INSIGHTS

Virtual Reality and Augmented Reality technology
holds the promise to fundamentally transform
how people interact with and experience the
physical world, how they are entertained and learn,
and how services are delivered to them

TRANSFORMATIVE
TECHNOLOGY

WHAT IS IT ?

GLOBAL VR/AR
LANDSCAPE

STATE OF PLAY
IN VR/AR

INSIGHTS 2018-03-14T23:24:22+00:00

I - TRANSFORMATIVE TECH

Virtual Reality (VR) and Augmented Reality (AR) are technologies which
have the potential to transform the way we work, communicate, and
experience things. Not only will these sectors have an impact on our daily lives, but
they are also expected to create a multibillion-euro industry. Both start-ups
and large companies could benefit from tying VR and AR into current projects
to offer a more multifaceted experience.

These technologies have the potential to build on Europe’s creativity,
skills and cultural diversity, as well as impact various domains – from manufacturing,
engineering and architecture to education, healthcare, arts, entertainment and culture.

The VR industry is now in an exciting stage. After years of research and
development, technology has reached a tipping point where it is
accessible to both consumers and industries, and allows large-scale market
introduction in a variety of forms. Every day there are new ideas on how
VR can be used, new start-ups, increased investment and new projects all building the ever
growing expectation of what VR technology can offer.

II - WHAT IS IT ?

Virtual Reality (VR) is described as a 3D environment in which a person
can become fully immersed, using a dedicated headset, powered by a
computer, game console or smartphone. The VR experience can be
enhanced thanks to 3D audio sounds and by using haptic
devices that use sensors to transfer body movement into the virtual space.

Augmented Reality (AR) refers to a real-world environment enhanced
with computer- generated information such as sound, video or graphics
using the real world as a backdrop.

Although they are different, VR and AR share common processes and
technologies, such as audio software and data processing. They also
tend to concentrate in the same business and research worlds hence
creating overlapping ecosystems.

VR is used within a wide array of areas, ranging from the gaming
industry and entertainment, to training and simulation, including
training in the medical field. Other areas of application include
education and culture, sports, live broadcasting, real estate, advertising,
architecture and arts with more applications still being created.

AR has an almost limitless range of uses in a wide variety of areas, be it
commerce, technical applications, work processes or education. Interestingly,
VR & AR ecosystems are also closely related to the industry of artificial
intelligence (AI). This advanced technology helps to create more realistic
simulations in the virtual space, as well as independently acting avatars.

SOURCE ECORYS

As with many new technologies today, VR and AR are industries characterized by global
value chains where activities, ranging from research and development (R&D) to hardware
production and content creation, are spread out across the globe.

III - GLOBAL VR/AR LANDSCAPE

SOURCE ECORYS

CREATIVE HI-TECH EUROPE, STRONG USA, FAST-GROWING ASIA

STATE OF PLAY IN VR/AR - IV

VR and AR technology has gone beyond its early exploratory stage and is
increasingly accepted and demanded. VR has reached a tipping point for
large scale adoption, in particular thanks to the development of more
comfortable and affordable hardware.

Today headsets have become affordable and powerful and even smartphones
are capable of VR and AR data processing. They create opportunities for
consumers, researchers and businesses, including SMEs, to work and enjoy life in
a virtual space.

The fact that VR is likely to enter a period of accelerated growth can be
illustrated with a well-known typology of the acceptance of new technology –
the Gartner hype cycle. According to this typology, both VR and AR have
already passed the peak of inflated expectations or a “hype” and significant
part of the population is expected to adopt VR technology in about 5 years
(AR in 10 years). In the below figure this has been compared with other
emerging (previous and new) technologies.

To put this in perspective, VR is now entering the “Slope of
enlightenment” that smartphones entered around 2007. For smartphones it
took 9 years to reach a 50% adoption rate by consumers in Europe. Today,
smartphones are used by a third of the world population and the global
sales of smartphones reached more than €375 billion in 2016. This took
less than 10 years. In addition, a growing industry for the development of
mobile apps is connected to the rise of smartphones. This has brought a
revenue of €16.5 billion to the EU economy.