The Immersive Generation

VR is inevitable. Just get out of the way and let the kids do their thing.

Entrepreneur: I have something I’d like you to check out.

Old dude: Why would anyone want to do that?

Entrepreneur: 😶

Millennial: Ooh, VR! Let me try!

If it’s true that VR is dead, then the thousands who attended Oculus Connect 5 must have missed the memo.

The annual developer conference, from the opening keynote to the final sessions, showed the company’s continued commitment to building a global infrastructure to get a billion people into VR. Being part of Facebook, they’re obviously playing a long game, and they seem determined to get this right.

1B people in VR. How we doing on that?

There’s been a lot of coverage on the conference, so I’ll skip my own roundup. Personal highlights include: being super-pumped about Oculus Quest, the $399 6DOF standalone headset that will ship early next year with 50 launch titles and big studio IP; Facebook’s continued emphasis on the Web being a “big deal” for VR; and Unity’s new Scriptable Render Pipeline, which I had the privilege to present on during the event. From my vantage point I think the conference showed that we’re raising the bar along all axes: portability and comfort, openness and accessibility, and must-have user experiences.

I’m in the five-timer club; I’ve been to every Oculus Connect. The energy of this year’s event reminded me of the giddy vibe of OC1, that feeling that we’re changing the world; except that now we’re all grown up. I spent most of my conference time with the people who are making VR happen: the designers, coders, producers, directors, teachers and entrepreneurs toiling every day to build the virtual future. Folks seem as determined as ever to keep grinding away until immersive computing is a part of everyday life. It was so uplifting and inspirational.

So, I’m finding it hard to square my experience at Oculus Connect, and a year of mind-blowing VR that kicked off with Sundance New Frontier, Tribeca and Augmented World Expo, with a general perception that VR is in the doldrums. But I’ll try.

The Slippery Slope of Enlightenment

Anyone watching the industry closely knows that this year has been rocky for VR, at least from the point of view of market perception. The expected hype backlash has happened, and a rush to phone-based AR, driven by the promise of scale, has sucked a lot of the air out of the VR conversation.

1. Consumer VR headset adoption is growing, but slowly. PSVR adoption is chugging away, but the total cost of ownership is still quite high for PC-based systems like the Oculus Rift and HTC Vive. As such we’re still in the single-digit millions of units for high-end headsets. On the plus side, we’ve had our first bona fide hits like Beat Saber. But given the ergonomic issues with wires, HMD form factors, and labor-intensive setup, there is still a lot of friction.
2. VR is seeing uptick in location-based and enterprise markets. These have neither the cost-sensitivity nor friction of consumer high-end VR, and they have the most obvious and immediate value.
3. AR is ascendant. Interest has been driven by last year’s release of smartphone-based AR, along with a handful of utility applications from Lowe’s, IKEA, Amazon and other retailers, and high-profile games like Harry Potter and Jurassic World. Lured by the size of the addressable market for smartphone AR— predicted to hit a billion handsets across iOS and Android— creators, entrepreneurs, investors have shifted emphasis to AR over VR.

There are two other trends that are hard to quantify. First, 2018 showed us the best VR content ever (more on this below). Second, there was the introduction of standalone headsets: portable, untethered VR devices at an affordable price point. The jury is still out on these new devices, because we don’t have enough historical market data — and also not enough deployed content, since the platforms keep moving the goalpost on creators. But these are both encouraging developments.

Given the continued growth and other signs of life, it would appear that — to use terms from Gartner’s Hype Cycle — we are pulling ourselves out of the “trough of disillusionment,” and have begun a steady climb up the “slope of enlightenment.”

But investor perception is that VR is in a nuclear winter, and most investors that I talk to privately won’t bother even looking at a new consumer play this year. The exuberance of 2016–2017 has been supplanted with chilly caution. Conventional wisdom is that “AR is going to be much bigger than VR,” and investors have adjusted plans accordingly. Even though the picture is more nuanced, the outlook tends to be binary: it’s not VR, it’s AR; VR is for enterprise, not consumer, and so on. Understandable, because these folks have to put large amounts of money to work, and they only have so many hours a day, so they have to fast-filter.

And therein lies the problem: when it comes to consumer anything, investment is the backbone. Consumer tech can’t get a foothold without significant capital investment. If investors aren’t bankrolling consumer VR, then content creators and app developers likely can’t pursue it. Some creators give up; some take production jobs to keep the cash flow coming; and others have pivoted completely to AR to chase that bigger market and tap into the flow of investor dollars. Only a stalwart few stay the course. As a result, innovation grinds to a halt, reinforcing the perception that nothing’s happening, and the whole thing becomes a self-fulfilling prophecy. Which is where we are now.

If it wasn’t for Facebook still leaning in hard, I would probably be questioning my own outlook on the near future of VR. But Facebook is leaning in. If we don’t climb the slope of enlightenment ourselves, they seem determined to pull us up with them, one slippery step at a time. I take comfort in that.

That, and because VR is inevitable.

Why We VR

I am part of the generation that built the Web. When we started, we didn’t know where it was all going. We couldn’t have predicted eBay or Amazon. We didn’t see mobile coming, or social platforms like Facebook and Twitter. We didn’t have market data or proof points to inform us that we were on the right track. We did it because it was cool, and because we knew it was the future. We were convinced that, if we all got connected, amazing things would happen.

By and large, we were spot-on. But if it hadn’t been for a brave few investors backing the vision, the Web wouldn’t have happened. (And you wouldn’t be reading these words right now.) The Web went through its own boom and bust cycle almost two decades ago, and emerged bigger than before. And now, it’s everything.

Though it looks like it’s going to follow a longer, weirder trajectory than the Web, immersive computing seems to be on a similar path. Yes, we’ve got hardware adoption to contend with, but that was true of the Web as well: it coevolved with the personal computer and smartphone. XR seems to be doing the same, per the trends listed above. Full immersion in VR will take root in the enterprise and out-of-home before there are strong sales into the living room, while most consumers’ first taste of immersion will come in the form of AR they see via the device already in their pocket.

It is debatable whether or nor VR and AR systems (and MR headsets like Hololens and Magic Leap) will eventually converge into one uber-device, as hinted at by Oculus’ Michael Abrash during the OC5 keynote. Even if they don’t converge, such devices will live on a continuum of immersive computing: from full escape in VR, to a world painted with data in AR, to a seamlessly blended mixed reality that someday truly challenges our notions of what is real. It’s all about immersion; it’s just a matter of degree.

The millennials know this, even if us old-timers aren’t quite sure. Investors are an overly analytical bunch (have to be), and somewhere along the line, even the most open-minded and childlike of us veteran entrepreneurs lose our innate sense of what’s cool and where the world is headed. So we have to take our cues from the new guard.

Jaroslav Beck knows it. Beat Saber is the first breakout VR hit that is native VR. Fully haptic and thoroughly addictive, Beat Saber is Dance Dance Revolution for a new generation, and it’s the bomb. Maybe, hopefully, Beat Saber’s commercial success will finally put the ever-tedious (and always specious) hunt for a “killer app” to rest… and the skeptics can move on to their next set of objections.

Eliza McNitt and Jess Engel know it. Spheres takes you back to the birth of the universe, in a series of experiences that are both informative and sublime. While it’s still early and not yet definitive, studies suggest that spatial learning is a better, more permanent form of learning. So, as science education goes, Spheres could be a breakthrough. Regardless, when it comes to science as storytelling, the series hits the nail on the head. In the grand tradition of Carl Sagan’s Cosmos, Spheres brings us closer to the wonder of creation. To me, Spheres is why we VR.

Sophia Dominguez knows it. Her company SVRF is so confident that immersion is the next wave of computing, that she is heavily investing in indexing all the immersive content in the world. SVRF knows that immersion comes in all forms, from VR to MR to AR, and across all devices. Wisely, their go-to-market reflects the reality of the smartphone today. They go where the consumers are, and right now the numbers are in lenses, filters, and 360 content on phones. But SVRF is keeping their eyes on the longer-term prize, and when the time comes that people have an everyday need to discover and share the best immersive content, SVRF will be well positioned.

These are just a few of the innovators pushing the medium forward. Of course, not all of the leading lights in the field are under thirty-five years of age. But a good many are, and this is where the energy is coming from. To them, immersive computing isn’t an if, it’s a when. It’s a given that with VR, we will learn better, retain more, find more relevant information, live more fully, understand each other better, and be more productive. They don’t have to think about it; they know it. They bellyfeel it.

Thus has it ever been. At some point we have to concede that the new generation is driving things. For VR, the Immersive Generation is in charge, and their time has come. So to the geezers, the pencil-necks, and the naysayers, I have a favor to ask: please GTFO the way and let them build the future. And if you can help them, help. Even if you don’t quite understand what’s happening yet.

Because they do.