Virtual Reality and Augmented Reality

Virtual Reality and Augmented Reality
“When I put on the goggles, it’s different from anything I have ever experienced in my life” - Mark Zuckerberg, CEO of Facebook

Virtual reality (VR) and augmented reality (AR) were previously considered to be the typesof gadgets you saw in science fiction films or utopic worlds. However, today it is a prominent reality which is becoming increasingly integrated into our everyday lives for a myriad of purposes.

This has been made possible through the rapid acceleration of technology and hardware, as well as the recognition of all the potential, life changing applications. AR and VR will disrupt several different industries by changing the way companies do business, increasing employee productivity and reducing overall expenses. The AR and VR market is predicted to produce global revenues of around $150-160 billion by 2020 – a 100% increase over the next four years,which is clearly a testament to how important it will be in the coming years.

What is the difference between AR and VR?

While the two terms are often used interchangeably to describe these new forms of technology, it is important to understand and maintain the distinction between them, as they each serve different purposes and functions.

Virtual reality (VR) is a completely digital experience which uses software to generate simulated environments or recreate situations, to resemble our reality or something beyond our reality, such as outer space. Users don’t simply view content, but are immersed in VR by a visor that blocks out surrounding visual inputs, and often headphones that control auditory inputs as well. There have also been instances in which users stand on platforms that rock and vibrate too, or have artificial sun and wind targeting the user, in order to emulate a specific situation and create a fully immersive 4D experience.

  • Some current examples of VR:
  • Neurable has created a mind-controlled VR game – eliminating the need for controllers.
  • Medical applications:
  • Autism treatment – Blue Room uses VR to surround sufferers with a 360-degree representation of the ‘real world’, which allows children to become more comfortable with everyday activities  such as riding buses, crossing roads and visiting the shops.
  • Aid for cancer sufferers – It helps patients cope with stress and pain relating to cancer treatment, by training them in managing stress, providing understandable information to help them feel more comfortable and calm.
  • Reducing PTSD symptoms through exposure therapy – A patient is guided by a therapist through environmental simulations that caused them trauma e.g. Middle Eastern cities, desert roads.

On the other hand, augmented reality (AR) is a blend of digital/virtual components into the real world, with an intent to create interesting interactions between the two. It takes reality as an image or video, and adds a new digital 3D layer with special effects and features, to allow users to visualise digital components as if they were in real life.

  • Some current examples of AR:
  • The US Army uses AR to aid sensor operators to locate people or points of interest. This is done by combining fixed geographic information (such as street names, airports, railroads) with live feed from the camera. Pilots also have information such as altitude, airspeed and a horizon line displayed on a screen before their eyes.
  • Medical students use AR to practice surgery in a controlled environment
  • The ‘world record’ and ‘Olympic record’ line frequently seen following competitors in the Olympic swimming races is one well known example of AR.
  • In their latest update, Snapchat allowed users to interact with digitalised versions of themselves in real time.

Consider the following

  • In 2014, Facebook acquired Oculus VR for $US 2 billion
  • Facebook is now joined by Samsung, Google, HTC, Microsoft, Apple and Sony who have invested in developing VR technologies
  • 2025 is the year that AR and VR are both estimated to be indispensable in the business world
  • The mobile application, Pokémon Go added $7.5 billion to Nintendo’s market value. It delivered $600 million in mobile AR revenue in the first three months alone
  • The new iPhone 8 is AR compatible, granting access to the mass consumer market
  • Uptake of VR in business is forecasted to exceed leisure usage in a few years
  • 67% of businesses are considering using AR in the future, while 47% are considering using VR
  • Investments in AR/VR rose 300% in 2016

Challenges and Threats

With the development of any new software and technology, there will inevitably be a number of challenges and threats that companies must overcome in order to promote the success of their product. Most of the challenges are centred on developing a product design that is suitable for consumption by the mass market.

  • AR hardware
  • There are currently no AR headsets available for sale to consumers, but rather it can only be accessed through our mobile devices. While this may be beneficial in the sense that anyone with a smartphone can access the technology, it also poses the issue that the AR experience may be duller. Prototypes developed for consumers currently come in at quite a high price, which makes them rather inaccessible for the everyday customer. Issues that need to be considered:
  • Lasting battery life
  • Mobile connectivity
  • Affordability
  • Content and apps
  • This would be comparable to creating an iPhone with no apps – currently the hardware for AR is there, but there are few applications and programs that are designed to enhance user experience.
  • Companies are hiring developers to build apps and create 3D product models to be used for AR, but the industry is experiencing slow growth in content, applications and uses that appeal to a mass audience.
  • Consumers can’t justify paying over $1,000 for AR/VR hardware that only has a limited number of uses currently, however this can be overcome as costs are gradually lowered and more content is created.
  • Education
  • Consumers need to be aware of how AR can be utilised in their everyday lives, which might include exposing students to AR from early on.
  • Businesses and the public need to experience the potential of what these technologies can do, as it’s quite difficult to perceive just how revolutionary they are without first-hand experience.
  • There is currently also a large gap in the supply and demand of talent in creating these technologies. However, research in the US shows that demand for freelancers with VR expertise grew faster than any other skill, thus highlighting the necessity for talent.
  • Impact on well-being
  • AR can cause significant disruptions to safety, privacy, finance or operations if breached, as it lacks a uniform or standardised security standard.
  • For example, a hacker can manipulate a navigation system to display to the driver a false computer-generated speed limit or incorrect road route.
  • Users may unknowingly find themselves in dangerous or hazardous situations while engaging in AR. For example, there have been a few deaths and numerous injuries as a result of playing Pokémon Go.
  • There have been no studies about the long-term effects of using VR, particularly the impact or strain it could cause eyes. However,this is something to keep in mind, particularly if prolonged usage increases.
  • Increased screen time is also known to negatively affect the way individuals interact and perceive social situations. VR/AR can potentially lead to minor addiction, whereby users become so immersed and infatuated by virtual worlds, that real life may simply not suffice.

New Job Opportunitites

  • App creation
  • As previously mentioned, the need for content and apps for both VR and AR is vital to the success of these modern technologies. This presents numerous opportunities for developers and innovators alike, to work together and create apps that reinvent everyday tasks through AR and VR.
  • Marketing
  • New roles in marketing, targeting the use of AR and VR in engaging customers will be vital. It creates more opportunities for personalisation, tailoring the marketing strategy to the individual and creating hype around the product or service.

Business Applications

  • Training employees
  • Time and money can be saved when training employees can be done virtually through VR. This might even have a greater impact, as they can experience different scenarios and environments first hand, which are alike to on the job training. As a result, they can acquire more skills, and at a quicker pace. E.g. flight simulations for pilot training
  • VR can also be used to determine if a potential candidate for a role fits the ‘cultural fit’ of a workplace, by virtually experiencing a few hours of work in the unfamiliar environment.
  • Remote work
  • Geographical locations for jobs won’t be relevant anymore in a world of VR. It would allow employees to virtually work in the same space as their colleagues from home, with simulations of the office.
  • This would also reduce the frequency of travelling for business, as workers can convene in a virtual meeting room.
  • Prototypes
  • AR provides unprecedented insight into a product at the very early stages of design. It would be much cheaper, and enable designers to enhance product design by testing feedback and making changes a lot faster. Each stage of prototype development would be boosted, simplified and supported.
  • Virtual prototyping will also reduce quantity of physical, and hence costly, prototypes needed.
  • Try before you buy
  • Consumers can try on clothes and makeup virtually, allowing them to make more informed purchases
  • Engagement with customers (as both marketing and customer service tools)
  • When interacting in a digital world, a huge amount of data becomes available about how customers act and their preferences – which can readily be displayed in future interactions.
  • Product information can be displayed using AR, to better inform customers about what they are buying.

Impact on specific industries

  • Automotive industry
  • VR applications can be used for prototyping to enhance design, safety and pricing. Customers are also able to try out distinctive features and test drive the vehicles.
  • Healthcare
  • There are numerous AR and VR applications as discussed above, ranging from patient care and treatment, to medical student practice. VR can also be used to view surgeries, and construct 3D models of patients’ anatomy in detail, to increase the safety of operations.
  • Tourism
  • The hospitality and travel industry will face enormous disruption when VR revolutionises the way people experience and immerse themselves in another country. It will also impact the ability of customers to experience and try hotel rooms, locations, and activities before committing to purchase.
  • Architecture
  • Architects use AR to correctly visualise buildings, layouts and blueprints using computer-generated images. It also gives them the freedom to experiment with lighting, materials and floor planswithout incurring additional costs.
  • Retail
  • There are numerous applications for retail businesses, spanning from apparel to homewares. AR will allow consumers to virtually ‘try on clothes’ or view how a piece of furniture will be placed in a home or office, thereby creating greater convenience for shoppers and reducing the number of returns or exchanges for businesses.
  • Ikea has developed an app which allows users to digitally place to scale 3D furniture inside your home, to determine if it fits or the colour scheme matches other items.
  • Entertainment
  • This will probably be the first industry to be disrupted, as the applications are extensive. A whole new gaming experience can be offered with VR – where users can feel completely immersed in the game scenario, for a more life-like and confronting experience. Imagine being able to watch a sports match using VR and feel as though you are sitting right there in the stadium!

Implications for Boards

Our intent in producing these papers is to help educate the boards in Australia on some of the significant technological changes that are changing the world.

This paper has focused on AR/VR which has a range of impacts on various industries as we have described above.
We hope this is of interest and value to you.


Gabbie Anastasi
Gabbie Anastasi
John Colvin, Gabbie Anastasi

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