Virtual Reality – Great Potential, But Don’t be Hasty

Without any actual product released, the virtual reality company Magic Leap has raised funding of nearly $800 million in their series C round, at $4.5 billion post-money valuation, which might be a new record in the hirtory of the internet. It is not a unique case: for several years, virtual reality companies have become rising stars that every investor wants to fund and gain profit from later.

VR’s history is maybe longer than you thought. As early as in the 1990s, VR companies made their first attempts by launching gaming machines in arcades. They all failed, mostly due to the unacceptably high unit price (around £25000) and the fact that they were not that competitive. 

In 1995, Nintendo launched Virtual Boy, which only contained 19 games and wasn’t able to compete with other gaming devices on the market.

In the 2000s, the manufacturing industry began using this technology. With a laboratory providing an “Immersive Virtual Environment”, Ford was able to test the security system and have an almost real user experience of their car with a lower budget.

2012 was a turning point, when Oculus initiated a program of crowd funding on Kickstarter, and received $2.4 million, which exceeded by far their original goal of $250,000. VR has finally drawn the attention of the public. In 2014, Facebook acquired Oculus with $2 billion. Since then, almost all tech giants, including Microsoft, Sony and HTC, have entered this battlefield.

A bright future

What can we do with virtual reality? Imagine that one day, you wake up and make yourself a coffee. You touch your mug. You feel the heat of it. The coffee tastes bitter. It all seems so real – while you, wearing a headset, are still lying on your bed. You will still need essential energy for your body though, but you can just take an infusion of nutrient liquid, and the VR device will send electronic signals to your brain and tell it what your “food” tastes like.

It is the ultimate and the wildest imagination of how we can use this kind of technology. But let’s set our vision on the short term for now. With VR, you can do more things without going outside: working (with virtual documents around you), studying, shopping (you can see directly what you look like when putting those clothes on). You can also use it to help people go outside while they cannot. Like a sick kid who, with a VR device, can finally see the world he has never seen.

When talking about VR’s practical value, we are often given a spectacular blueprint. We will be able to use it on so many sectors that it seems that in the future, we won’t need many material support in our life. All we will need is a VR device and an advanced logistic system which allows us to get what we want quickly.

Living in the Matrix

Is VR a huge opportunity or is it just another bubble? For now, it is hard to tell. Apparently, to have a decent user experience, there’s still a lot to be done. Users are complaining about how heavy those devices are on their head and how their view is blocked, and they can easily stumble over anything in the room. Most devices can only track the action of the head, not any other part of your body. Companies have made promises about solving these problems, but none of them seems easy to deal with.

On the other hand, investments in VR programs are massively increasing. As a 6-year-old company, the only thing we see Magic Leap has done is to release a series of fancy videos on the internet, including an “elephant” that you can hold in your hand, and a “whale” jumping out of water – in a gym.

The visual effect is impressing, indeed. But we wonder when this technology will be mature and be more useful to our life.  

There are other concerns about the future of VR. If things really go as we have imagined – lying on the bed (or in a giant “pill” with lots of tubes, as many science-fiction movies had pictured), letting an electronic device control your five senses and your feeling. You won’t need to go outside anymore, nor to live in the downtown for any living facilities. It seems that there’s no reason for a big city to exist anymore at that time.

This may just be an imagination which will never happen. But the technologies involved are not unreachable. If we want VR to develop, why shouldn’t we consider the worst situation it could cause in the future? This is not to say that we need to stop funding VR programs; on the contrary, we should be able to see the great potential in it. However, maybe it is wise to invest more carefully,  knowing that runaway valuation is actually a pretty effective way to destroy the sector. 

Yuan. S