techstockinsider:
By now if you’re not living under a rock, you’ve become
familiar with the revival of the Pokémon craze.
Following the launch of Pokémon Go, the popular Nintendo (NTDOY) title from the ‘90s, the tech industry is abuzz
with the virtual (“VR”) and augmented reality (“AR”) industry. Minds blown? Well not so fast. Though some
are seeing this as a “brand new thing,” augmented and virtual reality technology
has been around for decades
but hasn’t had mass exposure until this one mobile gaming app took center stage
this summer.
Even before the boom in AR was sparked by Pokémon Go,
analysts were already foreseeing a strong market for wearables and applications.
Based on data from Digi-Capital,
there has already been $2billion invested into AR/VR within the last 12 months
alone; most of which has been directed toward start-ups.
Although the majority of these companies were built outside
of a mobile phone platform, the quality and appeal are showing that a
bucketload of money is being earmarked for this pending boom. Just take for instance Google’s investment in
Magic Leap to the tune of just
under $800
million in a series C round.
The interesting part is that Magic Leap does not have a
commercialized product but the renderings are pretty breathtaking, which could
mean some very positive expansion for the industry as a whole. With big money
being thrown around to the tune of 10 figure sums (even without the Magic Leap
transaction), larger corporations are looking to bypass the “development stage”
and simply acquire or merge with some of these lesser-capitalized boutique tech
firms.
Take for instance Facebook
(NASDAQ: FB). Though the $2B investment was initially in virtual reality via
Oculus, the VR company has said that it will also be diving into the AR space
as well. At the San Jose Comic Con, Palmer
Luckey, founder and CEO of Oculus, alluded to the company’s ultimate inclusion
of AR into its portfolio and take the company beyond VR.
But it isn’t as simple as differentiating what is VR and
what is AR. A new push from companies like Microsoft
(NASDAQ: MSFT) has nudged the boundaries of this space by implementing “mixed
reality” (“MR”). Using its HaloLens, Microsoft has made it possible for VR and
AR to converge where virtual objects can actually interact with physical
objects as opposed to AR where physical objects interact with virtual
objects. Though AR is still relatively under-developed
compared to VR, proponents
like Steve Wozniak identify that AR could end up surpassing the successes that
VR has had. “Some of us just like to be early adopters and play with what the
future could be,” Wozniak stated when referencing the AR marketplace.
Keep in mind that this was back in March and all those
presenting had no idea that the Pokémon Go craze would be as wild as it has
been. And it could only be getting bigger, near term. Recently announced Nintendo NX game platform,
could up the ante for VR/AR sooner than we think. With no prominent competition
(yet), many of the larger players could be looking at Nintendo to be the guinea
pig for the mass marketplace. Keep in
mind that the image quality through the Pokémon Go App isn’t much to write home
about but the idea behind it is bringing AR to the spotlight.
The big three games that are planned for release are Zelda,
Mario, and Pokemon (the classics). Though nothing has been confirmed yet,
Zelda/Mario creator Shigeru Miyamoto has commented
that, “As for VR, we are researching not just VR but [augmented reality] and
many other technologies… In terms of NX, there’s an idea that we’re working on…That’s
why we can’t share anything at this point, and I don’t want to comment on the
other companies.“
The race is on and it could quickly come to a head for more
than just gaming systems & accessories.
Large companies are vying for market share and R&D early. Intel
(NASDAQ: INTC) is planning to unveil its augmented reality smart glass called Remote
EyeSight, at the Intel Developer Forum this month. Not much has been confirmed
directly by Intel but tech sites like PCWorld speculate
on the potential of Remote EyeSight.
“Intel’s Remote EyeSight could enable interactive remote
communication on smart glasses, kind of like having Skype on a wearable. That
could promote freedom of movement and communication, and blend in real and
virtual world scenes into video chats. In the enterprise, it could be used in
areas like repair, medicine, and education.”
Intel has also been on the acquisition path and its latest
buyout of rendering engine company, Replay Technologies, could put users of
Intel’s 3D RealSense in a whole new view of sporting events. Though the buyout price has not been
disclosed, Intel has told sources “Replay’s technology could play a role in
capturing real-world content for use in VR and augmented reality worlds.”
Intel already has a
platform that can allow consumers to create enhanced VR/AR projects through its
RealSense
product. And in addition to sensing things like depth and position, it can also
depict very impressive attributes like gesture control, 3D scanning, as well as
special recognition for applications in things like drones (so they don’t run
into buildings); probably something Amazon
(NASDAQ: AMZN) could use if drone delivery takes off (no pun intended).
Thinking outside the box also has helped begin to mold the
market for augmented/virtual reality.
Normally technology like this would only be for “early adopters” but New
York State residence could be put in the front row whether they like it or
not. Something that has changed very
little has been lottery. Whether it’s buying a ticket or scratching off a card,
the interaction is the same; until now.
A California based company, Paymaxs, has adopted AR
technology and applied it directly to a very novel and potentially game
changing product for the New York State Lottery. Their “Gold Castle” game (found at http://www.nylottery3d.com) is fully
immersive and involves augmented reality. In an exclusive interview, Liana
Kadisha, Paymaxs Chief Product Officer of Paymaxs, told TechStockInsider.com, “Gold
Castle is the first scratch-off lottery ticket with augmented reality gameplay
in the world and right now it is only available in New York. Paymaxs and the
New York Lottery have been working together for a year leading up to our July
5th launch. We’re in active conversations with other lotteries but as North
America’s most profitable lottery, we expect New York’s innovation to set a
fast-growing trend in the $292.7B global lottery market.”
It’s a clear example of how a novel idea now brings a
technology in the infancy/early adopter phase and puts it right in the faces or
a relatively “conservative” audience.
But more importantly, like Mr. Wozniak, Kadisha also believes A/R is
just beginning to become relevant, “I believe the next year will continue the
recent trend of taking augmented reality to the general public and revamping
familiar experiences with new and interesting augmented reality layers. Recent
events have quickened the education of users and have brought a sense of
urgency to funding and product development cycles for further innovation.”
Outside of these companies making headway, this isn’t to say
many other household names aren’t looking for ways to apply this “new
technology”. From Car
companies like Ferrari (NYSE: RACE), Ford (NYSE: F), and General Motors (NYSE: GM), to entertainment
& media giants like Disney (NYSE: DIS),
Comcast (NASDAQ: CMCSA), and even airlines
like Emirates are
taking a stab at the new reality of AR.
“Over the next few
years, as people get more comfortable with using augmented reality, we will see
more sophisticated interfaces and exciting uses of the technology. It is clear
that users are ready for augmented and virtual reality and that it will be a significant
part of our future,” said Kadisha.
Though these are still the early stages for AR and VR,
incubators and large corporations are still looking to raise significant
funding while also continuing to dive into the world of M&A. This is a new
advent of a technology that up until now has not really been in the public eye.
Now that Pokémon Go has opened many eyes, this could be a sector to be paying
much closer attention to heading into the end of 2016 and into years ahead.