Eavesdropper: The reality is much different

Time’s come for alternate reality tech to take off; companies must work on innovation and pricing

On Tuesday, Microsoft, during its Build 2020 conference, announced that it would be taking its HoloLens 2-$3,500 mixed reality device-to more markets and will be incorporating 5G support and more services to its Azure mixed reality cloud. The company launched the product six months ago, so a mid-year expansion means that it is generating interest amongst enterprise customers-Microsoft has not released data on sales. The company also plans to sell the product via its store for technology enthusiasts and small businesses. Microsoft, however, is not the only big tech platform gunning for a mixed, virtual, augmented reality market.

Last week, Apple announced its first significant acquisition of a virtual reality company, NextVR, which is engaged in creating VR content for reality events. The acquisition comes at a time when Apple is inching closer to launching its AR and VR headset.

While alternate reality technologies have been in the market for long now, interest around them has waned. A Google trend report on virtual reality shows that technology has not been able to evade much interest over the last three years. Besides, search results are not to be blamed. The last big story in VR was the acquisition of Oculus by Facebook in 2014, ever since there have been spurts, not sustainable beyond a few months, owing to either product announcements or gaming apps. Pokemon Go, for instance, was able to attract user attention, but the euphoria around AR was short-lived. ARmojis by Apple and Google have gone the same way. Inaccurate representation and non-availability of devices have translated into limited takeup.

Investments in the industry have also declined. A report from Venture Beat shows that deal size and volumes in the first quarter of 2020 were the same as in 2013. Emojis alone cannot lift alternate reality out of slumber. Pandemics, on the other hand, are a different ballgame. As people are forced to stay at home demand for VR is rising again. The single biggest driver is the exhibition and conference industry. Lockdown has forced companies to abandon plans for conferences. Most have happily shifted to webinars, but the appetite for a better experience is growing, and this is where virtual reality can come into play. Then there are consumer segments like experiential shopping, which can provide a further fillip.

But all this may only be plausible if VR companies get innovation and pricing right. Although the technology is still in place, it is not perfect. Innovation has only allowed us to come so far; tracking is still not absolute. Move your head too fast, and the reality gets blurred. Eye-tracking has undoubtedly improved but again suffers from the same limitations. Facial expression tracking, this uses infrared to track facial muscles, is far from developed.

Two, even if companies do get technology right, pricing is another problem. The cheapest product in the market is Oculus’s strip-down version at $185. The next VR accessory is $400 more expensive. So, there is not much consumer traction. Even if some of the high-end customers do buy at these outrageous prices, pricing will exclude everyone else, limiting the prospects for the VR industry. Cardboard solutions cannot be a permanent feature.

Even if companies do get innovation and pricing right, bandwidth is a major hurdle. Most developing economies are struggling with internet speeds. In such a scenario, asking consumers to take up VR/AR devices will mean investing in expensive paperweights.

Unfortunately, today’s capitalism does not have a Schumpeterian appetite for creative destruction. Innovation is not the only driver. And, until companies do not solve these challenges, alternate reality devices would not go further.

ishaan.gera@expressindia.com