Virtual reality: Is VR overhauling society’s relationship with technology?

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  Quantumrun Foresight
• July 26, 2022

Insight summary

Virtual reality (VR), a technology creating immersive digital environments, is rapidly growing and diversifying. Its expansion is driven by various applications, from social media and entertainment to business operations and healthcare, with significant investments from major tech companies. This growth is accompanied by standardization efforts, increased use in industries like healthcare and tourism, and potential impacts on future communication, legislation, and environmental conservation.

Virtual reality context

Virtual reality is an artificial, three-dimensional environment created with software. Unlike augmented reality (AR), which only enhances the real world by overlaying digital images on top of real-life footage, VR immerses users in a virtual world. VR headsets like the Oculus Rift and HTC Vive first use sensors to track a user’s head and eye movements to then generate displays that create the illusion that they are inside a virtual environment. 

The VR market is growing rapidly and is expected to be worth USD $43 billion by 2028. Although the technology is still in its relatively early stages (despite all the shiny gadgets and headsets that have been released), the worldwide deployment of 5G infrastructure promises to fast-track its development. According to consultancy firm PwC’s annual global media and entertainment report, there will be more than 55 million active VR headsets in the US by 2022---that’s as many headsets as there were paying Netflix members in the country at the end of March 2022.

Perhaps the most hyped-up benefit of VR is the growth of the metaverse, online communities that promise to be the next-level social media but more interactive and immersive. In these digital communities, users can create their own highly customized avatars to create their unique digital, blockchain-based identity that is transferrable across multiple virtual worlds. People can attend virtual concerts (where everyone has front-row seats), withdraw money from online banks, and even own virtual real estate and possessions by using non-fungible tokens (NFTs). Employees can use digital workspaces to collaborate remotely and even go out for “drinks” after work.

These applications and more are driving tech firms to scramble investments into developing the latest VR technologies, from headsets to glasses to haptic feedback gloves. Facebook CEO Mark Zuckerberg forecasts that VR/AR will be the next major computing platform after smartphones and will become the central entertainment and work gadget, replacing TVs and computers.

Disruptive impact

An important development in the VR industry involves a collective of developers creating open, royalty-free coding standards, such as the OpenXR API (application programming interface); these standards can work across all major VR platforms and devices, such as chips, headsets, game engines, publishers, and VR app stores. Standardization is also being applied across supporting devices like USB connectors, ports, and cameras. By open-sourcing such coding standards, VR developers hope they will encourage more tech firms to enter the VR market.

According to a study by Capgemini Research Institute, companies currently use VR to improve their operations, with 82 percent of firms claiming the advantages are meeting or exceeding expectations. The research was based on a survey of over 700 senior executives from the automotive, manufacturing, and utility industries familiar with their sector’s technology initiatives. As of 2021, 50 percent of firms not already using VR have begun exploring it. However, some organizations find AR more useful than VR for select business applications, although implementing the former can be more challenging. Porsche, for example, used AR smartglasses to provide step-by-step instructions and schematic drawings to employees, resulting in simplified procedures and productivity gains.

Meanwhile, the entertainment and leisure industries are applying VR technologies to multiple use cases. Video games and movies are introducing aspects of VR to create enhanced sensory experiences and interactivity. The tourism sector, in particular, is using VR to allow digital tourists to explore locations now threatened by overtourism or overexposure to human activities. One example is the VR experience of the Great Barrier Reef in Australia, where digital tourists reported experiences very similar to diving underwater and exploring marine life—and doing so without contributing to the bleaching and tampering of the reefs. Another worthwhile use case of VR is recreating historical events like the Battle of Hamel, which exhibits the soldiers’ experience on the Western Front during World War I. These experiences not only entertain but also educate and commemorate important historical events.

Implications of virtual reality

Wider implications and applications of virtual reality may include: 

• The continued development of ever more refined VR headsets and peripherals that can track every facial expression and body movement, thereby accurately translating these motions into signals expressed in a digital environment. This is particularly important for future interactions in the metaverse, such as work team activities, group gaming, or travel.
• Big tech firms like Facebook, Google, and Microsoft launching more VR technology buying sprees, from games to equipment, in a bid to corner the market and hire the best talent.
• The healthcare sector applying VR to assist in robotic surgeries, surgery stimuli, and skill training. Such applications will also help medical students practice technical skills such as uncommon surgeries, MRI scans, and operating other medical equipment safely.
• Ancillary industries related to software-as-a-service (SaaS) and platform-as-a-service (PaaS) experiencing revenue growth as they scale up and support cloud-based VR applications.
• 5G, 6G, and satellite Internet technology and infrastructure being fast-tracked to support increasingly sophisticated VR technologies that require more data and faster connection speeds.
• Potential environmental benefits as more people use VR in place of visiting live attractions and exploring new countries and places in person.
• A range of new legislation and cultural norms dictating proper codes of conduct within digital environments. These laws and norms will vary from country to country.
• The development of new media formats, especially the growth of immersive first-person narratives that make you feel like a character in a film or television show.

Questions to consider

• Have you participated in VR experiences? Share your experience.
• What possible VR applications do you see in your industry?