What Does the Future Hold for Virtual Reality?

What Does the Future Hold for Virtual Reality?

 

The virtual reality (VR) industry may very well be the most exciting one in the stock market right now.

With high expectations and an even higher pace of technological change, many fear coming volatility could send stock prices tumbling. This has some investors steering clear of this high-flying market. But a potential inflection point in demand could provide incredible returns for more risk-tolerant, forward-looking investors.

Let’s take a moment to quantify those high expectations. Research firm IDC predicts that the virtual and augmented reality market will dramatically expand from just over $9 billion last year to a whopping $215 billion by 2021! That incredible 118% compound annual growth rate in four years would make VR one of the fastest-growing industries on the planet, which growth-minded investors simply cannot ignore.

IDC further explains that the outsize growth will be made possible by an explosion in the sales of VR headsets, such as Samsung’s (NASDAQOTH:SSNLF) Gear VR, Facebook’s (NASDAQ:FB) Oculus Rift, or HTC’s Vive. It predicts the number of headsets sold annually will grow from 14 million last year to 81 million by 2021. More headsets with better performance reaching the hands of consumers will attract content developers, which could fulfill a virtuous cycle and create a massive industry.

Gartner’s Hype Cycle, which tracks the expectations that the market has for technology over time, believes virtual reality has reached an inflection point. After a few years of significantly lower expectations (which they refer to as the “Trough of Disillusionment” in last year’s graphic), they believe VR will experience a renaissance in the coming years (the “Slope of Enlightenment”), which could spur adoption as firms recognize ways to incorporate it to create value.

 

Are we virtually there?
But we’ve been waiting for VR’s hockey stick of rising demand for quite some time now. Rather than accept the hype or the Hype Cycle at face value, why not directly solicit an informed opinion to determine if those lofty forecasts were directionally correct or completely out of line? So, we spoke with someone who lives and breathes the VR industry on a daily basis.

Enter Jan Goetgeluk, who is the founder and chief executive officer of Virtuix. After a successful career in investment banking, Jan founded Virtuix to be a leader in the VR industry. The company’s Omni virtual reality solution allows for complete, 360-degree movement of the body on a frictionless pad, which is drawing gamers for the unique, immersive experience. Virtuix is also partnering with more than 20 global game developers, such as Arizona Sunshine, Affected, and VRZ Torment.

In the video below, Motley Fool Explorer advisor Simon Erickson interviews Jan about where the VR industry stands today and where it’s headed in the next three years. The two also have some fun chatting about what it’s really like on the set of Shark Tank and discuss Steven Spielberg’s upcoming VR-inspired movie, Ready Player One.

 

For more information please read the full article by Simon Erickson

 

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