional communication to entertainment and sports tells me that this is a technology whose time has come. I would not be surprised if we see multiple VR devices in most home a decade from now.

And as the hardware for VR starts to become omnipresent in the next decade, its wider economic effects are going to be intense. Just as the smartphone provided the infrastructure for new kinds of digital market places (ie the multi-billion dollar App market), VR may provide the infrastructure for whole new kinds of economies.

In my next post I will discuss the emergence virtual economies and discuss whether virtual jobs might hold the key to job growth in the 21st century. 

 

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4 thoughts on “Real Growth from Virtual Economies – Part I: The VR Boom

  1. Love the optimism, I still think we’re further away from VR being mainstream, mainly because you still need to strap something to your face. For the conversations with distant relatives and fireside gatherings it would need to be something more akin to augmented reality, in which you still see your surroundings, but also see your friends, otherwise I could see it be frustrating to manipulate the real world, which inside the virtual reality, something as easy as drinking a coffee or eating a chip is harder when you can’t see, even if it is usually only peripherally

  2. Pingback: Real Growth from Virtual Economies – Part II: The Rise of the Virtual Economies | Thought Infection

  3. Pingback: Real Growth from Virtual Economies – Part III: A Day Inside the Virtual Economy | Thought Infection

  4. Pingback: 044: Jason Ganz on “What is the Future of Virtual Reality?” | Review The Future

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