The document summarizes key developments in virtual reality (VR) in 2017 and makes predictions. Some of the main points covered are: - VR adoption is accelerating but is still in the early innings, with high-end systems seeing slow adoption due to lack of killer apps and issues like low resolution. - 360 video and mobile VR are areas that will see significant growth in 2017. New products will lower costs and improve ease of use. - Major new announcements from companies like Microsoft, Apple, Google, and Magic Leap could reorder the VR/AR landscape. - 2017 may be a breakout year for augmented reality as it addresses limitations of VR like being less restrictive to wear.

1. Crossing the Chasm
What’s New For VR 2017
Pitfalls, Promises, Phones, Known Unknowns
& Big Predictions
Charlie Fink
Contributing Editor, VR Voice
@charliefink
http://medium.com/@charliefink

2. About Me
• Industry Analyst, Contributing Editor, VR Voice, 2016-Present
• Founder/CEO Charlie Company Internet Marketing 2005-15
• President, American Greeting Interactive, 1999-2004
• SVP AOL, 1996 – 1999
• EVP & COO, Virtual World Entertainment 1992-1996
• VP, Walt Disney Pictures, 1986 – 1992

3. These Things I Know Are True
• VR has been overhyped for 20 years
o Example of hype: Unity says 770 Million people are using its VR platform
o The hype will become real.
• The killer app is people
o Social Media
• Technology and New Media succeed when they
make what we are already doing better, cheaper
and faster
o Email & Messaging, Music, Photography, Travel

4. VR/AR/MR Definitions
• VR = A world which replaces this one
• AR = Overlays digitally created content onto the users
real world
• MR = Where the digital and real worlds interact
• 360 Video = Allows users to look in every direction
around them
• Immersive Experience = A deeply engaging multi-
sensory experience delivered using VR, AR, MR, 360
video, and other technologies

5. The Big Picture
• The quest for the Seamless
o We look at our phones 100+ times a day
• The Network effect
o You have to be there
• Internet of Things
o Your cloud of devices and data are the hub of your life
• Artificial Intelligence
o Things knowing you more than you know them
• Wearables
o Hands free mobile computing
• The Fourth Transformation
o Mainframes, PCs, Smartphones, and…

6. Consumer Technology
Adoption Rates

7. ADOPTION RATES ARE ACCELERATING

8. 2015 & 2016 SAW A LOT OF EXCITING,
SEXY PRODUCT INTRODUCTIONS
- Oculus Rift
- HTC Vive
- Playstation VR
- 52MM VR ready PS4s already sold
- Samsung Gear (partnership with Oculus)
- 5M shipped in 2016
- Google Cardboard
- 20 million
- Google Daydream

9. But 2016 Was Not the Year of VR
• Expense
o This shit is expensive
• Ease of Use
o High end systems hard to use
o Advantage mobile – plug and play
• Ergonomics: heavy, restrictive, tethered
o Advantage: mobile
• Frame Rate Issues & Low Resolution
o People are still getting nauseous
o Poor optics create a “screen door” effect
• Crossing the “Chasm”
o Are we even there yet?

10. TECHNOLOGY ADOPTION LIFECYCLE

11. VR 2017 Developments
• 360 Video Is Going Accelerate
o Will be driven by consumers, not professional producers
• Applications Explosion
o SDKs in the hands of 1000s of developers
o More & better native VR software
o VR Movies, Storytelling, Animation & Art
• Continued Growth in Business Use of VR and AR
o Medical, Design, Travel, Military
o Business users become home users
• Location Based Entertainment
o IMAX VR, HTC, UniVRS
o The Void & Zero Latency: free roam, warehouse size VR
• Prices are Going Up, not Down
o More, better high resolution headsets are coming to market
o Needed peripherals: wireless, multipoint input
• Slow Adoption of High End Systems Continues
o Playstation VR (52 MM install base)
o No killer app (probably social)

12. VR/AR Ecosystem Exploding with New Products
• Developer Support
o Economics, OSVR, Unity
• Peripherals & Haptics
o Data gloves, rings, treadmills, VR shoes, Wearables, Multi point (HTC)
o Untethered headsets (Kwik VR, IMR)
• Eye Tracking
o SMI, Eyefluence (Google) and The Eye Tribe (FB)
• Social VR
o Second Life, AltSpaceVR
o Facebook in 3D
o Oculus Rooms

13. End of Report
Start of Predictions
We are only in the second 2nd Inning of a long game.

14. 360 Video Will Hit an Inflection
point in 2017
• Low cost to producers & consumers
• Amazing CES product introductions
o Vuze, Giroptic
• New Feature of Digital Photography (already huge)
o Facebook and You Tube support
o Great for travel, sports
• Improved and cheap editing software
• Lots of corporate activity
o NY Times, Discovery, Gannet/USA, Movies/TV producer
• By 2018, 360 will be everywhere

15. Mobile VR Growth Will Accelerate…
• Gear, Daydream are under $100
• Plug and Play
• Mobile and 360 Video Are Homies
o You don’t need a headset, either
• Latency an issue on mobile, but…
o Qualcomm Tango (Google) based on Snapdragon processor
• Qualcomm Snapdragon & Google Tango
o AR is about to explode onto our phones (Samsung 8, Lenovo)
• Much Bigger Market, Harder to Monetize
• The Carriers Will Become Players
o Communications is the base functionality

16. New Announcements Will Reorder the Deck
“It’s all about the guys at the top of the pyramid.” – Tim Merel, Digi-Capital
• Microsoft
o Microsoft 10 is a VR and AR platform
o OEMs promising $500 devices similar to Hololens for MS OS
• Apple
o iPhone turns 10
o Buying up AR companies
• Google
o Daydream, but Magic Leap
o Eyefluence
• Oculus (Facebook)
o Samsung VR sold 5MM GearVR headsets
o Soft sales for RIFT (and 4 BN lawsuit)
• ODG
o Hololens patents
o Under 1000 AR glasses
• Magic Leap
o 1.3 Bn invested, including 400MM from Google

17. 2017 May Be the Year of AR
• AR Leaders Strong in the Gate
o Snap, Inc. is the first AR Empire
o Pokemon Go made ONE BILLION DOLLARS
o Holoportation is nothing less than pure magic
• AR Advantages over VR
o Plug & Play (on the low end)
o Less restrictive to wear (more like glasses)
o Better, clearer optics
o Sanpdragon phones will work magic
• Big AR Announcements Due This Year
o Known: ODG, Apple (predicted)
o Unknown: Magic Leap, or… ? Sony Future Labs – Concept T (Q4 17)

18. VR/AR Ecosystem

19. The Future’s So Bright, You Goba
Wear Shades