Dive Brief:
- Augmented and virtual reality (AR/VR) is off to a hot start in 2016, reaching $1.1 billion in investment in January and February alone, making this the first year the figure has topped $1 billion with ten months to go, according to Venture Beat. AR/VR investment over the entirety of 2015 hit just $686 million.
- The majority of this year's total investment figure came from one deal — Magic Leap’s $794 million investment round — but even without that deal, AR/VR investment would still be up 20% over Q1 last year.
- The future for AR/VR looks bright with Tim Merel, managing director of Digi-Capital and CEO of Eyetouch Reality, predicting that total revenue in the space will hit $120 billion by 2020.
Dive Insight:
After years of promise with very little to show for it, AR/VR technology may be finally coming into its own. The trend is driven by in part by the mainstream availability of different tech options, such as Google Cardboard and Samsung Gear.
A recent eMarketer report, “Virtual Reality and Beyond: The Current State and Future Potential of Immersive Digital Marketing Experiences,” found that virtual reality (VR) has become a viable option for immersive marketing and that marketers should begin experimenting to stay on top of the trend. The technology is seen as having the most immediate impact on complex B2B sales. Virtual reality can enhance storytelling in marketing messages as well as provide highly interactive demos of high-dollar items.
At the same time, one of VR's biggest advocates, Facebook CEO Mark Zuckerberg, recently threw a little cold water on how rapidly the technology will become widely adopted. “I honestly don’t know is how long it will take to build this ecosystem. It could be 5 years, it could be 10 years, it could be 15 or 20. My guess is that it will be at least 10. It took 10 years to go from building the initial Smartphone to reaching the mass market,” he told Business Insider.
That said, Zuckerberg is bullish on the technology's long-term value. Facebook purchased VR firm Oculus Rift in 2014 for $2 billion. “We are betting that Virtual Reality is going to be an important technology. I am pretty confident about this,” he said in the same interview.
