Universal studios, Singapore - November, 30 2016: Photo of a smartphone showing a Pokemon being caught in front of Universal globe at Universal studios
The Virtual Reality industry saw unprecedented growth during the course of 2016, with the number of companies engaged in the sector growing by 40 percent.
The largest area of growth was in content companies that create apps for head-mounted VR displays, according to Marco DeMiroz, cofounder of The Venture Reality Fund, despite the relatively slow growth in consumer interest surrounding headsets.
The size of the gaming and entertainment VR industry nearly doubled in size in 2016, with education, enterprise, healthcare and journalism hot on their heels. Companies in the advertising and analytics sectors also attracted an impressive level of investment.
What started as a relatively high-tech, niche industry has recently started to go mainstream, with companies such as Windows and Google engaging virtual reality products that can be mass-produced. Looking forward, DeMoriz of the Venture Reality fund said that “the dream of an all-in-one mobile headset with positional tracking and full gesture control is expected to happen within the coming years”.
However, both the virtual reality and augmented reality sectors have seen slower growth than initially expected, with teething problems in products and unattainable prices making it harder for companies to enter the mainstream market.
In 2016, VR and AR were expected to deliver $4.4 billion revenue, but VR managed only $2.7 billion. The most successful entrant to the market so far has been Pokemon Go, which supported parent company Nintendo’s profits in 2016.