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My predictions for virtual reality in 2020

Every year, I cast some predictions for the new year in AR and VR. This year, I’m not going to make an exception, also because my predictions for 2019 performed pretty well. So, here you are how I envision this 2020 in virtual reality!

(I’ll leave AR for another post, register to my newsletter to not miss it)

Summary
oculus quest development
Me wearing the Oculus Quest

I envision this year in VR to be like last CES in VR: a time where we will see the growth of the technology, but no real disruption.

We will see the flourish of various accessories of popular headsets, new high-quality content coming to the market, but given that the major companies have already fired their shots in 2019, most probably they won’t have new bullets for 2020 (if not some incremental changes). VR will become more adopted, but won’t reach mainstream adoption yet, because times are not ready. We’ll see some experimentation with 5G, but again, this technology won’t be widespread enough yet to make it truly usable.

I see 2020 as a good year of consolidation, where VR will grow linearly before the expected explosion around 2022.

In my opinion, these are the trends to keep an eye on:

  • The continuous growth of the market
  • Establishment of VR in enterprise settings
  • Incremental technical evolution of devices
  • Blurring of the line between AR and VR
  • High-quality content (especially gaming)
  • 5G over-hype
  • Standardization given by OpenXR
  • Others (LBVR, WebVR, SocialXR)
Continuous growth of the market

2019, after a false start, has been a very good year for VR, and we had the arrival on the market of very interesting VR devices that have driven adoption.

PlayStation VR selling more than 5 million units until now has proven that console players like virtual reality. On the other side, PC gamers are appreciating the high-quality Valve Index (even if it has some reliability issues), and casual gamers are loving the Oculus Quest. Every category of gamers has the headset it was waiting for, and so it is now just time to provide them some content worth playing. The major companies are already working on this, as we’ll see in the section related to content, and the name of Half-Life: Alyx alone is already driving many new people into virtual reality. The Oculus Quest, at only $399 (probably sold undercost), is letting entering in VR people that before couldn’t afford it and that’s giving new fresh air to the market.

In 2020 this trend will continue, and the more content will get released, the more people will start entering VR. The trend of VR players on Steam is continuously growing, as this chart that got viral on Twitter shows

and the growth, from the data, seems slow (for now), but exponential.

Anyway, I don’t envision VR entering the mainstream in 2020. The reasons?

  • I still see the market not ready for it. Too many people still don’t understand the potential of virtual reality. All the backlash when Valve announced that Alyx is a VR-only game proves that;
  • All the killer applications that are coming are only tailored at gaming or enterprise. My mother would still find a VR headset useless. Oculus itself defines the Quest as a next-gen console, and if we consider “mainstream” something like the smartphone or the TV, I don’t think it’s possible at all. If we consider mainstream some million units sold, then it is very probable;
  • The technology is not there yet. The screen-door effect is visible, the headsets look like shoeboxes, the FOV is limited. The Quest, the best consumers headset out there, is not comfortable;
  • The price is still too high. Ok, when I bought my Rift CV1+new PC, I spent around $3000, and now with $399 I can have a working VR system. But usually, the price points for mainstream adoption are $199, $299 or something like that;
  • We live in a bubble of distorted perception. Yes, the Quest and the Index are sold out, but how many of them are really in production? According to SuperData (and the estimate seems reasonable to me), the Quest sold 600,000 units before Q4 2019 (so before the Holidays). With the holidays, probably we are around 1,000,000. It’s an astonishing number for VR, especially because the retention is high (so these are not devices on the shelves), but it’s still a too low number for mainstream adoption. To put it in contest, according to Statista, the Nintendo Switch has sold 4 million units just during November 2019.

The only exception to my predictions are some events that may disrupt everything, and one of them is Half-Life: Alyx. Alyx may be the SuperMario application of VR, the one changing all the rules since there is an enormous hype around Half-Life since many years. I don’t believe it can make VR mainstream in general, but actually, it may have unexpected results. The hype is too high, the news will reach so many people, that I (and with me, anyone else) can’t predict what will exactly happen. I guess it will depend all on the quality of the game, and also on how much the content shared on social media will make people want so bad a VR headset. The problem of Alyx is that it has to compete with the greater hype of games like Cyberpunk 2077, that appeal to a wider audience of gamers. We’ll see.

Nick GIF - Find & Share on GIPHY
Wait what??

Great content like Alyx, Medal Of Honor, etc… and some first discounts on the Quest together with some new headsets will make always more people interested in VR. The market will grow, and more growth will take more companies on board, and this will bring more products and so more users. It’s a virtuous cycle, and 2020 will be all about it. No disruption, but a real growth. I see a car that is accelerating and is switching from the 2nd to the 3rd gear… it’s taking momentum, but not running at full speed yet.

In the end, I still believe in the old predictions of Unity CEO John Riccitiello:

virtual reality predictions for 2019
Look at this graph shown by Mr. Riccitiello in 2017: the purple line is the one of the analysts, while the white one is the one forecasted by him. He told that VR would have started becoming mainstream in 2019, and it has exactly happened with the Quest (Image by Road To VR)

As you can see, in 2020 the curve starts rising, but it still takes some years to really spike towards the sky.

2020 won’t be the year of VR. But it will be a great year for VR.

Establishment of VR in enterprise settings

The sector where I really see a big growth of VR is instead in enterprise settings: companies are finally understanding the potential of these technologies to spare time and money and so are now adopting Virtual Reality in their productive settings.

VR can make designing a new product 10x faster!

I’m reading this from all market analysis, and I’m also seeing it myself. Most probably you know that I’m a VR consultant (contact me if you need implementing VR in your business!), and in the last 6 months I’ve seen a huge growth of enterprise requests of every kind. Mostly they are about entertainment, marketing or training experiences. There are also just companies asking me information because they want to explore the technology. The situation is very different from the one of one year ago when there was far less interest. For sure the Quest has helped a lot in this. The trend is that many companies every day become interested in VR, and the fact that the headsets are not perfect is not a problem for them.

Pico Neo 2 and Pico Neo 2 eye CES
Pico Neo 2 and Pico Neo 2 Eye, enterprise headsets just launched at CES (Image by Pico Interactive)

I forecast a big growth in the enterprise usage of VR headsets, both 3DOF (mostly for marketing and education) and 6DOF ones (for prototyping, training, etc…). Also, the hardware will follow this trend: at CES, in fact, we have seen mostly the launch of new enterprise headsets (Pico Neo 2, XTAL 8K, etc…). Oculus itself, that is a company geared towards average consumers, will enter the sector, finally launching the Oculus For Business program after many delays.

Companies adopting VR won’t just be the ones wanting to be innovative, but also many that have to protect their businesses from competitors that are gaining a competitive advantage thanks to the use of virtual reality (I’ve experimented that from my customers as well).

virtual reality training oculus
The moment during OC6 where Oculus showed, together with the Imperial College of London, how training in VR is much more powerful than traditional training

Enterprise tt’s the sector where money in VR will mostly be in 2020: it’s maybe not as sexy as gaming, but it is surely profitable.

Incremental evolution of devices

This CES, there hasn’t been the launch of new fantastic headsets, but just of some devices that are better than others in the market. We’re just experiencing linear incremental evolution of the various devices. For instance, the Pico Neo 2 is better than the Oculus Quest in almost everything (more horsepower, more resolution, etc…) but no one is holding its breath for it. It is a great enterprise headset, but it is not changing the market. The Panasonic VR viewer has a nice steampunk look, but it is just a sexier Oculus Go.

This is perfectly normal and in line with what that genius that answers to the name of Michael Abrash has said. Truly next-gen VR (featuring a fantastic display and very wide FOV, varifocal resolution, eye tracking, haptics controllers, etc…) will take many years to realize. We won’t see a true disruptive headset probably until 2022-2023. I’m not saying that in the meanwhile we won’t see new releases of headset: Oculus may even launch the Rift 2, but it would just be an evolution of the Rift S with a better display, and a more ergonomic design. True VR will take years, and in the meantime, we’ll see the specifications of the headset becoming gradually better, but without changing the game so much.

oc6 abrash predictions
Michael Abrash jokingly explaining he has no idea of when next-gen VR will happen

We’ll see an aftermarket of accessories popping up, especially for the most successful headsets, like battery packs for the Quest or new face gaskets for the Index. These will improve (again, linearly) the features of the various devices, but without changing them much.

We have also to consider that in 2019, most of VR companies (Valve, Oculus, HTC, etc…) have already launched their devices, and given that VR headsets have usually a lifecycle of 2-3 years, I’m not expecting them to announce something new next year. If you think about it, in the last period, the great years that we remember for headsets are 2016 (Rift CV1, HTC Vive) and 2019 (Oculus Quest, Valve Index). It’s a 3-year timespan indeed.

Huawei VR glasses review
Me wearing the Huawei VR glasses

Maybe the most interesting evolution that we’ll see is that 3DOF viewers will all become fashionable like the Huawei VR glasses. Standalone 3DOF headsets will probably die in 2020, and people will start preferring sexier devices connected to phones: Huawei, Pico and Panasonic have already shown that this form factor works, and having tried it myself, I can confirm. Finally, there’s a way to watch your VR movies outside home without looking like an idiot with a box in your face.

The other interesting trend is the one of the Qualcomm XR2 reference design, but I’ll discuss it in the next paragraph.

Something to keep an eye on, instead, is how many people will use the Oculus Quest to play PC games. If the Quest, through Oculus Link, will prove to be the most used PC VR headset, probably this could mark the death of consumer PC VR headsets, that will just transform into premium devices for gamers like the Valve Index. Standalones could conquer all the market. Let’s keep an eye on the statistics to see if this is going to happen.

What will the major brands do?

You may ask me what will the major XR headsets producers do this year, and these are my speculations:

  • Oculus will kill the Oculus Go. I’ve already revealed that Xiaomi has de facto abandoned the project, and Oculus has just cut down the price of the headset to sell the devices it has already in stock. With the arrival of Quest, the Go has no much more importance to Oculus, and so it is destined to die. Go is the new Gear VR;
oculus go future
What is the destiny of the Oculus Go? (Image by Oculus)
  • Oculus may tease or launch a new kind of Quest. The Quest is selling pretty well, and I’m sure that Oculus has no need to announce a Quest 2, that would just have the side effect of killing the sales of current Quest. But Oculus may launch a lightweight Quest (with no controllers) at $250 to substitute the Go, or a Quest Pro (with Snapdragon 845/855 and 4K display) at $6-700 to perfect its positioning towards enterprise customers and prosumers. Oculus has found in Quest the form factor selling better, so it will surely iterate over it in the next times;
  • The Quest will see its first limited sales at $349;
  • I envision no Rift 2, unless Lenovo wants to make a new headset. After the release of Oculus Link, I also wonder if we will ever see a Rift 2 (I guess not, honestly, unless it is an enterprise-oriented HMD);
  • HTC will release a Vive Focus 2, based on the Qualcomm XR2 reference design. It will be forced to do that, because on one side, the Quest is stealing it the gamers’ customers, and on the other side, the new Pico Neo 2, more powerful and less expensive than the Focus+, is stealing its enterprise customers (also in China). If the company from Taipei wants to stay relevant in the standalone market, it will have to do that;
Vive Focus and Vive Focus Plus
Vive Focus and Vive Focus Plus
  • HTC will focus more on the enterprise market. If Oculus is the king of consumer VR, HTC is the king of enterprise VR. If you enter a VR arcade, most probably you will see only Vive and Vive Pro devices. This is due to a clear business licensing model, and the production of very good enterprise headsets (the Pro is pretty solid). HTC, like all most of other brands, can’t compete on the consumers market with Facebook, that spends billions every year to fund games and sell under cost devices, so the most reasonable choice would be to focus on enterprise hardware, to return back on the consumer market later on, when the financial situation will be better;
  • Samsung will launch its standalone headset, probably based on the Qualcomm XR2 reference design as well. It’s too much time that I hear this rumor, and Samsung teased that it was interested in a headset mixing AR and VR, that is exactly the main topic of this reference design. The headset will be much better than Quest, but its problem will be that it won’t be able to have the same great library of content of the Quest, so probably this will become an enterprise headset as well;
  • Sony will tease PSVR 2. Sony has already clarified that it won’t sell the PSVR 2 together with the launch of the PS5. So, personally, I bet on a PSVR 2 in 2021. But I find it reasonable that Sony teases something about the new device this year, to make VR people dream and to show its dominance in the console VR field;
A girl playing with PSVR... unluckily she's not included in PSVR bundle
A girl playing with PSVR. It’s time to upgrade this old system (Image by Sony)
  • Valve will grab some popcorns and see the Index selling;
  • Apple may launch its rumored 8K headset that should be a visor for professional, a device to augment your Mac giving you an infinite monitor to use. Personally, I don’t believe this will happen, since Apple has always said it is not interested in VR, but a rumor says so.
Blurring of the line between AR and VR

The big innovation for standalone VR headsets, that has been already announced by Qualcomm, is the XR2 reference design.

XR2 is a variant of the new Snapdragon 865 processor and it is a chipset dedicated to high-end standalone AR/VR headsets. And it has an associated reference design that will define the next-gen XR headsets. That is, the Quest 2 and the Vive Focus 2 may be based on this technology.
 
With this new chip, headsets will:

  • Have a resolution of 3K per eye;
  • Have up to 7 cameras used simultaneously (12 in total for the device). This means that if you employ 4 for tracking, you can still use two for instance for eye-tracking and one for lips tracking;
  • Be able to finally offer passthrough augmented reality with appropriate resolution and framerate. This means having AR and VR on the same device;
  • Feature a 5G modem;
  • Play 8K videos at 60fps;
  • Have accelerated AI so that to be able to perform objects recognition and other cool stuff on the camera feed.

Basically, the new headsets based on this chipset, that Qualcomm said will be released starting from Q2 2020, will have high resolution, eye tracking, 5G and MR features out of the box. Of course, I don’t think that every XR2-based device will have all those features (otherwise it would cost too much), but it will at least have some of them.

The possibility of having passthrough AR could be a defining moment. For sure you know that with the team at New Technology Walkers, I’ve contributed to the development of HitMotion: Reloaded, the first mixed reality fitness game.

It exploits exactly passthrough AR, and I see lot of potential in this technology: with passthrough AR, you can have augmented reality with wide-FOV, vivid colors, and the possibility of modifying reality. You could also have diminished reality and make objects disappear. You can interact with real-life objects, like your keyboard, to have an MR office, as Varjo has teased.

The possibilities are many, and I see it as the real disruption of VR headsets for this year. This reference design will give us devices that maybe won’t be v2.0, but will surely be v1.5.

The true unknown is how much these features will appeal the general consumers. In my opinion, they will be more interesting for prosumers, artists, makers and enterprises.

High-quality content

2020 won’t be a memorable year for the headsets launched (see above), but it will surely be a great year for content. This year, we are all waiting for:

  • Half-Life: Alyx
  • Medal of Honor: Above and Beyond
  • The secret title that Ubisoft is making with Oculus
  • IronMan VR
  • After The Fall
  • Lone Echo II
  • The Walking Dead: Saints & Sinners

… and many others.

Companies are spending millions in funding content, paying AAA studios to make experiences that can draw people into VR (I know about some funding amounts for Robo Recall, Vader Immortal, etc… and they are insane numbers). This strategy is working, and these titles are also creating a good amount of interest. Some of them, like Half-Life: Alyx, are directly fostering a big hype.

Palmer Luckey, in a famous post, told that “free is not cheap enough for VR” at the moment, because there is not enough compelling content. Well, companies are now working to create this kind of content that can attract a single category of people (male gamers), hoping to target the others in the future. And it is going well, consider that nowadays who buys an XR headset has enough good content to play for months. So, the ecosystem is finally starting working.

That’s a piece of good news for game developers because a bigger market means more money (see Boneworks that has made $3M in just one week). This will attract bigger studios in making VR games, giving new high-quality content to players. As I’ve said, this is a healthy cycle that has just started to work.

But at the same time, this is a piece of bad news if you’re a little team. When I entered the VR field, every kind of experiment could become a famous game (there was still the “Oculus Share” website… so many memories). Now, games like Asgard’s Wrath have raised the bar so much that if you publish an indie game, it would be compared with them and your game would seem poorly-made. The problem of this big fat amazing games is that they required big funding by Oculus, that no indie can afford to have. Not to mention the fact that the most profitable platforms, the Quest and PSVR, discard all games that are not ultra-polished. So, the VR ecosystem starts becoming an issue if you have not a structured company.

Content is becoming so important that now the headsets owners are starting buying the game studios to be sure to have compelling content on their platforms: the acquisition of Beat Games by Facebook is the emblem of this. This is mostly important on standalone headsets: while Facebook is happy with Beat Saber being available on PC and PS, I’m sure it won’t allow Beat Games to port the game to other standalone devices.

The Quest won’t be the best VR headset from a technical standpoint in 2020, but it will still be the one with the best ecosystem (the best games) and this is what will make it sell better than its competitors. Content is the best strategy to give value to a VR platform. Valve is following the same route: it is releasing one game, but a super-important one, to give power to its Steam platform for VR games. And that game has some exclusive interactions for the Knuckles controllers, to give value to the Valve Index headset.

2020 will be the year were content will truly be the king. Expect many interesting titles coming, because this is where the companies will have the true battle this year. The war has just begun.

5G over-hype
gartner hype cycle 2019
Look where is 5G in the Garnter Hype Cycle! At the peak of its hype… (Image by Gartner)

In these years we have all said the same thing: 5G will come and will revolutionize everything. And in fact, we are in the middle of the 5G hype, when everyone promises that 5G will give us VR games streaming, ultra-light headsets, fantastic XR applications, etc…

Let’s do a reality check: in 2020, 5G won’t be widespread. Its deployment is more complicated than the one of 4G (because of the need of closer antennas), that already took its time to deploy. And anyway, 5G can give us more bandwidth and less latency and nothing more. 5G is not a magic bullet.

This year, I don’t expect 5G cloud streaming of VR games, I don’t even expect many glasses actually implementing 5G antennas. I just expect many demos by phone operators, a lot of University research and some limited uses in the enterprise sectors.

Probably during the year, people will start saying that 5G is a fad and is not solving anything in AR/VR. The usual “trough of disillusionment” that happens after the peak of inflated expectations. 5G will probably show its full potential in some years.

Standardization

Finally we have the first standard of OpenXR, the system that should standardize AR and VR, limiting the far west of runtimes, APIs and SDKs around immersive realities.

openxr vr standard
OpenXR standardization project (Image by Khronos group)

All companies have already started implementing it, and if everything will go well, by the end of 2020, all major systems may be implementing OpenXR, for a more open virtual reality. We’ll see if this system will actually work: sometimes standards never take foot and a new standard to unify them all just becomes a new standard, as this popular xkcd comic says:

(Image from xkcd)

2020 will be the do-or-die year for OpenXR. Let’s see if it will prove successful as a standard. We need many companies working to make it happen.

I believe more in the WebXR standard, that many browsers are already implementing. This should take to a better adoption of WebXR.

WebXR

As I’ve already stated before, WebXR is improving a lot. It is now implemented in all the most important browsers and developers have now tools like A-Frame 1.0 that can now let them create immersive web experiences.

I see WebXR gaining importance in 2020: in 2019 we already had a Web VR game like Moon Rider having thousands of users every day, and many platforms exploiting Web XR to let you see VR videos (of all categories, according to a friend of mine…) and VR tours. But I don’t see WebXR becoming more important than standalone apps yet. The ecosystem is still too unripe, and the graphical outcome of WebXR experiences is not satisfactory yet. But I see its potential to improve the functionalities of existing websites, like for instance e-commerce ones.

LBVR
hologate blitz vr
The Hologate Blitz is a just released device for LBVR that is compatible with the Valve Index (Image by Hologate)

I still believe that LBVR is a big bubble, that in these years, has to burst. Don’t misunderstand me: when done the right way, LBVR can be a very good business, and you can attract people that want to try VR or that want to have fun with friends. HOLOGATE is, for instance, a company being very successful in the field. There are many people living out of it.

But I don’t believe in the LBVR gold rush: the fixed costs are very high, you require many people assisting the players, and your customers are coming mostly during the weekends. If you don’t pay attention to your business plan, you crash very bad. In 2019, some people have already reported me that some famous LBVR franchises are actually burning lots of money, and I’ve seen also a picture of a The Void center being completely… void.

I guess in 2020-2021 we’ll truly understand the business potential of LBVR, and so understand if it is a great sector to invest your money in, or just hype. We’ll also see if I owe Kevin Williams a beer or not 🙂

Social XR
My birthday part inside UXR, the secure web XR social platform

In 2019 we have seen the success of a social VR platform like VRChat, and the failure of other more promising ones like Sansar and High Fidelity.

In 2020, there will be the launch of Facebook Horizon. Facebook will try again to create a compelling social immersive experience, after the disaster of Facebook Spaces (honestly, who was using it?). It is quite strange that the king of Social Media can’t create a great social VR experience, and we’ll see if with Horizon they will be able to change this trend.

Facebook Horizon will launch in spring 2020: the premises are good, it seems a Rec Room on steroids, and Facebook has a big existing userbase that can be converted to social XR. Furthermore, Facebook is the social media of the millenials, exactly the same category of people that will buy a VR headset to play Half-Life: Alyx. The premies are all good, but will it actually deliver? We will discover it soon…


And that’s it for this long articles with my predictions! If you liked it, please share it on your social media channels by clicking the buttons below, and subscribe to my newsletter to not miss my predictions about AR!

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