Omdia's view: The boundary between AR and VR will become increasingly blurred- Virtual reality (VR) is gradually moving towards the mass market, driven primarily by Meta’s (Facebook) investment in developing the technology and lowering the price of standalone VR headsets (i.e. Quest 2).
- Meanwhile, smartphone-based augmented reality (AR) is laying the foundation for rich head-mounted AR and MR (mixed reality) experiences. App developers honed their AR skills on mobile AR, while Pokémon Go and face filters on social media apps gave the masses a taste of AR’s capabilities.
- AR glasses and MR headsets are currently used almost exclusively in enterprise applications, but more compelling consumer-focused AR and MR headsets are on the horizon.
- The blurring of the lines between AR and VR is inevitable, and Omdia expects more obvious mixed reality examples to emerge in 2022, including passthrough MR headsets.
- VR still has a long way to go before it can be widely adopted by consumers, with only 2.3% of households in the leading 32 countries expected to own a VR headset by the end of 2022, according to preliminary forecasts from Omdia.
- Meta will be in a dominant position as the Metaverse drives rapid development of VR in 2022. Meta is poised to become a dominant player in the Metaverse due to its growing user base, mature content distribution platform, and upcoming Horizon social VR platform.
- MR will put us on the path to AR. AR headsets are still a ways off from mass adoption - so in the short term, developing passthrough MR will create valuable applications. Rather than using new see-through optics, headsets use a non-transparent screen to display a live view from an external camera, giving a fuller field of view and better quality.
- As Meta lays the foundation for its Metaverse, the role of advertising in VR will grow. VR content revenue may already exceed $1 billion in 2020, but this will still only be a small fraction of total media and entertainment revenue. VR and the Metaverse will need advertising to realize their revenue potential.
- Non-gaming AR apps will break the app store mold and surpass games in consumer spend. In the broader app market, games are the primary driver of app store consumer spend, but in the mobile AR space, non-gaming apps have become the primary engine of consumer spend growth and will surpass game revenues from 2022.
- Gamified health and fitness will become the new target of mobile AR games. In the coming year, AR game developers will focus more on gamified health and fitness applications to find mass market opportunities beyond Pokémon Go.
Recommendations for Hardware Manufacturers- Meta's aggressive loss-leading hardware strategy will make it extremely challenging for players to compete in the consumer space. Other headset manufacturers will continue to struggle to offer competitive headsets at the low price points Meta has currently achieved. Therefore, they should focus on other areas, such as enterprise VR or new (or specialized) consumer use cases.
- Passthrough VR headsets will serve as a short-term replacement for future MR experiences. Instead of using new see-through optics, VR headsets use non-transparent screens to display the real-time view from external cameras, allowing for a more complete field of view and better image quality.
- AR can support some of the most engaging experiences on mobile screens, and to do so, it needs to take advantage of some of the most compelling features of smartphones, such as cameras and microprocessors. Device manufacturers should use AR more to highlight the differentiation of their products. Building some apps that support native AR experiences into mobile phones is an effective way to demonstrate the most cutting-edge capabilities of the device.
Recommendations for content providers and developers- Built on Meta’s VR platform, VR content providers should prioritize offering games or other VR content on the Quest Store, as Meta’s headsets (led by the standalone Quest 2) will account for more than half of the total active installed base of consumer VR headsets worldwide in 2022.
- 2022 won’t be the year AR headsets go mass market, but there will be devices released that will give developers a clearer view of what’s possible. Early devices may not be mainstream yet, but development experience in Facebook’s Spark AR, Google ARCore, Apple’s ARKit, Unreal, or Unity’s cross-platform AR Foundation will lay the foundation.
- All media players should consider their approach to VR advertising. While games will represent the most direct route to market for VR advertising, the metaverse vision of Meta and its peers may extend beyond that and into other media sectors.
Recommendations for manufacturers, platforms and service providers- Demand for multiplayer gaming and social VR experiences will continue to grow. Interest in tools for virtual collaboration, training, education, design, and healthcare will also increase, so special attention should be paid to increasing the maximum number of concurrent users and perfecting the interactive elements of the virtual experience.
- The new types of immersive experiences and interactions enabled by passthrough MR headsets mean new platforms are needed. The hardware will enable platform development, and taking the lead through new platforms is key to staying relevant, even in an open metaverse.
- Adtech vendors will be responsible for laying the infrastructure for accurate targeting, measurement, and delivery of VR ads across the device and platform ecosystem. Vendors should prioritize accurate attribution and measurement, but also consider building advanced features in VR ads that go beyond what is possible in the real world—i.e., VR OOH ads that support shopping.
Source: Omdia |
