Last month The New York Times Magazine delivered 1.2 million Google Cardboard virtual reality (VR) viewers to subscribers and asked them to watch a virtual reality film downloadable through a mobile app. It was the first in a series of virtual reality films the magazine intends to produce.
The project showed that virtual reality has officially arrived — widely accessible to both consumers and content creators. As it wows kids and grandparents alike, it is clear that VR is at a tipping point and is poised to enter the mainstream.
FirstMark is deeply involved in the nascent ecosystem around 3D, AR and VR through our investments in Sketchfab, BioDigital, and BodyLabs. We also host one of the largest monthly events on the topic in the country, Hardwired NYC, which gathers the entrepreneurs and investors who are shaping the industry.
We believe 2016 is going to be an exciting year for the VR market for two important reasons: we will see (1) the release of the most sophisticated headsets and cameras to date, and (2) the maturation of networks and communities to find compelling VR content. Access to this rise in quality to both create and consume VR has the potential to transform industries and our culture.
This guide is for those that want to explore VR beyond the experience delivered with their Sunday newspaper. To get you up to speed, here’s a primer on the overall VR market, and the tools used to create, distribute, and consume VR content.
Defining “Virtual Reality”
So-called “spherical” and “cylindrical” cameras produce “360 video,” which is sometimes called “immersive media.” But, “VR” has been accepted as the easiest way to describe videos created with a camera system that simultaneously records all 360 degrees of a scene or computer-generated objects that can be viewed from all angles. These videos enable viewers to pan and rotate a video’s perspective to watch it from different angles, or strap on a headset and be completely immersed within the images captured.
Sizing the Market for Virtual Reality
Digi-Capital, a financial advisory firm focused on augmented reality (AR) and VR, forecaststhat the market could hit $30 billion in revenue by 2020. Market intelligence firm Trendforce is even more bullish, predicting the VR market will reach $70 billion by 2020.
Industry watchers see VR’s addressable market as primarily games and 3D films, but the mix of opportunities will include offerings across a range of applications, both consumer and enterprise, including real estate tours, customer service, how-to videos and more.
Venture Capital (VC) Activity in VR
In the first nine months of 2015, virtual and augmented reality companies raised a total of $408 million, up from $145 million during the first nine months of 2014, according to CB Insights. Since the start of 2012, companies in the sector have raised nearly $1.5 billion in total, including a massive $542 million round for Magic Leap in 2014 (accounting for the spike in the graph below).
An Example of a Mature VR Company
Jaunt has been a first-mover in VR technology and content, and is a good example how the market is maturing. The company created technology where none previously existed, including camera rigs, VR video processing, and a distribution network. Jaunt operates a complex business model that blends core VR technology and a studio model. The key for Jaunt will be leveraging that early momentum in building a full-stack VR company to cement itself as the premier creator and technology provider for immersive content. But, an increasing risk is the growing number of companies targeting each layer in the VR stack.
Watching VR: A Survey of Hardware Options for VR Consumption
Google Cardboard — It’s very cheap, very accessible, and it’s a great way for people play with the technology.
Price — Many kits available for under $20
Samsung Gear — The Gear VR is an Oculus Rift powered device that uses a Samsung Galaxy smartphone (Note 4 or Galaxy S6 depending on the version you choose) as its processor and display. The Gear has been called one of the best all-around and consumer friendly headsets on the market.
Freefly VR — This headset uses a unique wing design to lock a phone in place for the display. Freefly fits any smartphone with a screen between 4.7-inch and 6.1-inch.
Zeiss VR One — Similar to Google Cardboard, use any iOS or Android device between 4.7 and 5.2 inches as the hardware for the device. But the Zeiss is considerably sturdier than Cardboard, with a plastic case, foam padding and an adjustable headband.
Coming in 2016:
Oculus — The Oculus Rift plugs into your computer’s DVI and USB ports and tracks your head movements to provide 3D imagery to its stereo screens. A consumer version of the headset that includes integrated headphones is slated for next year.
Availability: Q1 2016
HTC Vive — Created by smartphone maker HTC and video game developer Valve, the Vive plugs into PCs and taps Valve’s library of games for content.
Availability: April 2016
Sony Playstation VR — The device connects to the Sony PS4 and its library of games.
Availability: First half of 2016
Fove — This headset differs from others in that it offers interactive eye-tracking, enabling a simulated depth-of-field since the system knows exactly what you’re looking at.
Availability: Developer kits shipping Spring 2016
Price: From $350
Creating VR: A Survey of Hardware Options for Content Creation
Richo Theta — This camera is considered one of the best for personal use. It shoots in 1080p HD at 30fps for up to 25 minutes at a time.
V.360 — Aimed at the action sports crowd, this camera claims to be shock, dust and water proof. Videos are recorded at up to 30fps at a max resolution of 6480 x 1080 HD.
Freedom360 — This mount holds 6 GoPros to create 360 degree immersive video. Of course, you will also need to purchase the GoPro cameras in addition to the rig.
Giroptic 360cam — The 360cam’s footage can be recorded at 2048p 2K and 4096p 4K, promising full spherical photos and videos as a .jpg or .mp4 file, without any software or post-processing.
Availability: Available for pre-order
Bublcam — The device has four cameras, each pointing in a different direction to create videos and photos that are spherical in shape and fully prepared for immersive viewing online. The Bublcam films 1440 x 1440p footage at 30fps.
Sphericam — With six built-in 4K lenses, the camera captures 360-degree video at 60fps. Sphericam also promises WiFi, allowing you to live stream video to desktop or mobile devices.
Availability: Pre-order for February/March delivery
Google Jump — The Jump camera rig consists of 16 camera modules in a circular array. The Jump platform includes a video “assembler” that stitches all the files together to create stereoscopic VR video.
Nokia OZO — Powerful and compact, OZO captures 360 spherical video and 360x360 surround sound and offers a live virtual reality preview. Footage seamlessly integrates with existing video and audio compositing workflows. Featuring 8 2K-by-2K sensors which sync with 8 microphones, the OZO VR is aimed at professionals.
Lytro Immerge — Instead of having to capture several different shots and stitch them together, the Immerge uses a super dense light field array to capture the entire 360-degree image. The technology captures all the data from all directions at any location within a given volume — allowing virtual views to be generated from any point, facing any direction, with any field of view. The camera is aimed at studios producing high-end VR content.
Price: Jason Rosenthal CEO has said the price will be in the “multiple hundreds of thousands of dollars.”
Finding VR Content: A Survey of Virtual Reality Content Networks and Communities
Littlstar — Littlstar is a platform dedicated to immersive 360 video and photos. Users can discover, watch, and share the content on virtual reality devices, Littlstar’s native iOS and Android apps, and the web.
Milk VR — A network operated by Samsung, Milk VR features downloadable and streamable content free-of-charge for Samsung Gear owners.
Sketchfab — Sketchfab is the platform to publish and find the best 3D content, which can also be explored in VR. Content on Sketchfab can currently be viewed with Google Cardboard and the company is planning to expand VR support to all major headsets, next being the Oculus. [Disclosure: FirstMark is an investor in Sketchfab]
Vrse — Vrse is a production company in the VR space co-founded by renowned music video director Chris Milk. The company distributes content through Vrse apps for iOS and Android.
WEARVR — WEARVR is an independent virtual reality app store hosting more than 1,000 VR games and experiences.
YouTube — YouTube’s 360 Channel is a destination for popular virtual reality videos that range from news to action sports.
What about Augmented Reality?
Many believe we’re moving toward a world that is more augmented than virtual. AR brings virtual objects into the real world, rather than a fully immersive experience. Peering through a lens to see a digital T-Rex strolling through Manhattan isn’t out of reach, but you can certainly expect more practical applications such as informational graphics that appear around items in view (imagine having someone’s name pop up in the display when you look at them).
A Digi-Capital report suggests that AR may have an edge over not just VR, but the entire smartphone and tablet market. “A large AR user base would be a major revenue source for TV/film, enterprise, advertising, and consumer apps from Facebook to Uber to Clash of Clans,” the report says. “Amazon and Alibaba would have an entirely new platform for selling to a mass audience.”
Digi-Capital expects the market for AR to grow to $120 billion by 2020.
Connecting with the VR Maker Community: Hardwired NYC
Given our belief that the VR market will explode in the coming years, we are continuing to explore the VR landscape as both investors and consumers. We’re eager to get our hands on some of the incredible devices and content set to debut in 2016.
If you’re as eager as us to dig into the world of VR, we encourage you to join Hardwired NYC. Hardwired NYC is a monthly event that explores the intersection of the physical and digital worlds. Each month, we welcome entrepreneurs working on virtual and augmented reality, as well as the Internet of Things, 3D printing, robotics, and beyond. Our 4,000 member strong community represents a broad cross section of entrepreneurs, leaders from industry, investors, and enthusiasts.
And, finally, while they’re not recorded as 360 video (yet!), we think you’ll enjoy some some of the most recent Hardwired talks on VR here:
Christina Heller, VR Playhouse: Virtual Reality: What’s Next?
Shane Scranton, IrisVR: Virtual Reality For The Real World
Ben Nunez, Littlstar: The Market for Virtual Reality
Alban Denoyel, SketchFab: 3D Trends & Startup Lessons
Pete Wassell, Augmate: Getting Wearables Into the Enterprise