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Since day-1, the idea behind gaming has been simple – provide players with an enjoyable, albeit fleeting, escape from reality. Naturally, with 76 years passing since the ‘Cathode-Ray Tube Amusement Device‘ was released, games have gotten better at doing so as advancing technology has allowed for them to become increasingly immersive. Today, this has culminated in widespread use of consoles boasting computational power that would have been unimaginable not long ago (thank you Gordon Moore and Theodore Wright).
However impressive consoles may have become though, there is always another step forward to take. Below, we take a look at this next step in immersive gaming – virtual reality (VR).
Manufacturers and Innovators
Before taking a closer look at how VR stands to change the way we game, make sure to check out the following publicly-traded companies; each of which are playing a pivotal role in the development of immersive gaming.
Since 2014, Meta (formerly Facebook) began positioning itself as a giant within the burgeoning VR industry with the acquisition of Oculus. In the time since, Meta has gone on to produce some of the most impressive hardware on the market with its lineup of ‘Quest' devices.
Meta is based out of California, United States. It employs ~85,000, and boasted revenue topping $116B in its last fiscal year. Notably, shares in Meta are up ~70% YTD at time of writing.
Sony is a lynchpin within the tech industry both at the forefront and behind the scenes. Not only does Sony produce the worlds most popular gaming console (PS5), it is a major supplier/developer of camera sensors, display technology, audio formats and more.
Sony is based out of Tokyo, Japan. It employs ~109,000, and boasted revenue topping $9.9T in its last fiscal year. Notably, shares in Sony are listed as a ‘Buy' by most major investment firms at time of writing.
Over the past 15 years, Apple has massively influenced modern communication through devices like the iPhone. It has also helped to lay out a blueprint for establishing a devoted following through development of high-end products which boast near-unmatched integration across its entire lineup of devices.
Apple is based out of California, United States. It employs ~164,000, and boasted revenue topping $394B in its last fiscal year. Notably, Apple has boasted positive sales growth in all but one of the past 5 years.
Digital Leisure Spending
In its recently released ‘Big Ideas 2023‘, ARK Invest highlights a few key trends within ‘digital leisure spending' which it believes will prove to be quite lucrative for well-positioned investors in the coming years. These include connected TVs, social media platforms, sports betting, and of course – gaming.
With regards to gaming, ARK Invest states,
“The convergence of video games and social media should sustain gaming revenue growth. Video games should provide end-to-end virtual entertainment that rivals physical experiences.”
Notably, ARK Invest believes that advances leading to virtual experiences rivaling physical ones will be aided by the convergence of gaming and social media. As we see the rise of the metaverse and ‘virtual worlds', gamers will no longer need to communicate through standalone apps. It will simply be easier, quicker, and more personal to communicate through virtual environments reminiscent of something you would see in ‘Futurama‘ or ‘Ready Player One'.
With this being the case, ARK Invest believes that the 7% CAGR boasted by the gaming industry over the past 5 years may be supercharged to 10% in the next 5 to come as gaming becomes more immersive through integration of social media. If these projections by ARK Invest for a CAGR of 10% come true, immersive gaming may prove to be one of the few areas within tech that is able to outpace high inflation.
Interestingly, despite the rise in VR over the past 5 years, its origins date back much further. Nintendo's ‘Virtual Boy' is often regarded as the first major attempt at a commercially produced precursor to modern VR. Unfortunately, when released in 1995, the unit was ahead of its time as the technology available was not advanced enough to realize the potential of what VR could offer.
In addition to Virtual Boy, there were other notable attempts at VR from years past which include the ‘Sword of Damocles' in 1968, and the ‘EyePhone 1' in 1989.
For immersive gaming to continue advancing, both hardware and software need to improve. This means leveraging AI, incorporating technologies like real-time eye tracking, high resolution fast refresh screens, and more.
For now, lets take a look at two of the most important options on the market today which are able to offer a balance of performance, accessibility, and appeal. Of note are various other big-name companies like Apple also have similar products as those listed below set to launch in the coming months.
Right off the bat, the PSVR2 holds great appeal since it works in unison with the PS5; meaning anyone that owns Sony's latest console is already invested in the PlayStation ecosystem.
Integration with the Ps5 isn't all that the PSVR2 has going for it though. A huge leap forward from its predecessor, this unit boasts some of the best hardware on the market with features like dual 2K OLED screens, eye tracking, and more.
After considering the capabilities of the PSVR2, one might wonder what Google Cardboard is doing on this short list. Literally made out of cardboard, these VR headsets allow for a cheap and accessible introduction to the technology for anyone that has access to a smartphone.
With cost currently being a major deterrent to VR adoption, this is huge. Such offerings are what will allow for VR to be introduced in environments beyond game (ie. Education), which we will touch on later.
Much like modern headsets which have built upon concepts from as early as the 1960's, the idea of increasing the immersion of VR through use of peripheral devices/adjuncts has done the same. Just look to the ‘Data Glove', which was patented in 1982 by Thomas Zimmerman, who was an employee of Atari at the time.
Increasing immersion boils down to one thing – catering to your senses. This means enveloping more than just vision into the world in which you are playing your game. It means incorporating audio, tactile feedback, and more. The following are a few ingenious examples of this which can take VR gaming to another level.
The idea behind Woojer is to ramp up immersion by introducing in-game tactile feedback through use of haptics built in to a lineup of straps and vests. As the company states, it allows you to ‘feel the sound'.
It may sound like a novel idea at first, but when combined with high-end visuals and audio, adjuncts like the Woojer can help to take immersion to another level.
Not a fan of wearing a vest to feel those in-game impacts? Then check out Buttkicker by Guitammer. This company offers a variety of products which utilize tactile transducers to allow listeners to literally feel the game they play. These devices can be placed under a couch, attached to a gaming chair, or even in a car for regular music experiences.
The use-case for such devices goes beyond just enhancing in-game impacts. With the human ear typically capable of detecting sound between 20hz-20khz, there are clear limitations. Devices like the Woojer and Buttkicker function well below what the human ear can hear, allowing for gamers to detect and feel in-game explosions, the rumble of vehicles approaching, etc., that would otherwise go unnoticed.
While tactile feedback is an important aspect of audio, there is much more to it than that. Traditionally we listen to audio in 2 dimensions – left/right, front back. Recent advancements have allowed for things like Dolby Atmos to become more common, providing an extra dimension to our listening habits – height. By adding this third dimension, the sound of objects can be ‘placed' all around the listener.
Spatial audio is the next big step forward. This allows for real-time adjustments in object placement based on the positioning of the listener. For example, this means that if a user playing a game in VR hears an object behind and above them decides to turn around, it will now sound as though it is in front and above them. Essentially, spatial audio allows for sound to become interactive, which is something that can do wonders for immersive gaming.
Among companies that are involved in VR, Sony and Apple are currently regarded as leading the way with development of spatial audio.
Immersive VR has the potential for adoption well beyond the gaming industry. As headsets continue to improve in quality and drop in price, there are an increasing amount of applications where their use is now feasible. These range from engineering, to sporting events, military applications, and more. The following are a look at two of these applications which hold massive potential.
When considering care of the physical body, VR will be increasingly used in time by Health Care providers like surgeons as they will be able to train for performing taxing and dangerous procedures in a risk-free and realistic environment.
From a cognitive standpoint, VR will/can be used to provide meditative and restorative services. This may be presented as something as simple as standing on a serene beach, or more unique approaches like experiencing what it is like to die – something meant to provide a meaning full perspective on life.
When VR first becomes prominent in the classroom, it will be through use of something like Google Cardboard. It is common knowledge that no one learns the same. Some thrive off of the written word, while others are more visual. VR offers a solution to this by allowing for users to be transported into different environments.
What better way to learn about the Roman empire than to step foot into a recreation of the Colosseum during its prime?
What better way to understand past societies than to be immersed in one?
What better way to experience the desolation of another planet than to step foot on ‘Mars'?
VR has the ability to not only enhance the way we learn, but open new doors to possibilities only now feasible.
While the future potential of VR remains tantalizing, the present is still a struggle. As it stands, VR is a luxury that has not yet become ingrained in our everyday lives like smartphones.
With households currently struggling to cope with inflation, increasing costs of education, and the idea of owning property a dream for most, VR isn't currently at the top of most peoples ‘must-buy' list. Just look to the PSVR2 which, despite being widely heralded as the best overall VR option available today, has massively underperformed in sales volume since launch, selling a mere 270,000 units out of an originally expected 2,000,000 by this point in time. Combined with various companies (ie. Disney) taking a step back from their metaverse ambitions for now, and it becomes clear that industry participants still have work to do on increasing the value proposition of such products.
However, this slow start is not a condemnation of the technology. It simply highlights that despite massive strides being made in the past few years, there is still so much more room for growth.
With this being the case, savvy investors still have time to gain exposure to companies making such efforts and jockeying for position in a sector that will one day see VR become an everyday reality for education, healthcare, etc. – and it all starts with immersive gaming.