2016 in Virtual and Augmented Reality: Headset Wars, AR Dazzles, Innovators Explore Alternate Use Cases

Jan 9, 2017 · 11 min read

This guide was put together by the editorial team behind Inside AR/VR, our newsletter dedicated to the latest developments in both virtual and augmented reality, and a must-read to keep up with everything happening in this fast-paced industry.

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Most early adopters first got a taste of modern VR via demos from Oculus and Valve, or via mobile “passive” systems like Google’s Cardboard (on the market since 2014) or the GearVR (which debuted in November of 2015.) In 2014, after their surprise purchase of Oculus, Facebook CEO Mark Zuckerberg predicted that what we now have come to know as the Rift would reach an install base of 50 to 100 million over the first decade of VR’s mainstream use. Many experts and pundits feel we’re not there yet, and that VR needs to find that killer app that can turn passive interest into raging curiosity.


In March of 2016, the Oculus Rift headset debuted. With a hefty price point of $600, not to mention the need for a powerful PC to complete the system, many were taken aback despite the obvious wow factor.


Defining the early trend the following month, the even more expensive ($800) HTC Vive entered the ring, powered by a partnership with Valve, and with a room-scale motion tracking element that the Rift lacked upon release.


As the holiday season reared its head, Sony debuted their anticipated Playstation VR system: A lot cheaper than the others at $400, and instead of the need for a powerful PC, it was designed to run off the PS4 (which already has a 50 million strong install base.)


With the Rift’s adding of room-scale motion tracking later in the year (not to mention the instantly-beloved Touch), many noted the gulf between the more powerful systems and the less hearty Playstation VR, and wondered where things might go from here. (Sony is considered to have a major leg up in terms of video game franchises, but so far they haven’t scored a direct hit with any of their own properties; so far, their most successful games have come from outside developers.)


Many still view VR primarily as a platform for gaming. But thanks to a kind of mismatch between the most popular game formats and the realities of the VR hardware, gaming in VR has been written about largely in terms of qualified success.


Video games are often most prized by gamers when they're substantially long experiences. But necessarily bulky headsets and the disorienting element of spending time in a new reality proved that shorter, twenty or thirty minute VR sessions are more ideal at this stage. From VR sickness to doubled vision, those brave early VR gaming pioneers paid for their dedication to the new technology with blood, sweat, and tears, if not life and limb.


And then there were the games, which many complained felt unfinished; and the excesses of shovelware, the proliferation of which did the technology no favors during this nascent period. There were a few (mostly) undeniable creative successes, like Raw Data, Hover Junkers, Feral Rites, Rigs, and the “downright spooky” Edge of Nowhere. And the slower pace of Minecraft proved proved a perfect fit for a VR adaptation.

Slowly but surely, a consensus seemed to emerge among players and reviewers around the favored categories for VR games: seated cockpit, floating camera, stand and shoot. And many wrote that more fanciful non-gaming programs, like Job Simulator and Fantastic Contraption, managed to show off the potential of virtual reality more simply and effectively that some far more expensive and involved games.


Above all there were the simply awe-inspiring apps like Tilt Brush and Google Earth VR, which in their graceful design seemed to reintroduce to many the very concept of virtual reality.



What is a VR film, exactly? For years, people have fantasized about stepping into 360-degree versions of their favorite movies, a desire potentially spurred on by Star Trek’s Holodeck, among other escapist fantasies. But massive questions persist about cinema’s adaptability to virtual reality. The practical question we heard again and again this year was, “How do you take a medium that requires a powerful singular perspective like movies and instead let people look wherever they want and feel like they’re part of the action?”


Critics have been kind to many of the VR documentaries, and it has been oft noted that they make excellent use of VR’s well-documented potential as an empathy generator. Filmmaker Chris Milk partnered with the UN on a series of VR documentaries with humanitarian concerns, like January’s “Clouds Over Sidra” and August’s “Waves of Grace.” And Christian Stephen’s short 360-degree tour of war-ravaged Aleppo gave the VR audience a new kind of vantage point on a human rights crisis that plagued much of 2016.

On the narrative side, Fox’s “The Martian VR” experience was generally well-received, and the same developers are working on a similar experience for the upcoming “Alien: Covenant.” But the in-lobby promotional VR display for the Fox’s game adaptation “Assassin’s Creed” didn’t seem to make any more waves than the movie itself for most critics.


If there was one moment that seemed to encapsulate the brave new world of VR filmmaking this year, it was the Venice premiere of “Jesus VR: The Story of Christ.” Viewers were shepherded into a room full of unmoored swiveling chairs, which they sat in while wearing headsets as the 40 minute Biblical story unspooled in that new dimension before their eyes.


The image did little to dispel the general confusion about what was destined to become of the meeting of the two ideas, VR and movie-making. (The film itself, however, managed to impress some critics on a technical level.)


Brilliant minds are putting this enthralling new technology to practical use in making the world a better place, and easing stressors on human beings in ways that were simply unimaginable to past generations. Stories of new VR therapy programs seemed to break every week, with everything from arachnophobia to PTSD potentially proving treatable via virtual exposure therapy.

VR simulations were used to train border patrol agents and NFL referees, and give visitors of the Kennedy Space Center mini-tours of Mars. The travel industry took to VR quickly, whether that meant at-home tour previews from the couch or enhanced adventures in the big wide world. The technology also allowed an elderly World War II veteran to finally “visit” the French town he liberated, in a way he no longer could physically manage.


NextVR brought virtual reality to pro sports, with bruising NFL highlight reels promising full virtual reality broadcasts in the near future. That’s already a reality for the NBA, where the VR experiences have won raves.


And psychologists at McEwan University found that VR may even alter consciousness on a basic level, allowing users to recall dreams better than non-users, hinting at an unknown future.



As a concept, maybe AR needed to be seen to be believed: a new layer placed over recognizable reality, to make information easier than ever to access on the spot. As it turned out, the broad appeal of AR became obvious as soon as the mainstream got word.


We might not be talking about AR right now if it weren’t for the Pokemon GO gaming fad, which came out of nowhere to make one intense sweep across the mainstream before leaping headlong into the “wasn’t that cute?” file with hula-hoops, pet rocks and “the burger that rolls” (all of which are surely still on sale as of this writing.)


The game was downloaded 50 million times in its first 19 days of release. Few could resist the appeal of at least trying out a game that sent them out into the real world to hunt for colorful fictional creatures.


Startup Magic Leap has continued to fascinate with their mystery device. The potential of their still forthcoming head-mounted virtual retinal display (“Google Glass on steroids,” according to Gizmodo) has filled their coffers with vast sums or investors’ money. In December, Forbes said the company — which has not yet released a product to market — is worth $4.5 billion dollars. That couldn’t stop some negative speculation late in the year when it was revealed that all was not as it seemed in the company’s much-viewed March concept video: it turned out that the footage was not actually captured from a working Magic Leap system, but instead had been based on conceptual work by New Zealand’s Weta Workshop effects house.

By the end of 2016, augmented reality had garnered the kind of buzz that many would have guessed VR was destined for over the same twelve months. When you consider the surgeon who can now perform surgery with an AR guidance overlay projected onto his patient’s brain, rather than onto an adjacent screen, the appeal of AR seems infinite.



We asked a wide-ranging group of VR experts and writers (including from many of the sites we link to twice-weekly in our regular edition) about VR and AR’s future. Here are some of the most interesting and inspiring responses we got:

NextVR’s Helen Situ writes, “The most exciting news in the space leading into 2017 is the continued investment from global tech and entertainment leaders. 2016 has been an exciting year of several major high-end virtual reality device launches such as the Oculus Rift and HTC Vive, but one of the most exciting platforms expanding this new year is Daydream by Google. Mobile-based virtual reality will continue to drive a significant amount of early consumer interest in virtual reality due to it’s accessibility and price point.”


Murray Walker from the Aurecon Group says, “There are three exciting things that we’re waiting for in 2017 I think. Untethered high-end headsets from Oculus and HTC is definitely a big one. The second has to be all the traditional computer makers (Dell, Asus etc) bringing out cheap headsets that’ll run on normal PC’s (I haven’t tried these yet so not sure how good they are but it will mean VR is put in the hands of so many more people). Lastly I think as more Daydream phones hit the market we’ll also see a big surge in VR use. This will help drive the creation of better and more VR content.”

Ken Lee from Van Gogh Imaging says, “For 2017, I’m personally betting more of AR implemented on top of VR HMD fitted with an external stereo cameras that can address most of the issues above. Think of Daydream fitted with a stereo cameras on the outside to provide external scene viewing. Unfortunately, I’m not sure if the industry will feel comfortable with the people walking around work areas virtually ‘blind’. It may have more entertainment and educational value that industrial as a result. Good news for us is that VR is starting to pick up a good momentum despite the fact that it’s still way below its original expectations.”

Blippar’s Mike Burnett tells us: “Something quite interesting that Blippar is doing is adding face recognition to the consumer augmented reality app landscape. The initial step is recognizing almost any celebrity face, and eventual users will be able to opt in and upload images of their own faces that can then be recognized with the app. In this way a face can trigger augmented reality content.”

Lindsey Goetsch, from Eon Reality, says, “Companies, non-profits, and other organizations, including EON Reality, are taking VR/AR technology to the next level by creating ‘hubs’ or ‘incubators’ around the world, for those who are not as fortunate to attend college. Within these hubs are ‘VR Schools’ where students or people around the world are able to learn how to use this technology with proprietary engines such as the EON Reality platform. These companies offer certificates to students who complete the 11 month course and are then offered jobs within the company or students take that experience elsewhere.”


Vertebrae’s Vince Cacace writes, “We’re seeing a lot of creativity in the live+VR market, and no industry will drive its growth more than live sports. Fans can now watch a sporting event together in-headset in a virtual room with friends that are scattered around the globe. Brands and publishers are jumping on board to support this trend — NextVR partnered with the NBA and NFL while LiveLike partnered with the MLS to broadcast events in live VR. And to mobilize the average user, Facebook just announced Facebook Live will support 360-degree video in 2017.”

Kevin Bassett from iStaging says, “I think AR is still more of a gimmick for now, but it is really going to make a difference in people’s lives when virtual content start blending so perfectly in the real environment that one can’t tell what’s real and what’s not. The inflection point will be when 3D models used for AR become truly photorealistic. Photorealistic 3D models can already be created but are terribly expensive and time-consuming to create, on top of requiring quite heavy computer power. I bet that we will reach this inflection point within 2/3 years.”

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