Why Oculus Rift Matters - shelisrael.com

Shel Israel inContext

Why Oculus Rift Matters

Rift

Among the most discussed product launches at CES was Oculus Rift, the first consumer product from the company Facebook acquired for $2 billion. It immediately drew great excitement and simultaneous criticism. Much of the criticism centered around the significant hardware investment that this new virtual reality [VR] headset will require to achieve the rapid adoption that some predict.

On one side was the fact that nearly everyone who reported trying on the headset was blown away by the experience. They spent much of their conversational time at CES extolling such adjectives as “awesome” wherever they posted. They gushed not only about the experience, but also the quality of the headsets. On the other hand was what was required behind the curtain in the form of high performance hardware. Rift is going to require an unprecedented quantity of computing power, more than most people–even gamers have in their homes, more than–I read–Apple has in its current high-end computers, more than some chip makers such as AMD can even provide today and more than most people seem willing to spend on a home console or computer. Extreme Computing magazine called these requirements “a doozy.”

The nay-sayers looked at these facts and saw a gap of 5-to-7 years before mainstream adoption would occur. Some saw it as evidence of Apple’s demise.

I completely and fundamentally disagree. I see everyday people rapidly adopting VR with great speed so that it will be mainstream in the next 2-to-3 years and it will be supported by off-the-shelf hardware costing far less than $1500. In its first shipment, Rift is designed to work with Xbox, a product of choice for most of the world’s most avid gamers. As for Apple, I have little doubt that they will have an elegant product when there is sufficient market opportunity in the near-term future.

I believe that TrendForce is being just a little conservative in forecasting that VR will be a $70 billion market in just four years.

It seems to me the VR will follow the same patterns that other world-changing technology has followed ever since Moore’s Law was written 50 years ago. The Law actually talks about the density of transistor in an integrated circuit, but the important point is that for the past 50 years, all things running on microprocessors have doubled everyMoore two years and the price has either remained the same or gone down.

Moore’s Law is generally accepted as a law of science. There are also laws of the marketplace that seem to continuously hold true.

One is that when there is lots of competition, the price goes down and there is a great deal of competition coming from significant and powerful brands. There is also a ton of cool stuff coming from newer companies that you have never heard of, all of them will compete fiercely to bring increasingly cool stuff to more and more people in the categories of games, toys and entertainment. They will be driven to lower prices to beat their rivals.

This will happen on all levels of the supply chain. There are at least five chip makers: NVIDIA, Qualcomm, Intel, Samsung and AMD who are likely to fight for market share in this huge and future-shaping arena. Some will go for the high-end and focus on innovation. Other, most likely AMD will clone what they legally can and try to be the low price alternative.

The marketplace competition will be fierce and is already showing the flood about to burst through the dam. Low-priced Chinese knock-offs to Oculus Rift are already in the works. These will be a lot cheaper and perform in vastly inferior ways, with headsets that look like Rift but in no way feel like Rift. But they will find an immediate market in people with lower budgets and passions for quality and performance.

VR in the gamer market as we enter 2016 is configured into a perfect storm for early and accelerating adoption.

That’s just games. VR will start with gamers, where so much advanced technology–particularly in graphics and visual effects have historically begun before spilling over Cardboardinto myriad other categories. VR has already begun a great deal of spilling over. VR is a foundation pillar into something new and different and extremely significant that some are calling the Visual Internet, and analyst predict will eventually be 100 times larger than today’s internet.

Let’s look at some of that spillover:

  • The NY Times is partnering with Google who makes Cardboard, an extremely inexpensive VR viewer. The Times shipped one million Cardboards to selected subscribers for them to view fast-breaking visually immersive news. When terror struck in Paris last year, selected Times viewers could use cardboard to experience what it was like to be on the streets of the city. This may change the way people experience the news when delivered from professional sources as opposed to social media posts. Of course social media platforms will find ways to compete as the Visual Internet emerges.
  • VR is being used to train surgeons, predict Alzheimer’s and treat autism and chronic stress.
  • Eni, a global energy enterprise uses VR to train workers how to deal with an oil rig fire as well as other field-related issues.

VR is just one of several technologies that are coming at the marketplace with great speed and disruptive potential. There’s also Augmented Reality [AR], VR’s first cousin where people see what is really around, them through headsets, but there is an added layer, where people see things that are not actually there. Thus, two chess players could play a game while thousands of miles apart playing with gestures and voice, moving pieces that do not actually exist. In Russia, motorists trying to illegally park in a handicapped spaced get warned off by an angry person in a wheelchair who declares the space is reserved for him.

Then there are robots and natural language devices in homes that manage your lights, TV and ordering goods that need replacing while providing news and information and starting your car for you while you eat breakfast.

The Chinese are fond of saying that we live in interesting times.

I think Oculus Rift and VR as well as all this other cool stuff make these times extremely interesting and very world-changing.

One Response

  • Jan 11, 2016

    While I believe you are right that VR will become a very viable product, I’m in the camp of those that it will be almost a decade before we see that success. Teaming with the Xbox development will be a significant drag as that platform remains far behind Playstation and just in front of Steam, according to the latest IGN numbers. I think that was a decision mostly based on the amount of money Microsoft paid for the rights and not on reaching the greatest distribution.
    We shouldn’t discount the data processing issue either. Even the founders of Oculus say we are at least a decade out of the buildout needed to manage the flow of data, and we need a completely new chip architecture to process that data. There are designs available that can do it, even without additional data centers, but there is no courage int he investment community to support manufacturing those chips.

    Lou Covey Jan 11, 2016
    Reply

Leave a Reply

Your email address will not be published.