Virtual Reality and Virtual Currency

The main trends in the IT industry at the moment are VR/AR, artificial intelligence, and blockchain technology with cryptocurrencies. In this material, we will look at the benefits that can be derived from the combination of virtual reality and blockchain.

Market: Players

VR/AR departments have been functioning for some time at Sony, HTC, Apple, Facebook, Microsoft, Google, Amazon, Samsung, etc. VR-headsets have been released by Facebook, Sony, Google, HTC (in tandem with Valve) and Samsung. These are the main companies with products in demand. In general, the market is filled with offers from dozens of manufacturers (mostly cheap VR-glasses, using your smartphone as a screen).

The main driver of market growth is video games. Of course, VR/AR/MR is actively used in education, cinema, medicine, real estate, tourism and advertising, as well, but outside the main focus of the industry. Creation of a new video game franchise especially for VR Electronic Arts and Activision, the leading publishers, is estimated at $75–100 million. This is the reason the “whales of the market” are not in a hurry to risk cautiously probing the market.

For example, Bethesda Softworks has transferred to its virtual reality focus to its bestselling series The Elder Scrolls, Doom, and Fallout. In this case, Fallout 4 VR through Steam was purchased by every owner of HTC Vive registered in the system; the result is impressive.

Their experiments in VR were presented by Rockstar Games, Ubisoft, Crytek and Epic Games. In Russia, corresponding projects were demonstrated by Mail.ru and Nival. The popularity of the PlayStation VR has been enhanced by special game modes built in by developers in Rise of the Tomb Raider, Resident Evil 7, and Tekken 7. In just a year after its launch, Sony has sold 2 million copies of PS VR and 12.2 million helmet games.

However, most of the games in the virtual reality sector are not blockbusters at all, but instead, content from independent studios demonstrating technology, rather than immersing users in fictional worlds. In addition, short VR games are gaining popularity in promoting many products. For example, the famous British director Ridley Scott produced the game The Martian VR Experience to release in support of the film Martian.

The Market in Figures

Goldman Sachs estimates the audience of PC gamers at 150 million on consoles, with 230 million via Internet broadcasts on Twitch, and YouTube totalling 1 billion. By 2020, the audience for VR games will be 70 million people, and five years later, 216 million.

At the beginning of 2017, 18 million VR points were sold globally, and 50 percent of the volume were simple headsets like Google Cardboard. IDC predicts that in 2018, 12.4 million VR/AR-headsets will be sold. This increase will likely follow Oculus lowering the price of the Rift helmet (complete with Touch controllers) to $399 and HTC Vive lowering to $499. Both manufacturers recently introduced new versions of their headsets — a simplified Oculus Go ($199) and advanced Vive Pro ($799).

Considering a profit of $90 million in 2014 in the virtual reality sector , Statka predicts sales of $5.2 billion for 2018. By 2021, spending on goods and services in VR AR, according to various estimates, will reach $100–200 billion.

The interest of investors in the described area is constantly growing, as well. Looking at just one startup — Magic Leap-for the years of its existence, a total of approximately $2 billion was invested. In 2014, Facebook bought the company Oculus Rift for $2.3 billion and now believes the future of social networks is virtual reality. (In fact, Mark Zuckerberg is already developing a similar platform under the name Facebook Spaces).

In 2016, the volume of venture and corporate investments in VR and AR topped the bar at$2.3 billion, according to Digi-Capital. In Russia, there were a number of high-profile deals, as well. For example, the educational service MEL received $2.5 million from Sistema VC. In 2017, VR/AR saw investments of about $3 billion.

This year will be even more revealing, including a number of point successes such as the “indie” VRChat game that suddenly became a real social phenomenon with memes discussed across the Internet. Simultaneous online VRChat peaked at 20.2 thousand people, andin recent months, VRChat has drawn an average of 5.4 thousand people (CCU).

VR Plus Blockchain

To date, several start-ups have tried to combine VR and blockchain technology in a single product. Here are the most striking examples:

• Decentraland (Argentina). Blockchain is used to fix, exchange, and monetize content in VR, allowing participants to literally buy and sell land in a virtual universe and also earn on their own content. Authors of Decentraland are confident that, eventually, gamers will switch to platforms belonging to the gaming community as a whole, forgetting about the game worlds created by corporations.
• Gaze Coin (Australia). This startup is working on software that allows brands to evaluate the effectiveness of advertising campaigns in VR. Gaze Coin Software, for example, can calculate how many times the user looked at the block with sponsorship content.
• Ceek VR (USA). Initially, aVR content distribution platform, the service is now on a block, with tokens opening access to pop star concerts, sports matches, etc. Users need only to put a helmet on their head, and they are at the epicenter of a musical show.
• Blockchain 3D Explorer (UK). The so-called “columnist observer.” With this application, users will be able to get acquainted with the details of the bitcoin in VR (or simply in 3D on the monitor screen). The main goal of Blockchain 3D Explorer is educational — resourceful visualization of data is one of VR’s strengths.

But the most interesting and large-scale in the industry is the development and ideas of VRT World, with offices in Moscow and Singapore. The company expects to launch a blockchain-based marketplace for VR. Unlike Steam, the platform will be oriented not only to developers and users, but also to investors. Blockchain technology will protect intellectual rights and allow the fair distribution of income between the platform and the creators of games and other applications (whereas Steam takes 30 percent of sales).

A major customer of VRT World content will be the franchised network of VR parks. The company opened the first such park, Z8, in Moscow in December 2017. The launch cost $.55 million. (A similar network with simple VR attractions related to popular films, was opened recently by American Ken Bretschneider. The Void opened with an initial investment of $14 million.)

The connection of one park costs $250,000–300,000, but VRT World hopes to reduce costs by using a franchise model and a blockchain system that will allow transfer of cryptocurrencies without national constraint.. VRT World partners from Europe acquired the rights to launch 30 parks in the next year and a half. Over the next four years, VRT World will settle in the U.S., China, South Korea, and the UAE, and the total number of parks growing to 170.

However, the VRT World project is more than the network of parks and the marketplace. Plans include the introduction of a user-friendly toolkit for developers, an emulator that will test compatibility with different VR helmets, a cybersport league (at the end of 2019), and streaming service in VR (at the end of 2020). In addition, the company will continue to improve its own Full-Body Tracking technology that allows several users to interact in VR at once. The multiplayer game Starship Troopers from VRT World uses this technology.

VR is a fast-growing market, and the use of blockchain technology will accelerate its development. This growth is hindered currently by the fragmentation of the sector due to different standards, the lack of quality applications, and the absence of a large user base assembled in one place. However, undoubtedly, in the coming years, virtual reality will become a multi-billion dollar industry.