“And now it’s virtual insanity, Forget your virtual reality”
Jamiroquai, “Virtual Insanity“

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VR VC panel (left to right): Marco DeMiroz, Alice Lloyd George, Phil Sanderson, and moderator Sunny Dhillion. Image Credit: Dean Takahashi

Last month, I participated in a GamesBeat panel in Los Angeles to discuss virtual reality (VR) and augmented reality (AR) in gaming. My fellow panelists, Marco DeMiroz of The VR Fund and Alice Lloyd George of RRE Ventures, and I discussed the surging popularity of VR/AR among gaming companies and whether or not the hype stands up to the reality from an investor’s standpoint.

Check out the video below to watch the panel session.

The panel focused chiefly on the monetization expectations of VR and AR, specifically the factors that accelerate or impede the revenue opportunity of these technologies.

All three panelists agreed that there are expansive possibilities in AR/VR, especially considering the growth in $5-6 experience devices in China and the fact that half of developers have started building VR in the past year. However, while Marcos and Alice are actively building their portfolios around VR/AR’s imminent profitability, I’m a bit more conservative. As I explained during the panel session, there are a few key reasons why I think we’re still five to three to five years away from fully monetizing on AR/VR in gaming:

  • We’ve seen plenty of funding in the AR/VR space but no real revenue yet.
  • The big AR/VR companies––Microsoft, Samsung, Oculus (Facebook)––appear to be putting most of their efforts in building an ecosystem rather than consumer marketing.
  • Even companies investing in AR/VR aren’t building pure play experiences– they’re combining it with gaming so that they’re in a position to take advantage of the tech when it does explode without investing too heavily now.
  • Headsets and peripheral equipment have a long way to go before they reach mass market adoption; AR/VR devices are currently too expensive, run too hot, look awkward and, most notably, cause dizziness.
  • The experience is exciting and novel, but that alone won’t be enough to give it mass appeal, just to get it seeded.

Catch all the details in the panel video, and stay tuned for more of my contrarian thoughts on AR/VR gaming in the near future!