Investment in AR/VR
There is a fear that the current interest in AR/VR is just a fad, and that all the hype masks poor sales and a general lack of public interest in the technology. Absences from key showcases, such as the 2017 Electronic Entertainment Expo (E3), by major players such as Facebook-owned Oculus, and price slashing for VR hardware by HTC, Oculus and Sony implies a lack of confidence in the public’s desire for VR. Sony announced in October of 2017 that it had sold a million VR HMD’s for the Playstation 4, which, as Daniel Van Boom (2017, November 16) of CNET points out “... sounds great, until you realize there are almost 68 million PS4s in the world. In other words, about 98.5 percent of PlayStation owners have not yet taken the virtual-reality plunge.” However, this lack of sales has not halted the continued development of both AR and VR technologies nor restricted the exponential growth in investment, much of which is currently being driven by AR. |
So what are the numbers?
Investment in AR and VR is in the billions of dollars, both for start-ups and long established companies that are either breaking into the AR/VR market or are refining their existing technologies. According to market analysts Digi-Capital, AR/VR has the potential to be a $108 billion US market by 2021, with AR forming the core of the projected market at $83 billion and VR the remainder at $23 billion. In response, venture capitalists have invested over $2.3 billion by the end of 2016 in AR/VR start-ups, and an additional 3.0 billion in 2017. A breakdown of the investments reveals that AR/VR hardware start-ups, such as head mounted displays (HMD’s) were the primary recipient of funding, receiving approximately 45% of the $2.3 billion invested in 2016. Therefore, the bulk of the money went to the AR as VR hardware industry, which is already dominated by major companies. Services and solutions, such as VR/AR programming environments and graphics engines, took a healthy 20%, while VR video companies, including 360° video also took in over 10%. The remainder of the 2016 funding was divided up between VR/AR gaming, peripheral devices, app development and other smaller scale industries. While the development dollars spent by companies already established in the AR/VR market tend to be more confidential, it is known that in addition to investing in technology development, major companies such as HTC, Samsung and Oculus (Facebook), as well major media developers such as Comcast, Time-Warner and Twentieth Century Fox, are all investing in smaller AR/VR content producers (Pulse on VR, 2017, June 28). |
This is an example of SESQUI's 360° Videos. Once you begin playing it, you can maneuver through the video by clicking and dragging your mouse. Feel free to explore as much of this as you like.
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Not-for-profit funding in Canada
While options for investment outside of venture capitalists remains somewhat limited, both the Canadian federal government and private media distributors do support the creation of educational and Canadian-content oriented AR/VR through groups like the Canada Media Fund (CMF) and the National Film Board of Canada (NFB). CMF in particular has donated over $24 million Canadian to 59 AR/VR projects since 2013 (CISION, 2017, March). Further, other federal government funding programs, such as Canada 150, have also been utilized to support AR/VR projects, such as SESQUI (sequi.ca), a collection of learning resources and 360° videos that present “...an immersive journey into the heart, soul and future of this great country.” |
What does the mean for Education and Educational Investors?
While data on dedicated educational AR/VR investment is scarce, there is significant opportunity for crossover between AR/VR technology, content and production applications intended for entertainment and business with the education and training fields. As hardware becomes more ubiquitous, and content more widely available, more media producers will be willing to produce documentaries and educational/training applications utilizing AR/VR. Further, the increased access to HMDs will also encourage other government supported providers/funders of educational and Canadian content, such as the NFB, to invest further in the support of AR/VR content. |
While touching on business investment in AR/VR in general, funding of AR/VR for education and training is focused on at timestamp 4:25.
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Activity: Reviewing AR/VR Investment Opportunities
Listed below are links to three separate Kickstarter campaigns that are seeking funding for AR/VR related technology or applications. Take a few minutes to briefly review each by watching their "elevator pitch" summary videos and then respond to the question below.
Listed below are links to three separate Kickstarter campaigns that are seeking funding for AR/VR related technology or applications. Take a few minutes to briefly review each by watching their "elevator pitch" summary videos and then respond to the question below.
MAD Gaze
AR Smart Glasses |
Goodnight Lad
AR Children's Book |