Google Chief Game Designer Noah Falstein has been making games long enough to have lived through every iteration of the promise of virtual reality (VR). But with Sony, Google, Microsoft, Facebook, Nvidia, HTC, Samsung, Intel and other big companies investing billions of dollars in VR, that promise is finally being realized.

“With Samsung Gear VR and the upcoming Oculus Rift, HTC Vive, and Sony’s PlayStation VR, we have VR displays, input, and motion sensing hardware that’s high enough quality to really jumpstart the medium,” Falstein says. “That’s a big change from a couple of years ago when this was all getting started. The combination of super low latency and high frame rate in VR display devices together with exact position tracking input, puts you there in the world. It changes everything. That means that we are past the starting line.”

Falstein admits that at first this is going to be a small industry, but he believes VR will experience rapid growth and adoption powered by excellent hardware and software that explores and defines the way that people interact with the medium. “It’s real and it’s going to be a major business from here forward,” he says.

HTC, which delayed the consumer launch of its SteamVR-powered HTC Vive until early 2016, is still going to be first to market in the PC market. (Samsung Gear VR is already available in the mobile space.) HTC has partnered with leading independent developer Valve to encourage game developers, and also connected with Hollywood studios like HBO and Lionsgate to embrace interactive VR. Jeff Gattis, executive director of global marketing for connected products at HTC, believes the game and entertainment industries are still experimenting with VR.

“It’s going to be interesting to see how things evolve in the VR environment,” Gattis says. “We share Valve’s philosophy in allowing developers and storytellers to create what they want by offering them a blank canvas that they can paint.”

According to Tim Merel, managing director of Digi-Capital, by 2020 the virtual reality industry will generate $30 billion. Piper Jaffray forecasts sales of 12.2 million VR head-mounted displays (HMDs) in 2016. Oculus Rift is expected to account for 3.6 million of those headset sales, HTC Vive is forecast to sell 2.1 million units, Sony PlayStation VR 1.4 million headsets, and Samsung Gear VR five million portable headsets.

John Koller, vice president of marketing at Sony Computer Entertainment America, believes PlayStation VR has an advantage over the competition because of its global installed base of more than 25 million PlayStation 4 consoles. He also adds that Sony has its Worldwide Studios teams working on original VR game content like Sony Japan Studio’s The Playroom VR, Sony London Studio’s The London Heist, and Guerrilla Games’ RIGS: Mechanized Combat League. Additional exclusive games include Rebellion’s BattleZone and Crytek’s Robinson: The Journey.

“VR is great for gaming because it gives you a full-scale view of your place in the environment and that sense of presence that everyone likes to use,” Koller says. “VR takes over the two senses that you use the most—vision and hearing—and it tricks the brain into thinking that you’re in another environment.


Augmented Reality

Digi-Capital is even more optimistic about augmented reality, which it forecasts to generate $120 billion in revenue by 2020. Merel believes the billions of smartphones on the market open up the opportunity

for software makers to capitalize on that technology, which blends digital images with the real world through a phone’s camera.

Microsoft has hedged its bets on both VR and AR. The company has partnered with Oculus VR to include its Xbox One controller in every consumer edition retail package and also is offering plug-and-play Windows 10 connectivity and the ability to stream Xbox One games inside Oculus Rift. On the AR front, Microsoft is developing HoloLens, a wireless visor device that allows consumers to play games like Minecraft on the wall or on a table in full 3D.

“Windows 10 is going to be a great platform for augmented reality,” Mike Nichols, chief marketing officer at Xbox, says. “HoloLens is one device that shows that off, so that’s why we built it.”

One of the mysterious players in the augmented reality space is Florida startup Magic Leap, which has raised $592 million from companies like Google, Qualcomm, Warner Bros., and Legendary Entertainment. The company has designed a Dynamic Digitized Lightfield Signal, which generates images indistinguishable from real objects and then can place those images seamlessly into the real world. Ready Player One author Ernest Cline says Steven Spielberg and Warner Bros. Pictures may use this technology for the film adaptation of the bestselling book that’s in production.

Legendary Entertainment CEO Thomas Tull believes Magic Leap is the fi rst medium that he’s seen that has the opportunity to be truly transformational.

“Most of the improvements that we’ve seen in home entertainment have been display devices going from standard def to high-defi nition, 3D, 4K, and beyond, but all of those things are really just significant enhancements of the ways we view content and experience things,” Tull says. “As a tech investor I’ve seen variations of this over the years and the reason I invested in Oculus is that was to me a quantum leap. Oculus did things that were very special. And then with augmented reality and the way we interact with the world with instantaneous information, it’s not just for entertainment. It’s a completely different way of potentially experiencing things, and that’s why I invested in Magic Leap. There is a lot to learn and there will be bumps in the road, but it’s a really exciting medium and something that I’m pretty passionate about.”