5 Reasons Why Virtual Reality Will Not Die Like 3D Television

Last week’s Mobile World Congress theme was “Mobile is Everything” but walking the floors in Barcelona you got the strong sense that the real theme was “VR is Everything.” Coincidentally, a few weeks ago I attended the first Vision Summit, a VR developer conference in Los Angeles sponsored by gaming/VR platform software company Unity Technologies. The differences between MWC and Vision were dramatic: global juggernaut MWC boasted over 100,000 participants from over 200 countries, spread out over 8 packed two-story convention halls. Vision was attended by around 1,000 people and we all fit comfortably on a couple floors of a hotel in Hollywood. What struck me most was that both events touched on almost identical themes about the future and promise of virtual reality. And one question repeatedly came up: Will VR go the way of 3D TV?

Unless you considered buying a TV around 2010–2012 or are a VC like me, you may have missed it: 3D television was one of the epic consumer electronics failures of the past decade, hitting the peak of its hype cycle around 2010 and joining the dustbin of failed experiments by 2013. There are multiple similarities with VR: Immersive experience, sub-$400 upsell to their 2D counterparts (less than the HTC Vive or Oculus), promises of content including Super Bowl 46 in 2012 (didn’t happen), and new camera technology to capture 3D. Sound familiar?

While the parallels are many, I think that unlike 3D TV, virtual reality has a real shot at becoming a bona fide mainstream technology. Here are 5 key differences between 3D TV and VR:

1. Portability: VR is a mobile device that you can take with you, while 3D TV was buried inside a television that plugs into a wall. As the smartphone has proven, mobility adds convenience, improves user experience, and enables new applications. Current VR devices still need to attach to high-end PCs, a phase I’ll call “Tethered VR,” so the end user applications are limited to some degree. Tethered VR must find a “killer app” to drive unit demand in the millions, and I think it has (see below). While stand-alone, all-in-one Mobile VR sets won’t come to market this year, Mobile VR devices should be on store shelves by the end of 2017 and will be a game-changer.
2. Hardware Ecosystem: Unlike 3D TV, VR is getting an early boost from the hardware ecosystem of mobile phones, a brilliant and key design principle for first-mover Oculus that leverages a large existing market to lower costs. This approach has been replicated by every mobile phone player in the world: giants Samsung, LG, HTC, Huawei and others showcased their VR wares in Barcelona. Smartphone technology will take VR almost to the finish line, but Mobile VR needs several new technologies beyond phones, such as vision processing from the likes of Movidius, new displays, tighter device specifications, etc., since headsets cover two eyes rather than one ear.
3. Content Ecosystem: 3D TV was intended for live action content, and sports was supposed to be its “killer app”. It never happened. By contrast, VR has a killer app: Gaming: Every major game publisher is aggressively building new content and relaunching “vintage” (i.e. old) titles in VR, aptly seeing VR as a fundamentally different user experience. Outside of gaming, applications such as Google Tilt Brush are creating new modes of self-expression, and my experience with Tilt Brush reminded me of the “You can do that!?” moments of using MacPaint as a youngster. Live action content is also being developed, though I’m less impressed with what I’ve seen so far. In live action, mobility is limited in a Tethered VR device and the camera/stitching technology is still getting ironed out so you are more of a spectator than a participant. But gaming is sufficient, I believe, to drive VR for the next 12–18 months while other modes of VR content develop in parallel.
4. Early Adopters: 3D TV required live action content to drive usage, and the technology died when those content producers gave up. VR has content, so not surprisingly gamers are the early adopters of VR for several reasons. First, the gaming experience is, in a word, awesome. Second, Tethered VR is essentially a $600-$800 accessory to a game PC or console that gamers already have. Third, the gaming community is massive and sufficient to buy tens of millions of these devices. I believe that Tethered VR will lay the groundwork for Mobile VR to enter the mainstream as we cross 10 million units shipped.
5. Social: As we’ve learned with Twitch, gaming is a social phenomenon. VR has the potential as the foundation of a new global social network, first in gaming and then spreading to the broader public. VR’s immersive qualities enable social connections to take place at a deeper and very personal level. While VR will certainly connect gamers worldwide, imagine VR capturing, for posterity and for our families and friends to experience with us: our graduation, our weddings, the birth of our children, their birthdays, their graduations, their weddings, etc. This is the really exciting part, VR entering the mainstream as a way to build stronger relationships between ourselves, those we care about and unknown future generations.

Today VR has a great deal of hype, and while I’m a believer that the long-term future is bright, my biggest fear as an investor is that the timing of mainstream adoption may take longer than many expect. The main dependency is the timing for gaming to drive past the early adopter phase of VR. And there are also technology needs specific to VR, such as vision processing and artificial intelligence, that are required for an “out of the box” consumer experience and to cut down on the physical strains (e.g. headaches, dizziness) of the medium.

In a bit of irony, VR vision processing pioneer Movidius started out as, you guessed it, a vision processor for 3D TV. The Ireland-based company recently celebrated its 10th anniversary, all the sweeter knowing that this time around the odds are in their favor. I suppose Mobile World Congress got it right after all: Mobile is Everything. Mobile VR, that is.