The Internet (as we know it) has been around for a little over 20 years now. The impact it has on our day-to-day lives is unmistakable, and is most noticed by millennials and generations prior, who lived the low-tech life before going digital. Modern communication, entertainment, transportation infrastructures, and countless other industries have all been disrupted in some way shape or form, thanks to the Internet.
During the 2000s, the web underwent a dramatic transformation. People began to use it for more than a simple messaging and email method. The earliest forms of social media began to appear, with MySpace being the first to reach 1 million monthly active users. Internet-based companies from that time such as Facebook, Amazon, Google, and Twitter have gone on to become household names.
By comparison, we are at the cusp of a turning point that is comparable to 20 years ago: a nascent but high growth market has the power to usher in a new era. In this case, virtual reality (VR) is poised to become a multibillion dollar , and it is largely due to the interest and popularity surrounding VR gaming.
The Evolution of VR
The concept of virtual reality actually dates back to the early 1900s, as imagined by Stanley Weinbaum in his story, Pygmalion’s Spectacles. His vision of a virtual reality machine was shockingly prophetic, describing a pair of goggles that puts the character into a stimulating fictional world. Around 1955, Morton Heilig created the first VR machine and head-mounted display. Ten years later, Ivan Sutherland created the modern concept of virtual reality: a virtual world that replicated reality perfectly, and was powered by computer hardware to keep it updated in real-time. In the 1990s, video game companies Sega and Nintendo unveiled their first VR gaming solutions, a headset and a 3D game console, respectively. Both were commercial failures, possibly for being ahead of its time.
VR advancements throughout the years finally coalesced in 2010, thanks to a college student named Palmer Luckey. He created the first prototype of the Oculus Rift, and just two years later, he raised $2.4 million from a Kickstarter campaign. Social media giant Facebook bought the Oculus Rift in 2014 for $2 billion, finally bringing virtual reality to the forefront of public consciousness. Sony subsequently announced they were working on Project Morpheus (now known as Playstation VR/PS VR) and Google released Google Cardboard, a low-cost VR platform using user smartphones. Samsung also released the Samsung Gear VR in collaboration with Oculus, which used Samsung Galaxy smartphones as the display and processor.
The Future of VR
Gaming is already a force within the , pulling $160 billion in revenue as of 2020 with a +9.3% year-on-year increase. The number of gamers worldwide are only rising and are expected to exceed 3 billion by 2023. With VR evolving at its current rate, movie nights or game nights could eventually turn into cyber nights, a new norm for those under 35. Games would no longer need to be marketed towards one group or identity, and would enable a more casual audience to approach virtual worlds without the traditional complexities. For more experienced audiences, this would be a new immersive way to play their favorite franchises.
The intensifying demand for technologically progressive electronic games amongst millennials is anticipated to drive the market growth from 2020 to 2027. In particular, the pandemic has fueled video game spending, which has also invigorated the previously uneventful VR space. Recent games such as Valve’s critically acclaimed Half-Life: Alyx are pushing the medium further and setting the bar for all VR games onward. VR games that can be played with others are also becoming more and more common with social multiplayer games like VR Chat as well as tactical shooter games like VAIL.
The VR gaming market value is predicted to reach $92.31 billion by 2027, expanding at a compounded annual growth rate (CAGR) of 30.2 percent over the forecast period. Long-term growth for AR and VR headsets will be strong throughout the forecast period with shipments growing to 76.7 million units in 2024, resulting in a CAGR of 81.5 percent.
We are now barreling towards an unprecedented era. According to Kurzweil’s Law of Accelerating Returns, technology grows exponentially, compounding upon previous breakthroughs in every iteration. With Internet technology so integrated nowadays, we have a solid foundation for a virtual reality revolution that can be comparatively disruptive for those who were born into the digital and connected world.
Bio:
Jonathan Ovadia , CEO of AEXLAB, is a virtual reality evangelist and gamer working with cutting-edge technology to deliver an immersive and interactive social gaming experience called VAIL VR.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.