Editorial: We are entering into a new cycle of XR

After having seen the teaser of the Quest 3 and especially the announcement of the Apple Vision Pro (about which you can read my opinion here), I’m always more convinced that we have entered into a new phase of XR history. And this is opening new opportunities for all of us.

The cycles of the evolution of XR

Innovation never goes in a straight way. When a technology grows, it usually does that in steps: there is a technological breakthrough, then there are incremental innovations, then there is a new technological breakthrough, and so on. Think about listening to music: we had the Walkman, then always better Walkmen; the CD readers arrived, and then we had improved CD readers; MP3 disrupted the sector, and so on… Technology evolves in cycles, with every cycle starting with a disruption, small or big it may be.

I was looking back at my 8+ years in the field, and I could identify already a few cycles of consumer XR:

• The devkit cycle: it’s the era of the good old days of Oculus Rift DK1 and DK2. We were mostly all nerds playing with the technology and having fun with it. I have great memories of those times (there was a lot of hope), but of course, it couldn’t last forever, because technology can’t live off devkits. This era ended with the launch of the first consumer-oriented PC VR headsets: the HTC Vive and the Oculus Rift CV1. I would say it is the only phase that ended with hope instead of disappointment: we all were waiting for the first consumer edition of the headsets to make VR become mainstream like in Ready Player One (we were very naive…)

• The PC VR (roomscale) cycle: It started with the release of the first consumer headsets, and was immediately disrupted by HTC and Valve with the room-scale of the HTC Vive. I would say this has been a troubled cycle because it started with the hopes of all of us… that were shattered when we discovered that headsets cost $1000 and required a $1500 computer to work. We immediately realized that something was off from our initial expectations. Anyway, PC VR slowly grew, but at a certain point there was the realization that at that cost and with that difficulty of setup (attaching constellation sensors everywhere was no fun), XR could never take off. There were also the first 3DOF devices (like the Cardboard), but they failed miserably because they were fun just for a few hours. We had the famous “Winter of VR”, with many people saying that “VR is dead”. XR needed something new to evolve

• The Oculus Quest cycle: Something new arrived in 2019, with the release of the Quest and similar headsets (Vive Focus, Lenovo Mirage Solo, and later also Pico Neo). Standalone virtual reality, especially thanks to the price subsidization operated by Facebook, proved that with an easy-to-use device, good games, and an affordable price, VR could reach millions of people. This cycle has been totally dominated by Facebook/Meta, which has de facto created a monopoly. On the wings of enthusiasm for the success of Quest 2, Mark Zuckerberg announced that Facebook was all-in for XR, and its new name became Meta. The hype for the Metaverse so started. The thing is, after the initial impressive growth, lately the sales have started being less exciting. For sure the bad economic conditions are not helping and so is the rise of the price of Quest 2. As for the metaverse, no one understood what Zuck said (which was not that bad, actually), and after an initial hype, people realized that whatever it was, the metaverse was not going to come any soon. And here we are now in what I call the “Autumn of VR” because it’s grey and cold, but not that bad like the Winter of 2017-18. The Quest has sold well to its target market, that is people that wanted to have fun with games in XR, but it is like it can’t grow THAT much beyond the current numbers. Whoever needed it, already bought it. The others, simply don’t care much. Again, we need something new to shake the ecosystem.

Apple joins the match

And on the 5th, that “something new” arrived, with Apple launching the Vision Pro, flagging the beginning of a new cycle. I don’t think that the new cycle is beginning only with Apple, there are many other things coming, but we can consider it as a start because of how big was this milestone.

With Apple and everything else that is happening these months, consumer XR is entering into a new cycle, and I think that the next 12 months are going to be very interesting to understand how the technology will evolve in this iteration, which may last a few years like the previous ones. Every new cycle brings with it many opportunities, so it’s important to see when a new one is starting. Think about all the game studios that started having revenues in the millions with the release of the Quest…

Let’s see what are for me some of the characteristics of this new cycle.

The tech giants are coming

After having played a bit with XR over these years, it seems that the big tech giants are entering the XR arena for real this time. Apple has launched its first AR headset, with a clear commitment to launching new (cheaper) models over the next years. Google joined forces with Samsung (and Qualcomm) to release a new headset soon. Bytedance is already in the game, Meta is currently the market leader. The big dogs are all coming.

Apple has already announced its App Store for the Vision Pro, and I can bet my ass that when Google and Samsung will announce the new headset, it will be associated with a new Android For XR operating system and an XR Play Store store. The companies that have dominated the smartphone sector for years are coming to dominate the new technological platform of the future. And they bring with them a huge existing user base, already working operating systems, and especially enormous expertise in hardware creation. All features that Meta is missing.

Everyone loves to criticize Zuck, but I have to recognize him he did the only possible thing he could do to try to get a chance to dominate the platform of the future: starting first. Starting together with Apple and Google, Facebook would have had zero chances of being leader in XR, because the other two companies have too much expertise that would have jumpstarted it and crashed it. Starting so early, Meta has burned billions but has done that to have now at least a chance to be one of the market leaders.

The problem is that Meta these years has also shown all the limits of a company that was a social media company and not a hardware company. Not to mention the fact that the reputational dept that Meta accumulated all these years has not gained the sympathy of people for Meta’s products. The Apple headset has a proven amazing UX (Ben Lang confirmed it in his hands-on), plus the headset ecosystem will be integrated with all the Apple apps people already use every day. Google is another company that is a master in UX, and I still think that the Lenovo Mirage Solo, running Google Daydream, had one of the best UX I’ve ever tried on a headset. Google also owns popular services like the G-doc suite or Gmail. I’m sure its new headset will be easy to be used and will be integrated with Google services. These are companies that know how to handle a new product.

People already see Meta as dead in this battle, but I don’t agree. It still has 9 years of experience in the field, and it is the only company with a proven sales track. As much as the Apple headset has created hype, it has not sold a single unit yet. Meta is releasing good products, which already have almost all the features that Apple announced, and is spending billions every year in R&D, so I wouldn’t declare it dead too soon. But for sure, the age of its monopoly is over, and now Meta won’t have to compete only with smaller companies like HTC, but with more prominent companies like Apple.

It will lose a lot of market shares. It will have to face real competition. Developers and consumers will have more choices. If Meta is not accepting the app of a developer on the main Quest Store, that developer can look for better luck on the XR Play Store, and make good money there. A lot of things are changing, and I’m sure this will be for the better of all of us. For instance, if Google and Apple stores will be more open than the Quest one, I think Meta will have to open its one, too, or it risks losing the developer community. Because it is true that the App Store is a pain in the ass to enter, but still everyone that respects the rules can enter it, so it’s more open than Quest Store. Not to mention that the Digital Markets Act will force all these players to open up their rules in general.

Two years from now, we will have at least three big stores around, creating more opportunities for all us developers. I see this as the moment where all the renegades from the Quest Store can try and find new luck in new territories with the chance to grow. It’s like the open land of the Far West that we can conquer. In my life, I lost the opportunity of landing on Steam VR and then on the Quest Store at the right time, and now I don’t want to lose this one. I’m pretty sure times will be interesting ahead, and new unknown players can become dominant on the new platforms.

XR is becoming more mainstream

Meta did a lot to make VR more mainstream: think about the (horrible) ad during the SuperBowl to commercialize Horizon, or the (terrible) commercials in TV about the metaverse. When I landed in San Francisco in 2021, ads about the Quest were all over the city.

Now with the Apple announcement, an XR headset was the topic of the day for everyone. Twitter exploded with memes, opinions, news about this new XR device. And Apple won’t stop here, it will promote its device as the “new Apple luxury thing cool people have” after its launch next year. Samsung will probably copy Apple (as usual) and do the same. Meta to not lose ground will probably double up on its ad spending. I expect much more exposure for XR in tech magazines, posters, and TV commercials. This will help the awareness for XR and will push it much more into the mainstream than it is now.

Plus, if Apple manages in its mission (and it is a big IF), XR may really become “the cool luxury thing” that people want to have, and this sense of craving may make the technology appear cooler than it is now. I really hope for this to happen.

More AR/MR, less VR

We were all wondering when the transition between VR games and everyday AR glasses applications would have happened, and the answer is “now”.

Both the Quest 3 and the Apple Vision Pro are mixed reality devices at heart. While they can do VR, their main focus is to augment the space between you. They’re the transition element between the current virtual reality and the future augmented reality.

Until now, the most popular XR headset, the Meta Quest 2, was all about VR. Yes, lately some AR arrived, but still, the majority of content is VR games. The Vision Pro entered the game saying “you can do VR, but it’s much better to be in AR as much as you can, so you are not isolated from the environment and the people around you”. Tim Cook expressly mentioned augmented reality, but never said virtual reality.

VR is and will always be part of our lives. But AR is the technology we can use for many hours a day, even in the streets. Our future is there. The Vision Pro and Quest 3 mark the beginning of a new era where VR won’t be the majority of use of consumer XR anymore. It will take time, but the transition will happen.

And well, considering that with the team of New Technology Walkers, we were probably the first to ever release a mixed reality game on an official store (Viveport M) in 2019, I’m pretty happy to see this technology taking foot.

A final mention is also deserved to the new ecosystem built by Qualcomm, which is Snapdragon Spaces, which is getting bigger every year, and is all focused on AR/MR applications production. AR/MR is slowly getting more traction.

More general apps, fewer games

Apple Vision Pro’s pitch was mostly about having virtual screens all around you. They talked about games and fun, but most of the time the focus was on utility and productivity. The headset appeared classy, and the people with it moving slowly. Compare it with the usual Quest 2 commercials, which are all about people moving fast, running, and smiling. The Quest 2 is your new PlayStation. The Vision Pro is your new Mac.

This is again a needed transition. As much as I love games, games are just a part of our life, and they have a limited (even if big) market. When we dream of the metaverse, we think about going to the streets and getting information about restaurants, we think about meeting distant friends… we don’t think about gaming 24 hours a day. Also AR/MR is less suited to do games, because usually you want to be transported into a game, you want to feel really there. VR is the technology that amplifies the emotions of a game… MR is cool for games (as I’ve said, I made one of the first games ever for it), but not as the same level as VR. Plus MR is constrained by the real world around you, while with VR you can do whatever you want (e.g. you can make a game where you fly).

So with the technology transition from VR to MR, I see also a transition from gaming-first to utility-first. A transition that has not been started by Apple, we all know that Meta Quest already allows you to use your PC with a big screen in MR, but Apple has made it crystal clear in his presentation video. The Vision Pro is your new personal machine, so it must be useful, and sometimes used for fun.

Meta has created a great VR console, which is the Quest… now with Quest 3, it has to choose how to carry on the transition from a gaming console to a general-purpose device. Or it will be locked in into a niche, while Google and Apple expand to the whole smartphone market.

Qualcomm and Android have a new competitor

We had two other quasi-monopolies these years: Qualcomm was the chipset manufacturer for basically all the XR headsets, which were all based on modified versions of Android. There have been a few exceptions to this rule (e.g. HoloLens 1 was based on an Intel chip and running Windows), but all the most popular devices run Qualcomm and Android technologies.

Vision Pro is coming with Apple custom chips and runtime. I’m almost sure that Apple also won’t join OpenXR. This means that we’ll have an outlier headset, which will be most probably over the years one of the market leaders, employing technologies that are completely different than the ones we have used until now. And it will be interesting to see if other companies will follow the same route.

Will also be interesting to see if Google will release an “official” Android operating system for XR headsets, probably compatible with Snapdragon Spaces, which may be employed by all the headset manufacturers that want to comply. In this case, we could have the same Android vs iOS situation that we have on mobile.

AI integration

Don’t underestimate the convergence of technologies. With AI getting big, I’m sure that this new wave of XR will be influenced also by the growth of artificial intelligence. I still don’t know exactly how, but I can give you a few hints:

• AI helps in bringing 2D elements to 3D, or reconstructing 3D spaces (think about NeRFs, for instance)
• Generative AI can give people tools to build XR content more easily
• AI can power personal assistants than run on AR glasses

(I also made myself a nice experiment of mixing mixed reality with generative AI… I advise you to give it a look here)

New opportunities

As I’ve said, a new cycle brings new opportunities. Old assumptions are shuttered, old leaders can be challenged, and new incumbents can become dominant players. Let’s see what will happen in the next times, but I think this is a phase when there are a lot of new opportunities coming, and who will be able to deliver the best products that fit better these new technologies can become a market leader. It’s the moment where it is important to exploit opportunities, because a few doors are opening, and it is important to be there at the right moment with the right product.

I don’t think all these transitions are happening overnight, but I’m pretty sure that 3 years from now, looking back, I will think “oh wow, that moment lots of things started changing”, exactly like now I think about 2019, the year the Quest launched. And I’m happy to be here now and to share this exciting moment together with you.

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(Header image by Apple)