How Virtual Reality Is Going to Change Your Life

Updated from Feb. 16 to include information on Intel getting into the augmented reality space.

So you've probably seen some news recently about nearly every major tech company getting into virtual reality. Naturally, you're wondering what all the fuss is about.

Alphabet's (GOOG) (GOOGL) Google is reportedly working on a stand-alone virtual reality headset that wouldn't need a smartphone, PC or game console to work, which would be an industry first. There have been hints Apple (AAPL) is working on something in the space, which if true, could be the company's next big product.

Meanwhile, Facebook's (FB) Oculus Rift appears to be an early hit, with the device back-ordered all the way until July. And HTC Vive/Steam captured more than its fair share of attention at CES in January, and Samsung's $99 Gear VR was one of the top sellers on Amazon this holiday season.

There are also augmented reality platforms, like Microsoft's (MSFT) HoloLens, which is really a mixture of both virtual and augmented realities, or Magic Leap, which Alphabet (the artist formerly known as Google), led a funding round in. More recently, Magic Leap raised $793.5 million in a Series C funding round, led by Alibaba.

(Update: Intel (INTC) is working on an augmented reality headset that will make use of its 3-D camera technology, known as RealSense, according to a March 2 report in The Wall Street Journal. An Intel spokesperson said the company had "nothing to share at this time.")

 

This video is an example of what Magic Leap's augmented reality can do.

Even though augmented reality and virtual reality sound the same, why should you, the average person on the subway or bus, give two hoots about the differences?

Simple.

The two technologies are really very different and could mean different things to tech giants like Facebook, Apple or Google, completely changing the way they enter the market and move forward in the future.

"The experiences between the two will be different," Gartner Research Director Brian Blau said over the phone, stating that in the beginning, virtual reality will be more for video games and tasks that use lots of computer graphics. "On the augmented reality side, it could be something like building a table in your workshop and then seeing information on top of the table that would help you build it more efficiently."

With augmented reality, images or graphics are "open," meaning they actually emerge from a device into the real world. By comparison, virtual reality is often seen as images that are "closed," or inside a device, usually a headset.

The tech behind the two is really where it gets interesting -- for virtual reality, much of what you see has been out there for a while, Blau noted, including things like the glass and the chips. For augmented reality, though, the display and sensors are just not as developed from a tech standpoint as the tech is for VR.

There's been tons of buzz surrounding virtual reality/augmented reality and the fascination is about more than just the nerdy kid in high school dreaming of having a date with the high school cheerleader.

Google Cardboard, introduced in 2014 at its developer conference, has aided the education market, thanks in part to its low cost and also to Google's continued push to expand its software capabilities, including Google Expeditions, its education-focused virtual reality curriculum.

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A post on Quora, the popular question-and-answer forum, from Kundan Kumar (who works at Adstuck, a augmented reality firm) from gives an excellent explanation on the differences between the two:

Read Kundan Kumar's answer to What is the difference between augmented reality and mediated reality? on Quora

When announcing the new investment, this quote from Magic Leap Founder, CEO and President Rony Abovitz really drives home the point of what augmented reality is:

"Here at Magic Leap we are creating a new world where digital and physical realities seamlessly blend together to enable amazing new experiences."

Think about that for a second -- it's combining something digital and physical to show something that's never been seen before in the real world. That's an incredibly powerful statement and showcases the power and potential of augmented reality. Augmented reality could not only be big in gaming, as virtual reality is likely to be, but also in areas like education and other commercial applications, Jackdaw Research analyst Jan Dawson said via email.

Tech M&A advisory firm Digi-Capital expects the augmented/virtual reality market to explode, hitting $120 billion by 2020, with the large majority going towards augmented reality.  

Virtual reality is likely going to cater more towards games as well as content, such as movies or TV shows. Imagine watching Jurassic Park in virtual reality and you can begin to see how cool it might be. The cost won't be too high, likely to be close to what it costs you to buy an Xbox or Playstation, according to Digi-Capital. That puts the potential for tens of millions of hardware units to be sold.

On the other hand, augmented reality could reach hundreds of millions of users because "is more about enhancing your actual environment," Dawson noted, and cost no more than a smartphone or a tablet. Though the Microsoft HoloLens or anything from Magic Leap aren't available to buy just yet, the HoloLens is slated to ship its developer edition in the first quarter this year, for a cool $3,000.

The chart below details where the money is likely to be spent on both augmented and virtual reality, with hardware capturing a significant portion of each submarket.

Even with the significant promise of the pending augmented/virtual reality revolution, it's gotten off to a rocky start.

Google Glass, an optical headset that went on sale in April 2013, was widely castigated because of privacy concerns, particularly when they were worn in public. There were fears people could be recorded unknowingly or be able to identify strangers using facial recognition technology or have their picture taken without their consent.

"Ultimately, the best approach to these virtual worlds will be to offer what is called mixed reality or a solution in which VR and AR are both part of the experience," said Tim Bajarin, President of tech research firm Creative Strategies. "Microsoft's Hololens is a good example of this."

It's clearer than ever that we're looking for new ways to learn, interact with our environment and be entertained, with virtual reality and augmented reality likely to play huge roles in shaping our future. Just be careful which one you're talking about.

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