If investments are anything to go by, virtual reality is a rising reality. According to a report by market analyst firm PitchBook, nearly $4 billion has been invested in startups working on VR since 2010. Venture capitalists have been joined by corporations, and corporate VC arms, hedge funds and private equity investors for 353 completed deals.
The writers explain that advancements in technology that form the basis of smartphones have been repurposed to develop VR products.
In 2014 $2.8 billion was invested in VR, which includes the $2 billion Facebook paid for Oculus. So far in 2015, around $632 million have been invested across 120 deals. The report highlights $542 raised by Magic Leap, $65 million raised by VR camera maker Jaunt and $35 million raised by NextVR.
Growing interest around VR is illustrated by the increasing number of investors in the field. The 229 investors in 2015 include 170 who are new to VR transactions. In 2014, the report says, there were 156 new investors.
A wide range of investors have poured money into VR. The top investors are still VCs, but corporations are also getting involved, making up around 10% of all new investors, according to the report. Private equity firms have also started to invest in VR deals.
One of the reasons why VR is set to become widely adopted is its wide range of applications. Gamers will be the early adopters of VR, especially those who already have high-end computer setups or PlayStation4s. But VR is not only for gaming. It is also finding applications in digital entertainment, education, healthcare, enterprise and the military. The report points out that VR has been used by the medical profession for years, amongst others to create risk-free environments to practice surgery. The military has also used VR in the treatment of PTSD.
Since VR experiences targeting the gaming market may possibly be too expensive for the mass market, widespread adoption will depend on pre-rendered content for traditional forms of entertainment like film, music videos and concerts. VR will gain a loyal following from sport and music fans who would be keen on a virtual front row seat at their favorite events.
According to the writers costs will continue to hold back the mass adoption of VR in 2016. Mobile and untethered VR, being more affordable, will drive VR adoption once VR headsets come on the market.