When you look at the subject of Virtual Reality, you should really decide which of two, or possibly three, things it is. Is it a product to make money now? A future product which is currently way too expensive to bring to market or is it going after a sub-market in say Augmented reality, which is really quite different.
Today people treat these things very differently and headsets which require separate viewer tracking devices to orient them and which show 360 video, is to us an unprincipled money snatch, gimmicks in in the early market.
Faultline Online Reporter has talked about the early market as a “rounding error” on the cellular smartphone market, until a real device comes along which allows us to operate without an opaque phone strapped to our heads.
That only really allows us to sit still in a confined space and turn left and right. While it might be used to play a game, it’s not a work environment or one that we can use to consume video or any other media. So this limits the market to about 50% of existing habitual gamers and as such it is price dependent.
For a generic virtual experience we are going to need a “Mixed Reality” environment, a term coined by Magic Leap, which was taken up this week by Microsoft, to show its intent in the market.
Mixed Reality is the projection of images, let’s call them Holograms, into your normal view of the world. You can see your desk, phone, work partners, but you can also see virtual artifacts. In principle the device which enables this should end up cheaper, because it is doing less rendering and so perhaps less processing.
But that’s not strictly true. Inserting a realistic “thing” into your world requires a lot more subtlety. It has to have the same level of lighting, the same amount of shade as the background, and it must move in the correct parallax with the rest of the room as you move around it. In a world where the entire reality is rendered, those calculations are easier.
In the long term, 3 to 5 years out, maybe longer, mixed reality will be cheaper on resources – not that cloud processing resources are going to be expensive then anyway. Almost certainly the device will appear as a pair of glasses, and that’s ostensibly what Magic Leap is working on. This week it opened a funding round which it hopes will end up raising it $1 billion, and so far has secured $502 million of that for continued development of its entire Mixed reality eco-system. The promised money comes from Temasek the investment arm of the Singaporean government. Other investors include, EDBI – a Singapore-based global fund, Grupo Globo from Brazil, and Janus Henderson Investors.
They join previous investors which include Google, China’s Alibaba Group, Fidelity Management and Research, JP Morgan Investment Management, and Warner Brothers and to date it has raised around $2.4 billion on a valuation of $6.5 billion. If it gets to $1 billion for this round, it will be closer to $2.9 billion.
Microsoft on the other hand has this week launched a foot in both camps. It decided that it should use the term “Mixed Reality,” in preparation for when its Hololens is offered to the world at large. The Hololens is only out in an expensive version for developers and has been around for a year.
Microsoft effectively “braced” its Windows 10 operating system with an upgrade it calls the Creators Update, so that it can better handle both VR and Mixed Reality processing, and at the same time it has convinced hardware vendors to launch a handful of compatible VR headsets.
PCs and Gaming Consoles are probably the two fastest devices at processing high resolution graphics, and Microsoft has moved to ensure it’s in the “getting revenues now” box, as well as with the Hololens, it has ticked the “being ready for the future,” cluster or products.
Most of the main PC makers are creating Windows Mixed Reality headsets although they are actually VR headsets (meaning the whole view is rencdered and you cannot see through them). The idea is to try to take away from the smartphone market the idea that they will automatically inherit VR and all derivatives of VR.
Acer, Asus, Dell, HP, Lenovo and Samsung are planning headsets and the lowest price will be $299. Unlike the HTC and the Oculus headsets which need tracking pillars to follow your movement, all the tracking support is onboard with these. This suggests that the accuracy of the tracking will be somewhat lower, to go with a step down in graphics capability. Experienced gamers might not give much for these, but what about a next generation of gamers?
For instance the GPU inside these devices is the NVidia 960, roughly 65% as powerful as the bottom end Nvidia GPUs which are needed to drive the Oculus Rift and HTC Vive.
If anything these devices lower the price of entry for experiencing true VR, because they will work with most existing laptops. These will be profitable, they will allow low speed games to render and undercut the $500 Vive and Oculus, which require a top end PC. The Playstation VR will still be cheaper, but only works with a PlayStation 4.
So this really places these devices at a kind of half-way house between gaming consoles and smartphone implementations, in terms of graphic quality. The high end is left perhaps to Oculus Rift and HTV Vive, accompanied as they must be by top end desktop PCs with super-fast graphics acceleration.
But this is still a long way off the quality of imagery that is possible on a Microsoft Hololens or on the Magic Leap light field display and given the indolent way Magic Leap is coming to market, there seems to be more problems there to overcome, and still get pricing down to the type of impulse purchasing levels which are driving the gaming market.
Recent leaks from Microsoft suggest that it is working on an AI chip to go with the launched of its next generation of Hololens, the one meant for consumers. The idea is to build in basic image recognition to identify what the user sees and hears and even recognize objects without using the cloud or having an internet connection. However that may be as far away as 2019, and the CEO has talked about it being a 5 year journey.
Doubters believe that Magic Leap has hit problems in making its display work properly and on available batteries. But we’ve never seen $500 million given away without due diligence.