2020 — A Turning Point For The Adoption of Augmented and Virtual Reality
According to the International Data Corporation (IDC) Worldwide Augmented and Virtual Reality Spending Guide, global spending on AR/VR will grow to $72.8 billion in 2024, up from just over $12 billion in 2020. Whilst training continues to be a leading use case for augmented reality (AR) and virtual reality (VR) adoption, organisations are turning to AR and VR for many other reasons as a result of the global pandemic.
2020 has become a major turning point for the adoption of augmented, virtual, and mixed reality. The pandemic has driven an uptick in these technologies as many enterprises and organisations realise that new processes and practices are needed in order to survive now, and in a post-COVID world.
Augmented reality, in particular, is enjoying solid growth. This can be attributed to certain industries — like travel and tourism, retail, advertising, and education — embracing the technology, plus an increase in online gaming activities, during the COVID-19 pandemic.
Another important factor driving growth is the size of mobile AR’s installed base of smartphones. AR faces fewer growth challenges, compared to other immersive technologies, such as virtual reality or mixed reality glasses, as it utilises ubiquitous hardware. Facebook is projected to have 1.58 billion AR compatible smartphones by the end of 2020, followed by ARkit (1.19bn), TikTok (950 million), ARCore (633 million), and Snapchat (240 Million). The largest platform of all, however, is web AR at 3.04 billion compatible devices.
Brands are capitalising on this appetite for AR and the current boom in e-commerce sales, with leading e-commerce platform Shopify claiming that, “interactions with products having 3D/AR content showed a 94% higher conversion rate than for products without AR/3D”. Brands such as Bethesda, Allbirds, and Rebecca Minkoff are using 3D models and AR to increase conversion rates by up to 250% on product pages.
Social AR lenses are trending up as millennials and Gen Z-ers turn to them to ease lockdown boredom. Just a couple of months ago at Facebook’s Connect event, it was announced that Facebook had reached 1.2 million AR experiences and lenses created on its SparkAR platform. This equates to over one billion views in total.
Whilst there is a lot of positive data out there for the growth of mobile AR and Web AR, we are still a while away from everyone walking around with AR glasses. A SuperData report showed that widespread consumer adoption of AR/MR headsets is not expected to take off until at least 2023. Without enough headsets out there, developers are not making content for them. Adobe’s head of AR, Stefano Corrazza, says, “headsets are on our roadmap. None of them have reached the critical mass that makes sense for us to deploy…Until we have an Apple or Google putting something out there in broad scale, it doesn’t make a lot of sense for us to push it out.”
In the meantime, there are phones. Smartphones, like the recently launched iPhone 12 Pro, are the focus for the likes of Apple and developers right now. However, as Corrazza points out “even with a headset, the phone will be where all the computation happens. And you can stream to the glasses potentially.”
In regards to virtual reality, it’s never been more popular. The pandemic has bored millions, and as we look for new distractions, there has been a significant spike in audiences streaming VR content and watching 360° video. With no distractions from social media or TV broadcasts, virtual reality really can provide a means of escape from the current confines of our reality. But it’s not just the entertainment side of VR that is seeing an upswing.
As WFH becomes the new normal, VR communication and training platforms are seeing a huge increase in usage. One of the biggest benefits of the medium is its ability to make people feel like they are in the same space together. These virtual environments can be designed for optimal comfort, productivity, and creativity. You can share and work together in real-time in a truly collaborative manner. You can import custom environments or 3D objects, and you can work together via interactive whiteboards. Participants can also revisit simulations to better process and record the content.
The renewed interest in virtual reality has definitely been helped by the release of Oculus Quest 2 in October. Sales of Quest 2 surpassed expectations, with pre-orders more than 5x those of the original Quest. Many developers have seen an increase in app usage since the device was shipped. For example, social VR app, VRChat, recorded its highest number of concurrent users — 24,000 — over Halloween.
The release of Half-Life Alyx, and other major titles, has increased PC VR earnings. In fact, this report states that PC VR game earnings are on track to rise 119% year-over-year from $86.1M in 2019 to $189M in 2020. Since its release in March, first-person shooter, Half-Life Alyx, has earned more than all the PC VR games combined made in 2019 and has remained firmly at the top of the bestsellers list.
With solid, affordable hardware and compelling content, virtual reality is pushing into the consumer market, but it’s still a long and winding road as VR headsets are not yet everyday items. In the meantime, our smartphones are becoming more spatially aware and transforming into world-scanning devices as AR becomes seamlessly integrated into our lives.
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