We’ve been hearing for 10-15 years that extended reality or spatial computing is the next big computing platform. Why is now different?
With the release of the Vision Pro last month, Apple has once again shifted the tech media’s attention back to extended reality (XR) and the promise of what Apple calls ‘spatial computing’.
Apple is going head-to-head with the industry leader Meta and its Quest devices and positioning itself more akin to the Magic Leap, another serious player targeting the professional market.
Anyone who’s been in this space for a while is happy to see Apple enter the market and bring focus to the potential beyond gaming. Additionally, on the consumer side, we can expect to see augmented reality (AR) glasses come back with Meta’s Raybans and Snap Inc.’s new Spectacles.
This article provides our perspective on the hype and the reality of XR.
THE HYPE
With the sophistication and capabilities of these devices, it's no wonder we keep hearing this is the next big computing platform.
There are those that have drank the koolaid and believe absolutely that XR technology is a game changer. Likewise, there are those that ridicule the idea of wearing a computer on your head all day, especially the dorks walking around in the real world with their headsets on.
Will XR technology solve the world's problems? Or will it destroy society.
Will digital worlds allow us to communicate more deeply? Or will they isolate us further.
Is the metaverse dead? Or is it just beginning.
What's the reality?
THE REALITY
The reality is we HAVE been hearing for the last 10 years that XR is the next big computing platform. It hasn't happened.
Why?
In terms of enterprise adoption, we believe it's largely because content creation has been complex and expensive, and because the devices are so new. Scaling the training and support are also barriers.
Large industrial manufacturing companies in aerospace, aviation and automotive were early adopters of computer simulations, so it’s no surprise that they are adopting XR for training and remote operations support on a larger scale. And armies love it.
However, for most companies XR is not on the immediate horizon. What we're seeing and hearing about is a lot of interest, and senior level buy-in and budget for proofs of concept, but not a lot of large-scale roll-outs apart from industrial manufacturing.
Let's talk about the metaverse for minute.
With what you saw in the media the last few years, it's easy to think the 'metaverse' is a fad created by Meta, wasting billions of dollars. The reality is, the metaverse is better described as virtual worlds or computer-simulated environments. There are many metaverses. Meta's Horizon Worlds is one.
Here's what we think the reality is around Meta's investment in the metaverse.
To the media pundits that claim Horizon Worlds is a failed experiment, well, we know Mark Zuckerberg is an easy target but you are missing the longer term play.
It's easy to say wow $10 billion that's crazy. But Facebook bought Oculus in 2014 for $2 billion and that seemed nuts. Now it's making a billion a year in the Oculus store and billions more on the devices. How much is a successful virtual world worth these days? Roblox is valued at $25 billion at the beginning of 2024.
Meta has the biggest market share in terms of headsets with the Quest. It's logical that they would invest heavily to create a virtual world presence - Horizon Worlds - that can be monetized in future. Meta's investment - like all major players - is also in patents in the XR space.
Is Horizon Worlds dead? It will continue to evolve but it's not dead yet.
Is the metaverse dead? No, but it's the wild west.
OUR TAKE
It feels like 2007 when the iPhone first came out and it was really cool but there wasn't a ton of apps. All the marketers wanted to create an app, the tech team was worried about platform security and business teams were saying, nobody wants to read a document on a mobile.
There were a TON of technical advancements happening before the iPhone came out, but it was a tipping point. Will the Vision Pro be a tipping point to take the XR industry beyond gaming and entertainment?
We think the Vision Pro will be the next gadget that Apple fans will line up for, but the combination of artificial intelligence (AI) and XR is what will finally be the tipping point because we now have AI as a collaborator in content creation.
SUMMARY
We’ve been working in XR for 7 years and, while we love being able to explore the potential through the research work we are doing, until now, we’ve been on the fence as to how our enterprise clients can really benefit apart from niche training applications.
While we still think it’s early days for enterprise, it’s not too early to start exploring this space. It’s in these early explorations where innovative teams can learn a lot, both about the potential for good and potential for harms.
Why now?
Covid fundamentally changed our collective reality and we experienced a future where we could use technology to work and learn remotely. Using XR for emergency response and 'in the field' information sharing doesn't seem so farfetched.
If creating content was a barrier to entry for many organizations, now we have AI that can help to generate content. And this will be the game changer.
We have to remember that for a younger generation, they are already learning and playing with others in digital worlds. They are already using Snapchat filters and mobile AR games and retail ecommerce.
The AI genie is out of the bottle, and we have the ability to access information differently. XR will become a different interface. And the hardware keeps getting better and cheaper too.
Humans seem to have an insatiable curiosity to explore immersive experiences - and new devices are coming to the market that will pique people’s interest and expose them to a world where digital and physical start to merge even more.
