The Future VR, AR and MR in Gaming, and Their Impact on Socialization

The reality-enhancement technology (as we call it) has seen steady advancement in the recent years. As more and more people engage with this tech, we are eager to share the thoughts and insights we’ve collected. But before we dive right in, let’s first make the distinctions clear between virtual, augmented and mixed realities.

What is Virtual Reality?

Despite the fact its history of origin could be traced to long before film had been invented, it is thanks to sci-fi movies, books and video-games that people became aware of the VR concept en masse. And although movies in 4D are a becoming better month by month, the Gaming industry is naturally the main driver of progress in this technology.

Ultimately, VR is a means to enable a deeper immersion of a person into the virtual picture. This is typically enabled by a headset, which transmits information from the digital world to the person wearing it. These headsets provide a much wider field of view than any monitors out there. Thanks to that, they are able to transmit the image and sound in 3D format. This allows for a deeper immersion, something that other gaming devices like joysticks, mouses and keyboards can not provide.

What is Augmented Reality?

AR, short for augmented reality, in its simplest form is a technology that can process a picture or a video on your phone and overlay a digital image over it. Made popular by Pokemon Go, it has become a part of everyone’s everyday life through face filters on Instagram, Facebook’s ability to tag your friends on photos and Apple ARKit’s ability to paint virtual objects with lightning and contrast adjusted to their background. The main conceptual difference of AR is that it is a software innovation, unlike VR. It relies on machine learning mechanisms, and not on the hardware.

What is Mixed Reality?

In a nutshell, MR is not a separate piece of software or hardware innovation, but rather an intersection of AR and VR. Think of MR like a horizontal spectrum, on the left side of which is VR, and on the right — AR. Anything in the center, (things like HoloLense and Magic Leap) are just combinations of both. A popular opinion suggests that MR is just a label which adds confusion, but little of value. In the end, if something uses special hardware, (like a headset) it’s VR. If it just overlays digital data over imagery, it’s AR. And to segment things in between, you can borrow AR∩VR and AR∪VR from the Set theory.

But which one’s better for Gaming?

With no doubt, VR is the most promising tech for eSports, as projects such as VRChat gain traction. However, there are still some (solvable) problems on its way to having a strong position in the market:

• There are no perfect wireless VR headsets yet, all of them still have cables attached.
• This, however, will be solved easily whenever 5G comes online.
• The playerbase is relatively small
• First solution coming to mind is, obviously, to make the hardware cheaper. But this would require a good couple of years (if not a decade) of technological advancement and cost optimization.
• Lack of monetization
• When looking at profitability of running VR games, many, if not most game-developing companies see little economic incentives. It is literally better to be making casual games on mobile and allocate resources into tinkering with the UAC/LTV variable than get into VR at this stage.

From our point of view, the future lies in creation of playgrounds for competitive game modes. The next step in VR tech advancement would be development of Battle-Royale and other yet unexplored types of games.

Less socializing

As of today, it is safe to say the world is facing an ever increasing problem: video-game players are less and less sociable. While the average time people in the USA spend socializing has decreased from almost 50 to less than 40 minutes from 2004 to 2016, the average daily time for playing games has almost doubled during the same period, now reaching around 20 minutes.

Why is that happening?

To make it apparent, let’s break the history of Games (in a broad sense) into three periods.

1. Before Digital Gaming. In order to play get amusement by playing games, one had to go outside, and meet with friends. Yet, the number of “Single-player” games was very limited.
2. The era of slot machines and computer clubs. In order enjoy a game, one still had to go outside and meet with friends. This time, however, people had one alternative, which was to pay a visit to whoever had a gaming console. In a way, this was the peak of socialization in gaming: people gathered together in an organized fashion specifically to play.
3. The modern age. Now, people carry at least two gaming devices wherever they go: a phone and a laptop. Couple it with the fact that computers are almost universally available, and you see why socializing is no longer a thriving aspect of playing games. On the opposite, modern video games offer many in-game communication channels such as voice and regular chatting, which has made the process more agile.

Our outlook for the future

In our view, VR is not yet cheap enough to be a huge market. However, as dozens of XR products are gaining traction and popularity among the eSports and Gaming audience, and more VR clubs are being opened almost everyday in major cities — more people enjoy the benefits in additional socialization and unique experience that it brings.

Yet, currently we remain focused on MR. When this technology becomes available to mass audience, the opportunity of the gaming industry will grow immensely. We can already see games like strikeball being played with this tech, yet this is just the tip of the iceberg. Such things as gamified racing on real cars, or quests outside of questrooms will make the future a lot more exciting.

Things we see as a fantasy today will definitely soon become reality. In a popular movie “Ready Player One” all the action is in VR. However, that could be rendered into the real world using MR. For instance, one could make a city that resembles all kinds of games 24/7, and this is a concept we think is not far-fetched.

To summarize, we can say that the XR space is definitely one of the most perspective things to invest in, and will experience explosive growth over the next decade, as technology progresses and the prices move lower.

Serg Nepomyashtiy, Chief Analytics Officer of SWIDOM