Digital Transformation Oculus Rift Red

Moving past the VR hype cycle

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By Doug Zanger | Americas Editor

June 21, 2016 | 9 min read

There is a current frenzy behind virtual reality (VR) these days, an excitement about the thought of being at one with their digital realms, creating, gaming, working and living in a virtual world where they are in control and surrounded by very real-seeming pixels. And it is substantially buzzy — especially in Cannes where the glitz of VR could (hopefully) get past the “ooh, shiny new object” and into real discussions on the use and promotion of VR.

But with all the talk, where are we with the technology? Has it advanced to mass user phase or is it still bubbling under while all the kinks – like nausea, tech glitches, hardware issues, comfort – get worked out? Additionally, what is the actual "promise" that VR truly has for the industry and, by extension, the wider world — past the current hype cycle?

“Right now we're still in that, ‘Oh wow, it's VR’s moment. You see this constantly, especially with brands who are enamored by new technology, and as the hype cycle deteriorates they abandon it. But in terms of people using VR, it feels such early days to me. We've got an Oculus and HTC Vive rig and I just think the cost involved for average folks to afford this kind of equipment right now is pretty massive,” said Robbie Whiting, chief technology officer at Junior.

Gaming has been leading the technology development in VR but it’s not the only business segment interested. The medical field is using it to train surgeons. The sports industry has already put it to use for its athletes in several forms, and the art world sees possibilities in creating on digital canvases. But it’s gaming that’s on the front lines.

“We just saw out of E3 how there's going to be a new version of an Xbox with a VR rig attached to it and game developers are diving in to see what they can do. You've got Steam VR. That's cool and I think there's an innate appeal to gamers with virtual reality. I play games myself. I think it's one of the things that gives me the most excitement is stepping into a VR game. Then you've got this thing where Facebook is going with VR. I almost think it's more of a VR/AR play for them at the end of the day,” added Whiting.

“I think there is a democratization of the content, what Google's trying to do with Cardboard and just using one smart phone,” said Brian Edelman, CEO of full-service digital agency, Rain, which did a 360° VR video spotlighting Nepal’s education crisis after the massive earthquake there. “I guess like the more ubiquitous version isn't really VR, it's a 360° video that you can see on YouTube and now Facebook. Hulu's got a new platform for VR that I'm sure will have a 360° element and the same with Milk and Samsung. A lot of it is semantics and what the definitions are.”

(Expensive) Technology leads the way

Before VR can hit the masses, it must overcome the exorbitant costs of production as well as getting a technology that truly addresses the VR experience beyond just the 360° element.

“There's still a hardware-versus-software conundrum to be solved there, but you've got Gear and you've got Cardboard. They're starting to get to that potential mass experience,” said Whiting.

“We're not there quite yet,” said Aaron Grando, technology lead at Red Tettemer O’Connell + Partners. “Given that the cost of getting into the games is so high, not just the actual viewers themselves, but the computer hardware that you need, or like a new game console…Sony and Microsoft have just announced new consoles that are VR ready. The same game consoles that they already have but they just are powerful enough to run VR. It's going to take a bit of time for anything to hop on. I think at the end of next year when Sony and Microsoft both have their Xbox and Playstation out we'll start to see another gradient of users overlap from beyond just gamers, (when) advertising people like us in the industry start to get into it, and start to actually have a mental investment in like, ‘Oh. This is really cool. This is something that I want to continue to experience beyond just games.’”

The agency perspective, and how to monetize the VR economy, is another hurdle that many are trying to address as the technology advances.

“The costs are going down rapidly as stitching gets automated and the post-production process gets more automated,” said Edelman. “From an agency perspective, this is just in the commercialization of it. It's still $10,000-$15,000 a minute. If you're actually going to try to make money on a decent margin that's probably what we would charge…with a minimum of $50,000, but those numbers probably will go down a bit over the next couple of years.”

Edelman added, “I think VC's look at it of like a five to seven year period and if we're already into that five to seven years, hopefully within three to four you're starting to see at least some type of return in terms of user adoption, and then potentially how these companies are going to make money off of it. We're not there yet by any means and half of these companies haven't really fully unleashed the capabilities or the software, the hardware that they're allegedly developing. It seems as if there's a lot of money going into the space. We have yet to see all of the tools to be offered. I think as those things come out the content creators will jump all over them.”

Content is a huge issue for VR. Right now, gaming is the main focus, with gaming companies being the main drivers. But what of other uses, and how do advertisers start to create content for this new platform affordably?

“There's no real, solid, central place where VR content can be found besides right now for gamers who have the Steam app store and the Oculus store. [We need] some place like a ‘world wide web of VR’, like you would load a website into a browser. How can we stream VR experiences directly to people who are willing to watch them? Right now it's kind of just annoying,” said Grando.

“Content creation from a commercial standpoint is super expensive, but from a general YouTube content creator, or for just somebody at home, or for even just like a smaller agency, the tools that are out there right now for creating VR experiences are a lot of the same tools that you would use for game development and not all agencies have that expertise in-house,” Grando added. “How can we make it so that anyone that has a VR rig is able to create a VR experience for their brand?”

Whiting thinks that the content creation for VR still is very much in the hands of the professionals and that we still have a ways to go before the masses can really access and interact with VR.

“I think we're now in a race for the killer app – the killer mass app for VR – and I think it does come down to content,” he said. “I think we're going to see such an explosion of content and usefulness. But that day doesn't come until content creation tools are completely democratized. Until the day that Google includes a VR camera on the Nexus or the iPhone has a VR camera built in, I think it's going to be difficult to get that sort of mass content creation out there.”

Where's the usefulness?

So how will VR make it to the masses and keep growing? A lot is still behind the closed doors of the inventors, but there are plenty of ideas floating around.

“One thing is making it more of a collective experience,” said Edelman. “When I think about VR now it's very singular. I guess if multiple people had headsets I'm sure there's some way where they could interact.”

Whiting sees that the technology must become useful beyond the gaming realm. “For brands to get involved, it doesn't just have to be entertaining. It's probably going to have to be relatively useful as well. Some of the brands that we're working with right now on VR are coming in through the usefulness door, which is really cool because I think they see a short shelf life to just wowing people. I think there's this massive opportunity to actually turn the web that we have into a 3D web. The way you navigate the web now could be an immediate next step for us,” he forecasted.

“If there's real useful applications for owning a headset rather than having a single computer screen in front of you, or laptop screen, could you have an infinite wall of Google Chrome Tabs?” asked Grando. “Something just to really enhance the life that you have beyond what you're physically able to do. I think that's going to be the Trojan horse that could help VR go beyond just the cool, wow factor.

Whiting thinks that regardless of content, VR will ultimately succeed by getting into as many hands as possible. But he cautions that brands that spend big and jump into VR without a purpose, just for the sake of the shiny new thing, run a big risk of failing.

“I think nothing really kills something on the upside of the hype cycle like spending a lot of money and having no results.”

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Digital Transformation Oculus Rift Red

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