AR, VR, MR, XR: Demystifying and revisiting Immersive Technologies in 2021

Yet again in 2021, there is lots of noise around immersive technologies. It makes one wonder what the current state of play is in 2021 – let's revisit and demystify this. 

In emerging technologies, it becomes important to get the timing of the “Tipping Point” right. If one is too early, one runs out of resources, if too late, opportunity is gone. One can refer to various models on emerging technologies hype cycle for more information- a popular one being Gartner’s hype cycle for emerging technologies.

What do we mean by “Tipping Point”? - it is when widespread adoption starts to happen. 

So, what’s the current state of play of Immersive Technologies? And what do we mean by Immersive Technologies – is it Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR), Extended Reality (XR)…...? or all of the above.

XR is now a generally accepted term for all types of realities including VR, AR, MR. 

MR was the common term representing all realities earlier - it included different points along a spectrum as we go from real world to a virtual world and keep adding digital content. Starting from the real world, the first milestone along this spectrum is Augmented Reality (AR), the next Augmented Virtuality (AV) and finally Virtual Reality (VR) where we are totally in a virtual /digital environment. 

XR now includes MR and anything else related to a much used/ misused term “Metaverse”!!! Now, what is “Metaverse”?

Metaverse is a fusion of real world and all types of realities – AR, AV, VR, MR, XR, Internet ++. In this “Metaverse'', we oscillate from the real world to a virtual world for experiences as well as get these experiences to the real world. In 2018 Steven Spielberg showcased “OASIS” in his movie “Ready Player one”. “OASIS” was a symbolic version of a metaverse. 

There are billions of dollars being spent on “Mini- Metaverses” – e.g., Facebook’s “HORIZON”, Epic Games “FORTNITE”, Microsoft “MESH” and many more. Of course, one does wonder whether these mini metaverses will ever talk to each other? How many mini metaverses would one like to be a part of?

Anyway, back to the real world of Immersive Technologies. Despite being around for 25+ years, the taxonomy of immersive technologies is still emerging, standards are still emerging – so what has changed in the last couple of years.

Well, 5G is the game changer for XR. What is 5G? – it is the fifth generation of mobile network technology. 5G addresses the latency aspect in XR, enables some of head mounted device functionality to go to the cloud etc. 

5G is at different stages of implementation all over the world. It will take 7-8 years to come to full functionality as it requires a whole new ecosystem to be built around it. So, we see 7–8-year roadmap for XR with the tipping point happening in 2-3 years. There are equally strong projections for XR for B2B and B2C in the 5G world. At a lower level, there are equally good projections for VR and AR, though AR comes up quite strong. Of course, being a futurist is a mug's game.

We also see Telecom companies being important players in the XR ecosystem – building 5G at infrastructure level and offering XR to the last mile at content level.

So, we are now in the sweet spot where an emerging technology like XR, which has been around for the last 25 years, is now heading for a tipping point in 2-3 years. There is so much happening under the radar which will start becoming apparent in 2-3 years.

However, even for the next 2-3 years XR related revenue will still be difficult to come by as the demand side is still struggling to understand the business and/or consumer value of XR and the supply side is full of startups who no one knows outside the niche they operate in. In fact, very few really know what is happening in the XR ecosystem. 

There are a large number of XR entities- 1500 in Australia, 2500 in India, 3500 in China alone. 80% of these tend to be start-ups with headcounts of anywhere between 1 – 25 people. And 75% of these 80% tend to be bootstrapped.

There is currently an imperfect market with information asymmetry between demand and supply. Revenue will still be difficult to come by in the next 2-3 years as XR heads for the tipping point. On the delivery side, there are niche skills required like 3D modelling, UX/UI, Unity, Unreal etc and finding the right skill at the right time at the right place and at the right cost can be challenging. The focus for XR entities in the next 2-3 years has to be on brand building. The challenge though is who pays the bills while following your passion.

There are two types of XR solution providers. Some are only XR focused, whereas others have another line of business generating revenue with investment in XR as a way of protecting their future.

On the enterprise demand side, 10% are doing interesting work in XR, 20% are dipping their toes and the remaining 70% are trying to understand the business value.

For XR, we are seeing at one end, a futuristic trend towards metaverse deploying deep tech. At the other end we have simple low-cost AR apps which are helping large number of people – some examples being AR heat maps for high criminal activity in specific parts of a city, AR app for installing Oxygen cylinder at home in times of severe delta covid outbreaks.

Digital twins are another emerging trend. At B2C level this takes the shape of avatars and holograms. At enterprise level, Digital Twins are an exact digital replica of a physical product/system. Here XR blends with IoT (Internet of Things) and AI/ML (Artificial Intelligence/ Machine Learning) by leveraging sensors attached to the real product/system to send data points to the digital twin helps in tracking current and predicting future performance.

Economic activity in the virtual world is also seeing high growth though from a low base. Leveraging NFT (Non-Fungible Tokens) and Blockchain technology enables validating authenticity and ownership in the virtual world. Artworks have been leading in this with real estate /other asset categories following through.

One of the key challenges is Cybersecurity. There are many players involved in the XR ecosystem – hardware, software, rendering engines, content, apps, platforms - Who is looking at cybersecurity from an end-to-end perspective can often slip through the cracks.

(Stay tuned for more updates in the next article...) 

The article is authored by Pradeep Khanna, CEO, Global Mindset. Pradeep is Executive Director APAC, Sydney Chapter President & Global Co- Chair Education for the global Virtual Reality Augmented Reality Association (VRARA)