Virtual reality is finally here and it’s better than we imagined. Large technology companies like Oculus, Facebook, Samsung, HTC, Valve, Sony, and (of course) Google are all leading the way, and following is an entire ecosystem of developers, designers, and dreamers looking to make a future so bright that we will all have to wear … headsets.
I’ve listed over 250 promising companies that have raised $4 billion and grown the market cap to $15 billion — access the report here.
Not ‘if’ but ‘when’
VR’s roots did not die in the ’80s or ’90s. Consumer VR was just not ready back then. But VR has thrived in academic and military research labs all over the world. This modern resurgence of VR is similar to when the computer escaped the lab and shrunk from mainframes to the PC — consumer VR is now at a reasonable price point, and it’s a high quality experience now.
With over 200,000 developers, and at least 700 startups worldwide, and of course the tech giants mentioned above, we are past the “if” phase of VR and on to the “when.” As someone who started as an enthusiast, then became a developer, and finally investor in, it was very important to spotlight this rapidly growing and evolving ecosystem.
The goal is to highlight both the amazing companies in VR as well as the transformative use cases that they are already finding for this new medium. This landscape is restricted to companies that have either raised capital or have received significant media attention. It purposely doesn’t include the very early stage or stealth startups out there. We wanted to examine what is investible in VR by showing those who have already gotten investment or media traction. It is important to give the industry visibility to itself as well, so potential partnerships can be formed and people entering the industry can get quickly caught up and participate.
We also wanted to highlight some of the mega-trends of the VR industry.
VR is amazing and still has a long way to go
Not only have Oculus, Valve, and Sony made VR affordable, but they have also produced high quality devices that move simulator sickness from a technical challenge to one that good design can solve. Of course there is still plenty of room for improvement for things like retina displays and haptic feedback, but even in the first generation of these proper VR systems (which are tethered to desktop computers or gaming consoles) are powerful beyond compare.
Unlike in personal computing, where it took mobile decades to follow the desktop, both tethered VR and mobile VR are happening at the same time. And for consumers, Samsung’s Gear VR and Google Cardboard have actually arrived before their more powerful but significantly less accessible siblings. When people look for mainstream adoption, it will be these inexpensive mobile VR systems that have already reached over 5 million users and counting.
Because they run on mobile devices, they’ll have fewer uses than their PC and console counterparts. Even so, 360-degree video and casual gaming are compelling entry ways to VR and more than justify the $100 price of mobile VR systems (or even less for Cardboard), especially compared to the all in price of desktop VR (the Vive is $800, the Rift $600, and PlayStation VR is $500 — and this doesn’t count hardware costs) . And while the Cardboard is starting at the most humble of beginnings, technology-wise, Google has shown their commitment to mass adoption VR through mobile by establishing an official VR division earlier this year.
Picks and shovels
While VR creators can use existing content creation tools and workflows, for VR to really take off, it has to be much easier and efficient to create suitable experiences. That is why there is a lot of investment for tools and platforms to make VR creation better. This is especially important when it’s a new medium that needs a lot of experimentation and failures before it gets its first Citizen Kane, Super Mario Bros., or Microsoft Office.
Content, content, content
While investors typically stay away from the hits-driven content business, when platforms shift, platform shifts present unique opportunities. VR content is not yet a saturated commodity, so it is easier to compete here and build not just a great product but to also establish new brands and IPs. That is why it can make sense to back VR games and content studios more so than traditional games and content studios. But that doesn’t mean just pivoting to VR can get you VC investment. That’s still requires an amazing product and spectacular teams, especially with track records of previous breakout success not just with products but with companies.
More than just fun and games
A common misconception is that VR is only good for games or entertainment. VR does makes gaming and storytelling more immersive and compelling, but that deep immersion is also transformative for education, healthcare, design, communication and much more. VR provides a true sense of scale and perspective essential for certain tasks. It also gives a physicality to the digital world and enables empathy like no other medium before it. Given the right experience, VR can be more than game-changing, it can be life-changing.
VR native input changes everything
For the past three years, the widely available VR developer kits included a head mounted display (HMD) but no specific VR input device. That changed a few months back when HTC announced the Vive with proper hand-tracked controllers and more recently with the Oculus Touch. Finally, people in VR could interact with the virtual worlds just as easily and intuitively as they were seeing it. Now that developers are getting their hands on true VR input devices, there will be many more companies unlocking the power of creativity and productivity in VR.
VR takes a global village
With over six active monthly VR-focused meetups in the Bay Area, San Francisco is a hub of VR activity. But there are significant companies in Los Angeles, Seattle, Tokyo, Paris, Barcelona, Seoul, London, Shenzhen, China, and Wellington, New Zealand, and more. And each city has an engaged community of developers, enthusiasts, and evangelists supporting the VR movement. One of the biggest obstacles for mainstream adoption is that people need to experience VR needs to believe it.
But as the rapidly growing communities suggest, the converts are happy to help spread VR, one meetup demo at a time if need be.
Tipatat Chennavasin is the cofounder of The Venture Reality Fund. You can track his 250-plus VR Landscape on VBProfiles.com.