The Challenges of Mass Market Adoption for VR and AR
Virtual and augmented reality have long been touted as exciting new technologies that could upend platforms firstly in gaming, like PC and console. But mass market adoption has so far been a challenge.
Meta has gradually been building a market of millions of users – the Meta Quest range has sold approximately 20 million headsets to date – but it’s been a slow burn, with reported low levels of engagement and retention from owners becoming a critical issue.
Meanwhile, augmented reality has yet to take off for gaming. Niantic’s multi-billion dollar hit Pokémon GO is the clear flagship title for the technology, but to date, no other title has been able to match that success, or even come close. As for AR headsets, any attempts to launch consumer hardware have failed.
Immersion and Artificial Intelligence: Unlocking VR’s Potential
One of the main selling points for AR and VR is immersion, whether in an augmented real-world environment or an entirely virtual space. Along with graphical fidelity, artificial intelligence (AI) is key to creating these experiences.
AI is being used to create different worlds and characters that respond and adapt to the user’s presence, thereby increasing immersion. Cracking this element is one of the keys to building VR’s killer app.
A new generation of immersion… Lead by gaming
Non-playable characters (NPCs) and enemies are powered by AI, and how they interact with players can shape the entire gaming experience and make or break immersion.
Slowly, we are seeing the introduction of NPCs across other industries. In simulation situations, often for training purposes, virtual agents are used who have characteristics, abilities, and actions that closely mirror those of NPCs in games. The characters are assigned certain behaviors, which they then exhibit within the simulation. In the recruitment process or training simulation they can bring a once dry and formulaic experience to life. As the adoption of AI in business grows, NPCs will be used in areas of the business that require an injection of creativity to drive engagement.
AI’s Impact on NPCs: From Gaming to Business Engagement
While NPCs are not to be confused with bots, AI is also set to change the evolution and experiences possible through the use of chatbots, which are often used in customer help desk situations. Meta recently launched Messenger for its AI studio, which allows companies to create AIs that reflect their brand’s values and improve customer service experiences. While this product is currently in Alpha testing, celebrities, such as Snoop Dogg, Kendall Jenner, and many more, are said to be available as AI characters to test. This will make AI chatbots more personable and interactive and strengthen customer brand engagement and experience.
AI can also be used for creating more dynamic experiences, such as cueing dynamic music based on actions, or for raising and lowering difficulty levels in simulation training. It can even take things a step further, adapting the simulation or training, based on progression, play styles, and preferences.
Generative AI is a cutting-edge technology, which most recently became widely popular through large language models like ChatGPT and image generators e.g Midjourney – but the capability of the technology is so much more. The technology can be harnessed to create unique responses to prompts and actions to build unique experiences and is being used across a wide range of industries. However, ethical issues around images and data used without consent (which is a possibility for some models) are a grey area that has caused contention across many industries and is something that governments globally are looking to address with regulation for wider global implementation and innovation to be driven through the technology.
The Role of AI in Creating Dynamic Experiences
AI agents are already being used across several sectors – from architecture (Chinese architectural AI XCool recently launched LookX) to automotive, with examples in leading brands like Tesla where AI is used for innovative safety features. AI can dynamically interact with users based on predefined actions and responses, choosing the most appropriate reaction for the situation. This can be utilized for a variety of experiences, such as guided tours or even simply customer support. In VR, where immersion is a key selling point, the opportunity to have more individualized and personable interactions with NPCs and other AI agents could help improve this further.
There are also other possibilities once generative AI tools make it into developer workflows. Whether based on external or internal content libraries, the technology can power the creation of new art assets, visual effects, and more, assisting artists with their work in crafting immersive worlds.
AI and AR: Powering the Next Generation of Killer Apps
For AR, AI is used to help seamlessly add augmented content to our surroundings in the virtual space. For many, the introduction of AR was led by the launch of Pokémon Go in 2016, played on mobile and allowing users to interact with objects in the real world around them, to monsters scaling and destroying buildings or just artwork on a wall, AI is the critical element in AR simulation adapting to the physical world.
Developments around AI come at an interesting time for the VR and AR markets. Meta has been leading the charge in the VR market, with a third iteration of its Quest headset due to be launched imminently. Apple is stepping into the sector with its mixed reality – or as it calls it, ‘spatial computing’ – headset Apple Vision Pro, which itself could be a game-changing moment.
Niantic and a host of other tech giants and start-ups are also hard at work developing new, groundbreaking AR technology that can power future experiences on headsets and smartphones. We are also starting to see a breakthrough in the consumer fashion/tech space with the recent announcement from Ray-Ban on its smart glasses with two 12-megapixel cameras by each eye and an LED light that flips to alert others that you’re recording. The next iteration of this product will include AR technology. With the ability to livestream through the glasses to friends and family and over 150 design options, the glasses will retail at around $300, a similar price to much of the brands’ standard range. We will then finally start to see the cost of VR/AR products to the consumer market reducing over time to become more accessible.
While the AR and VR market ultimately became one that was too expensive or complicated, we are certainly seeing a resurgence, with AI powering the next generation of killer apps that AR and VR sorely need to improve engagement and hit the mass market with several exciting applications outside of the gaming world.
Analyst comment
Positive news: The Role of AI in Creating Dynamic Experiences and AI and AR: Powering the Next Generation of Killer Apps
Negative news: The Challenges of Mass Market Adoption for VR and AR
Neutral news: Immersion and Artificial Intelligence: Unlocking VR’s Potential and AI’s Impact on NPCs: From Gaming to Business Engagement
As an analyst, the market for VR and AR is expected to grow as AI technology advances and improves immersive experiences. However, mass market adoption remains a challenge due to low engagement and retention levels. The introduction of NPCs and AI chatbots in various industries will drive engagement and improve customer experiences. The development of new AR technology by tech giants and more accessible VR/AR products will contribute to the market’s expansion.
