S P OT L I GHT

After many years of existence with early adopters in gaming and entertainment, Virtual Reality
(VR) is just about to break into the mass market.
Headsets running customized software create an immersion into an artificial world inducing
reality-like feelings and experiences using 3D visuals and sound.
Oculus VR is the first player to introduce an affordable device for the mass market. Its
acquisition by Facebook for USD 2 bn raised awareness for future use of the technology.
1
It is a fast growing market: Total cumulative headset units by all manufacturers sold from
2014 to 2018 are estimated to reach more than 55 m.
2
Samsung and Google made headlines
recently with the announcement of new devices connected to smartphones.
UPDATE
VIRTUAL REALITY
www.nunatak.com Issue 4
Sources:
1
Business Insider (2014),
2
Kzero (2014),
3
Techtimes (2014),
4
Tomshardware (2014),
5
Howstuffworks (2014),
6
Forbes
(2014),
7
Kickstarter (2012),
8
TheVerge (2014),
9
Sammobile (2014)
August 2014
D E F I NI T I ON
T I ME L I NE OF V R I NNOVAT I ON
VR immerses the user in an artifcial environment created by software on display
screens or through wearable devices like head mounted displays, VR glasses etc. These
environments are experienced through the senses of sight and sound. The users
conscience moves out of its real world environment. The simplest form of VR is a 3D
image. Evolution of VR has led to the emergence of innovative technologies like
haptic devices that deliver results based on touch coordination and pressure sensitivity.
VR has its frst
appearance in
arcade games: Users
enter a 3D-world
via goggles in
a closed cabinet
4
SEGA introduces its
wrap around VR glass
"Genesis" at the
Consumer Electronics
Show
4
VR devices are
used to perform the
frst robotic
surgery in Paris
5
Ford starts using
VR in design and
production of vehicle
prototypes
6
Oculus uses Kickstarter
to fnance its VR
device "Rift" and
allows developers to
build games for their
headsets
7
Facebook buys Oculus
VR for USD 2 bn.
Samsung cooperates
with Oculus for Gear
VR, Google creates
Google Cardboard
8,9
1991 1993 1998 2000 2012 2014
Active users worldwide are
expected to grow from 600,000 in
2014 to 47.6 m by 2018.
Unit sales of VR products are
expected to rise from 200,000 by the
end of 2014 to 23.8 m by 2018.
Sources:
11
Adage (2014),
12
Ehow (2014),
13
Adnews (2014),
14
Virtuix (2014),
15
Thomasnet (2014),
16
Ripublication (2013),
17
Kzero
(2014),
18
Kzero (2014),
19
Adage (2014),
20
Red Bull Cliff Diving (2014),
21
Marketingmagazine (2014),
22
Kzero (2014)
Market estimates 2014 and 2018
18
Business opportunities using Virtual Reality
Total Revenue for Consumer VR
17
(in m USD)
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Virtual Car Design
Virtual Cliff Diving
Virtual Catwalk
Virtual Newsrooms
Nissan and Oculus VR
designed a virtual
environment, in which young
consumers were able to
design their own Nissan car
at the Tokyo Motor Show.
19
Through Oculus Rift, Red Bull
let users experience a
realistic cliff dive resulting in
strong physical reactions.
20
Topshop gave customers the
opportunity to watch
its fashion show via VR
glasses in order to make it
accessible to everyone
present in the store at that
particular time.
21
BBC provides their viewers
with a real time experience of
being in the newsroom.
22
BR ANDS
US I NG VR FOR
MARKE TI NG
>Media & Advertising:
Generates new forms of interactive,
social advertising, which puts
users in direct contact with the
product and the brand
11
>Entertainment industry:
Enriches user experience through
full immersion of the user in
the virtual world of entertainment
(virtual museums, interactive
theater performances etc.)
12
>Sales & E-Commerce:
VR is a great sales tool
for things that are hard to
visualize remotely like fashion
or real estate
13
>Gaming:
Improved gameplay experiences
through ever more realistic
representation: For instance, Virtuix
Omnis hardware records physical
movements and transports them
into the game.
14
>Automotive Industry:
VR engineering allows simultaneous
work on different entry points
of the rendered model as well as
product demos.
15
>HR & Trainings:
Helps to conduct realistic
trainings and virtual meetings that
save costs and CO2
16
In 2014, a VR device costs around USD
300 per unit and is expected to
drop by circa USD 50 per year till 2018.
2014 2018 2014 2018 2014 2018
90
2300
5200
2014
0
1000
2000
3000
4000
5000
6000
2015 2017 2016 2018
3800
4600
VR Products (Hardware)
Sources (all 2014):
23
Nytimes,
24
Oculusvr,
25
Save Continue,
26
Techcrunch,
27
Dodocase,
28
Google,
29
Chip
HE AD MOUNTED DI S PL AY S MARTPHONE E X TENS I ONS
Oculus Rift
>Acquired by Facebook for USD 2bn >"The most
advanced immersive entertainment system"
23
>Used
beyond gaming (architecture, education, etc.)
Price: USD 350
24
Sony Project Morpheus
>First major hardware company entering
the market >Only VR headset on the market
working with other gaming devices
Price: USD 249-299
25
Google Cardboard
>Foldable cardboard headset combined with
Smartphone >Smartphone app serves as VR
interface presented at Google I/O in June 2014
26
Price: USD 20
27
Googles Project Tango (cooperation with LG)
>Prototype of 7"-tablet device that tracks
motion and creates a 3D model of an environment
>Collaboration between nine countries,
several companies and universities
28
Price: n/a
Samsungs Gear VR (prospective design)
>This VR headset will have
a slot to attach a Galaxy
smartphone within
>Software is developed with
Facebooks Oculus
>Expected to be released
by end of 2014
>Entire sectors and Samsung
apps to be dedicated to
Gear VR
Price: n/a
29
The Nunatak Group is a digital strategy consultancy based in Munich.
Our focus is on Mobile Media, Social Media, Growth Strategy, Digital Coaching and
Investment Support for companies in growth industries.
The Nunatak Group GmbH | Managing Partners: Robert Jacobi, Rupert Schfer | www.nunatak.com | info@nunatak.com
Sources (all 2014):
30
VirtualReality.io,
31
The Guardian,
32
Counton2,
33
Thalmic labs,
34
Virtusphere,
35
Mashable
Emergence of VR Software and Apps
>VR headsets are incomplete without the software.
Oculus Rift created the open source software
VirtualReality.io that is available for developers to
use, modify and run on any VR device.
30
>VR apps are being developed for gaming and
entertainment applications, like Oculus VR Cinema
software and the recently released version of Second
Life, which allows the use of the Oculus Rift headset.
31
>Agencies and Publishers see great potential in ad-
vertising on the VR space. E.g. Oculu is developing
a video player to serve pre-roll ads directly into the
platforms using VR technologies.
32
Although VR has recently emerged in terms of hard-
and software development, the industry still faces
huge challenges, e.g. in terms of lack of technical
expertise and under-developed infrastructure.
FURTHER RE ADI NG
If you have enjoyed reading this Nunatak Update, be sure
to check out our past issues on nunatak.com:
Myo by Thalmic Labs
Virtusphere
VR Gloves & Sensors
The armband tracks muscle
movements on the users forearm
and wirelessly connects to
different devices to control them
(laptop, phone, TV, etc.).
33
The company produces a
locomotion sphere that gives
users the impression of moving
freely while staying in the
same place.
34
WorldViz produces a 22-
sensor data glove, which helps
in tracking gestures, and
picking and dropping objects in
the virtual world.
35
COMPA NI E S
WI T H
V R A S S OL E
PRODUC T
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