The term “metaverse” has become a thing again because Mark Zuckerberg has decided to wholeheartedly embrace the idea of a 3D, interactive world where users can work, play and be entertained, even changing Facebook’s holding company name to Meta. 

So while the social media mavens continue to tout how the cool kids will use whatever Silicon Valley can throw at them to interact with content, create creepy little avatars of themselves while they talk to and text their friends’ equally creepy-looking avatars and play games and whatnot using advanced augmented reality (AR) and virtual reality (VR) technology, just remember that this is really nothing new. 

It’s being touted as a revolution but for me, a person definitely way outside the target audience for these products, we’ve been down this road before. Interacting with content is nothing new for media watchers — we’ve been talking about it ever since Time Warner Cable launched the Full Service Network back in the 1990s. And with streaming and ultra high-speed broadband outpacing more traditional forms of entertainment consumption, media types have long prepared for this inevitable evolution.  

But the media business has never met a buzzword that it couldn’t beat to death and for the moment, “metaverse” appears to fit that bill. According to Bernstein Research, “metaverse” mentions on public company conference calls rose from just one in Q2 2020 to 449 in 3Q 2021.

Even actor Keanu Reeves, an owner of bitcoin and enthusiastic embracer of technology — he’s Neo, for gosh sakes — has asked for the metaverse hype to be turned down a notch, telling The Verge during the press tour for the upcoming Matrix: Resurrections movie that the term is decades old. 

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“Can we just not have metaverse be like invented by Facebook?” Reeves told The Verge. “The concept of the metaverse is like, way older. It’s like, c’mon man.”  

Bernstein Research hosted a conference call with its clients about the metaverse on Dec. 10 (a transcript was provided on Dec. 16) and for software developers and hardware manufacturers it appears that momentum is going their way.

According to Bernstein, the metaverse could represent a $2 trillion annual revenue opportunity, but there is a big question regarding timing: nobody knows exactly when that opportunity will come. Still, that revenue is expected to come from multiple sources — advertising, gaming, software, mobile apps and more — and some is even being spent to some extent today.  

“Companies are already spending to build it [the metaverse] and that costs real capital dollars,” Bernstein Internet analyst Mark Schmulik said on the call. “As they build it, we're already starting to see certain companies like Meta gain traction in hardware sales and related software sales. While it's still too early to draw a line of whether that's going to be successful or not, it's certainly underway.” 

That includes cable and telecom companies, which see the metaverse as another catalyst to drive the need for higher speeds. On the Dec. 10 Bernstein call, cable and telecom analyst Peter Supino noted that he expects 80 million U.S. homes to have at least one way to purchase Gigabit symmetrical service by 2025. 

And while wireless has been capacity constrained in the past, Supino noted that about 500 megahertz of mid-band spectrum has been reallocated by the Big Three carriers (AT&T, Verizon and T-Mobile) to 5G. 

The metaverse also is important to the cloud services business, because connecting as many machines as possible is a big priority. And that need for connectivity could be a potential boon for Dish Network, which has about 100 MHz of fallow wireless spectrum and partnership possibilities with Amazon Web Services, Azure or Google Cloud. 

“Dish is an unencumbered, high capacity link between the industrial metaverse and the cloud service providers that would like to serve and foster it,” Supino said.

But on the media and entertainment side, the benefits of the metaverse aren’t so clear.

Bernstein media analyst Todd Juenger admitted he was a “card-carrying” cynic when it comes to the Metaverse, adding that with all the hype surrounding the industry’s latest buzzword, he’s feeling more than a little déjà vu.  

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“The reason I'm cynical is that I feel like I've seen this before in media and entertainment,” Juenger said according to the transcript. “To me, the metaverse just sounds like a new word to describe an evolution that's naturally happening anyway.”

He then went on to offer an example. Remember 3D? Not too long ago, in the wake of James Cameron’s Avatar, the most successful 3D movie ever made, all content was supposed to be 3D, movies, television, networks began springing up all over the place. In 2010, ESPN was set to launch a 3D channel, Discovery was teaming up with Sony and IMAX to launch a 24-hour linear 3D network with movies, documentaries and children's programming and electronics vendors were scrambling to introduce 3D TVs to satiate what they expected to be tremendous demand. 

I don’t have to tell you what happened, but I’ll let Juenger tell you why it did anyway. 

“A couple years go by and where is 3D, right?,” Juenger said. “It was just [that] consumers didn't like it. They didn't benefit from it. It was almost being forced upon them.”

Sound familiar?

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Juenger went on to talk about AR, which was all the rage a few years ago, fueled by Pokémon Go, the mobile game that had young and old alike wandering into traffic to capture little AR anime figures. That was supposed to take the video game business by storm and again, it didn’t. Juenger recalled that while Pokémon Go was a massive success and its still going relatively strong, it remains the go-to example of AR’s supposed takeover of the video game business a half decade after its introduction. 

“It's funny that when we talk about AR when it relates to media, we still have to use Pokémon Go as the example, right?” Juenger said, noting that in the entertainment business, everybody copies everybody else, but so far that hasn’t happened with AR. 

“If AR is a big idea, where are the other AR video games?” Juenger said. “Why do we still have to point to Pokémon Go?”

Juenger wasn’t denying the opportunity that a new and improved metaverse presents. He just believes that the concern as to whether media and entertainment companies will take advantage of it is a bit misplaced.They already seem to be doing it. 

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“When it comes to entertainment, I will say the content creation will follow the technology platforms.” Juenger said. “I don't deny that there will be a big advancement in devices people use and [are] using social elements of entertainment, which incorporates elements of what we call the metaverse.”

Juenger, who also follows the video game industry, said that Roblox, the online platform that allows people to play games created by other users, already bills itself as a metaverse. The difference between Roblox games and more traditional games like Grand Theft Auto, he said, is that a user can move his Roblox avatar through different games. 

“I'm not sure you even want to take your GTA persona and move it into a different game, so maybe those will just stay separate,” Juenger said. “In terms of VR and AR games — in VR games, every major publisher makes some — but they all tell you that they just earn the minimum. And the only reason they do it is not really to make money, it's really just to stay involved and to build capabilities in case this takes off.” 

Even Disney has jumped on the metaverse bandwagon, envisioning a merger of the physical and virtual worlds in its theme park experiences, which Juenger said, although a  bit cringe-worthy, probably makes sense. 

“To me, that just sounds like an idea of a Disney video game,” Juenger said, adding that the prevailing wisdom that only huge conglomerates can afford to take advantage of metaverse opportunities may not hold true. 

Sure, the mega-media giants like Disney have all the money, technology and resources and have managed to build huge communities with their brands, but their size can make them slow to react to changes in the business. With development getting easier and faster and distribution barriers being shattered across the landscape, Juenger said some believe it is time to consider smaller, faster, more advanced startups to displace some of their older, larger competitors.    

“This is all still new enough and video games are inherently innovative,” Juenger said. “I would bet on the big IPs. But I think it's an evolution, not a revolution. Video game manufacturers — they've gone through a lot of change already. I think this is just another one.” 

Other analysts have delved into the metaverse conversation, with Evercore ISI Internet analyst Mark Mahaney issuing a 33-page report on December 10 that highlighted the pros and cons of the technology. Pros: there is a lot of money to be made. Cons: It’s going to take a big change in consumer behavior to realize that revenue.

On the plus side, Mahaney said Meta (the former Facebook) is putting its money where its vision is, investing more than $10 billion annually in the concept, has about 3.5 billion monthly users in its family of apps that are already engaging in what is most likely the core use of the metaverse (social media); and has the majority of the VR device business through Oculus Quest. And the pandemic has shown that consumers are willing to interact more online -- Zoom went from 10 million data meeting participants in 2019 to 300 million by April 2020. Roblox has more than 47 million DAUs that average 2.6 hours per day on the platform in Q3 2021, and while VR adoption is still nascent -- about 2% of monthly users on Steam -- it is rising.

But there’s a downside too. According to Mahaney’s report, the biggest question is whether enough consumers will swap “real” reality for virtual reality or whether VR will just be another niche product. And then there is the technology part of the metaverse. Zuckerberg has said that the biggest challenge for the industry is cramming a super-computer into the frame of normal-looking eyeglasses. 

“Ultimately, we need high-fidelity graphics, low latency, with hundreds of millions of concurrent users in real-time at a relatively cheap price point,” Mahaney wrote.

That, to me, is going to be the real deciding factor in this. People have different expectations as to how the metaverse will look and feel and I will bet you that none of them has a basis in the current reality.

The technology industry is really good at driving interest and excitement about technology, but it takes time for these things to deliver what’s being promised. And now they are talking about a technology that in order to work as promised is literally going to have billions of users accessing servers and whatnot simultaneously. Just think of how annoyed you get when Netflix takes too much time to load a movie and multiply that by 1,000 or so when your virtual jaunt through the rainforest crashes into a sea of pixels. 

And then there are the social and privacy aspects. It’s probably a safe bet that to keep the cost of these products and services down, people are going to have to give up a load of personal data. Sure many are doing that already, but you’ve got to wonder how much more everyone is going to have to surrender to make a low-cost metaverse worthwhile. 

And as far as the social impact, while most people have spent a year in isolation, when they get a chance to go out and interact with actual people, they do it in droves. The news is full of stories of people, young and old, that risked going to large gatherings during the outbreak. Heck, just yesterday (December 16), AMC Theaters said that 1.1 million people went outside to an actual movie theater to watch Spiderman: No Way Home, the second largest box office day in AMC’s history  (The Avengers: Endgame was No. 1). 

So I guess what I’m saying is that for the metaverse to really be worth the hype, it has to deliver on its promises. If it doesn’t, it risks turning consumers off of the concept, or at least substantially delaying its acceptance until it resurfaces years later with another name -- my vote is for  Vitametamegaverse (“It’s So Tasty Too!”). And that’s another thing that this industry has seen before.  ■ 

For Hyundai, The Walt Disney Co.’s National Geographic Channel has created a co-branded augmented reality series that will let viewers experience and explore some of America’s iconic national parks.

Outside Academy--launching during National Park Week--promotes electric, plug-in hybrid and hybrid vehicles from Hyundai as eco-friendly and perfect for an outdoor adventure.

Created by Disney Advertising Sales’ National Geographic CreativeWorks unit with Hyundai, Outside Academy covers three parks, Zion, Yosemite and Great Smoky Mountains. Each edition was produced two ways. For Instagram, users can explore the parks virtually from their living rooms. On mobile devices, the experience is drivable and location enabled, informing users about the park they are visiting.

“Combining technology with creativity, we’re bringing audiences immersive ways to explore some of the most awe-inspiring national parks – whether they’re at home or visiting the locations in person – and seamlessly integrating Hyundai’s vehicles into the experience” said Andrew Messina, senior VP, Disney Advertising Sales. “We’re proud to deepen our relationship with Hyundai and continue pushing the boundaries of advertising with this first-ever co-branded AR series and offering innovative solutions to engage consumers.”

A digital destination contains content about the national parks including 360-degree presentations with multiple clickable hotspots, as well as information about Hyundai vehicles.

Outside Academy will be promoted with a full-page ad in the May issue of National Geographic magazine.

“Education for millions of students was disrupted this past year, so we partnered with National Geographic to create AR science, geography, and history lessons from three of America’s most famous national parks,” said Angela Zepeda, CMO, Hyundai Motor America. “We are also naturally integrating three of our eco-friendly vehicles that are perfect for adventure – the Santa Fe HEV, Tucson PHEV and all-electric Ioniq 5.”

The first AR experience on Instagram featuring Zion National Park and Hyundai’s 2021 Santa Fe Hybrid launched April 25. The drivable AR experience will become available starting on Thursday, May 20.

Verizon Media and HBO are working together on an ad campaign that uses augmented reality to promote season two of the HBO show His Dark Materials.

The campaign is running in native ads in content on Verizon Media properties including Yahoo News and Yahoo Sports.

Verizon Media used its first-party data and real audience information to reach television fans at scale, driving tune in from viewers likely to connect with the show.

With the AR experience, viewers can see their daemon come to life. A Daemon is a physical manifestation of a person’s “inner self” that takes the form of an animal. The ads also give viewers the option to download HBO’s His Dark Materials AR app.

Verizon Media said that entertainment seekers are 4.8 times more likely to want to learn more about a brand when the advertising is high-quality and fun.

Comcast-NBCUniversal will host a "hack-a-thon" Nov. 3-4 at Telemundo's new Miami headquarters.

The hack-a-thon, the second in Miami, will provide a $10,000 grand prize for the most innovative cross-platform approach to developing "new ways to tell stories and foster deeper fan and community engagement with participating NBCUniversal brands."

The winner, who will be expected to leverage new tech including artificial intelligence (AI) and augmented reality (AR), will also get a chance to pitch their proposal to NBCU execs. In addition to the grand prize winner there will be first and second runner-ups.

Participants will have access to NBCU content and platforms during the two-day event.

Tech companies partnering on the effort include Amazon and Google.

Oxygen Media is stepping into the world of augmented reality (AR) via an app that enables users to step into a pseudo crime scene and attempt to solve a murder mystery.

The iOS app, Forensic Detective: Inside the Crime Scene, was built using Apple’s ARKit and will be available in June.

Building on its new focus on true crime programming, Oxygen said the AR app/game will enable users to turn any room into an immersive crime scene mystery where they can ferret out clues and evidence that can be used to piece together the solution.

RELATED: Oxygen to Rebrand as a True Crime Channel

Oxygen developed the app with Neo-Pangea. It features ARKit 1.5 and takes advantage of vertical plane detection, a feature that enables the game to identify walls in the room and place clues and evidence on those surfaces to establish a “full room-scale interactive environment.”

RELATED: Syfy Uses AR to Promote ‘Happy!’

Oxygen has posted a preview of the game and released a short promo video about the app.

“By taking advantage of the latest AR technology, we can push boundaries and give armchair detectives a unique opportunity to get out of their chairs and put their puzzle solving skills to the test using very real crime solving methods,” Lisa Hsia, EVP, digital, for Bravo and Oxygen Media, said in a statement.

“ARKit 1.5 gave us the ability to weave in vertical plane detection as part of the game’s narrative,” Matt Marsters, Mixed Reality Strategist at Neo-Pangea, added. “It’s a real differentiator, making the user experience exceptionally rich since the app can render full-scale 3D thanks to spatial recognition. It’s a bit like having an ‘Escape the Room’ experience right in your pocket.”

LiveLike, a startup that has developed a VR platform for live TV sporting events, has raised a $9.6 million B round that includes new investors Greycroft Partners and Lepe Partners.

New York-based LiveLike has raised about $15 million so far thanks to backing from other investors such as David Stern, commissioner emeritus of the NBA; Evolution Media; Courtside Ventures; Elysian Park; Dentsu Ventures; and the GC VR Gaming Tracker Fund.

The startup, which is also focusing on augmented reality (AR) and mixed reality (MR) applications, plans to use the fresh funds to help it expand its partnerships, and further build out its product and platform in a way that aims to simplify the experience and to make it more frictionless.

RELATED: Putting VR in a Sporting Mood (subscription required)

It will also work on making its system compatible with more platforms and develop new “in-product experiences” such as fantasy sports integrations and other social-facing elements.

The app, also accessible in 360-degree format on mobile devices, will present a “virtual suite” developed in partnership with LiveLike that will feature multiple camera angles of the match, as well as stats and pre-game VOD features.

RELATED: Fox Sports, LiveLike to Offer Virtual Suite for Super Bowl LI

The new investment also follows LiveLike’s early work with partners such as Fox Sports that center on the creation of interactive, 3D “virtual suites” that complement the 2D live TV feed while also providing multiple camera angles, stats and some VOD elements.

LiveLike and Fox Sports have teamed on such VR experiences around several sporting events, including last June’s UEFA Champions League final between Real Madrid and Juventus, Super Bowl LI, the 2016 and 2017 Big East Mean’s Basketball Tournaments, the 2016 U.S. Open Championship, the 2016 MLS Cup, the 2016 Bundesliga season opener, and the 2016 Big Ten Football Championship.

RELATED: Fox Sports to Offer UEFA Champions League Final in VR

LiveLike said it plans to announce more media and event partners as well as product enhancements in the coming months. 

“LiveLike has been successful because we have built a platform that connects with younger generations seeking a more non-traditional experience,” Andre Lorenceau, founder and CEO of LiveLike, said in a statement. “Thanks to our investors, we are now in a position to hire for key positions and continue delivering a premier next-generation sports OTT platform.”

Michael Davies, SVP field & technical operations at Fox Sports, added: “It has always been in Fox Sports’s DNA to explore different and imaginative ways to serve our fans. To that end, in our nearly two years of working with LiveLike, creating our Fox Sports VR app and working on sports like hockey, football, basketball and soccer, we have found them to be innovative, nimble, and attentive to this exciting and rapidly changing platform. We are looking forward to continuing to imagine the future with them.”

Magic Leap, the well-funded augmented reality/spacial computing startup, has formed a partnership with the NBA and Turner that, they promise, will usher in “the next generation of sports viewing and interactivity.”

Magic Leap’s first sports-focused partnership will center on the Magic Leap One, the startup’s augmented/mixed reality system, and a new NBA App that’s optimized for that platform to transform a flat, 2D experience into one that’s in 3D.

“This partnership will allow us to bring fans a completely new, intimate experience that has never been seen in sports,” Jeff Ruediger, managing director of Magic Leap Screens, explained in this blog post.

By way of example, NBA fans will be able to use that combo, in tandem with Magic Leap’s Screens system, to summon multiple, virtual screens into their field of view, he noted.

“When paired with Magic Leap’s Digital Lightfield technology [which enables digital objects to look lifelike when blended with the real world] and spatial computing, these screens can be shown at any size, and in any location combined with supplemental graphics that allow fans to enjoy their favorite stats, replays and commentary — all without missing the game action,” Ruediger said. “We’ve even used volumetric capture to bring a life-size Shaquille O’Neal presence right into your living room.”

The launch of the new app for Magic Leap’s platform will feature a curated list of archived NBA games and some highlights and clips of teams and players. The NBA, Turner and Magic Leap are also working to bring this experience to live games.

Magic Leap said the new NBA App for its platform is in development, but didn’t announce when it would become available.

The trio made the announcement at Recode’s Code Media conference in Huntington Beach, Calif. A video with O’Neal was also shown with the former NBA great and current analyst with Turner donning Magic Leap specs and explaining how he was able to watch multiple full-court games appear on either side of him in a mixed reality environment.

“It was the most amazing thing,” he said. “I think the NBA, once it gets a hold of this technology, and some of the players … they’re really going to want to integrate their material.”

O’Neal also talked up Magic Leap’s attempt to render him in the MR environment. “When I saw it, it made me feel like I had a twin brother.”

The partnership also comes almost two months after Magic Leap introduced a “Creator’s Edition” version of its platform.

That initial system is composed of Lightwear (the AR glasses/headset); the Lightpack (a device that works with the headset and powers the system’s spatial computing platform); and a controller with haptic feedback.

Sales of headsets and eyewear outfitted for augmented reality (AR) and virtual reality (VR) are poised for a record year, according to a new forecast from the Consumer Technology Association (CTA).

The CTA said it expects sales of AR and VR headsets and eyewear to reach a record 4.9 million units in the U.S. in 2018, a more than 25% increase from 2017. Those sales will produce about $1.2 billion in revenues, a 10% increase from 2016, CTA added.

Read More: Complete coverage of #CES2018

The organization noted that it expects sales of consumer-focused AR eyewear to “accelerate considerably” within the next five years.

RELATED: Magic Leap Intros ‘Creator’s Edition’ AR Platform

The CTA announced its VR/AR projections ahead of a U.S. Consumer Technology Sales and Forecasts report that will be released at CES, which is set to run Jan. 9-12 in Las Vegas.

RELATED: PlayStation VR’s Installed Base Crosses 2 Million Units

The CTA will also expand the space dedicated to AR and VR at next week’s show, noting that its Augmented Reality Marketplace will grow to a record 10,900 net square feet, making it 10% larger than that at the 2017 gadgetfest. Meanwhile, the show’s Gaming & Virtual Reality Marketplace, will expand to 34,100 net square feet, an 18% year-on-year increase.

The association also noted that its AR/VR Working Group, operating under its Technology & Standards Program, will “soon” wrap up work on technical definitions covering a “broad spectrum” for those industries, including MR, XR, outside-in tracking and Six Degrees of Freedom (6DoF).

Last year, that working group stamped the following definitions:

-Augmented Reality (AR) overlays digitally-created content into the user's real-world environment

-Mixed Reality (MR) is an experience that seamlessly blends the user's real-world environment and digitally-created content, where both environments can coexist and interact with each other

-Virtual Reality (VR) creates a digital environment that replaces the user's real-world environment

RELATED: Apple Snares Mixed Reality Headset Company 

Magic Leap, the well-heeled and super-secretive augmented reality startup, has finally shed some light on its early product plans.

The timing of a consumer product is still under wraps, but Magic Leap this week said a “Creator’s Edition” AR platform will start to ship in 2018. Magic Leap hasn’t released pricing details on that initial product, however, but did say the Creator Portal (which includes access to Magic Leap’s SDK)l for it will launch early next year

That initial system, called Magic Leap One and targeted to the development community, is comprised of three components:

-Lightwear: The AR glasses/headset, which combines the startups Digital Lightfield technology (which uses lightfield photonics to generate digital light that blends with natural light to make digital objects look “lifelike” when paired with the real world) with environment mapping, precision tracking and “soundfield audio,” which allows the user to hear sound from the direction it’s coming from.

-Lightpack: A device, working in tandem with the headset, that powers the Magic Leap’s spatial computing platform, baking in the high-powered processing and graphics.

-A controller with haptic feedback that, the company claims, supports “six degrees of freedom, movement feels smooth, intuitive and responds to your every gesture.”

Magic Leap, which has raised about $1.9 billion, is pushing forward as companies such as Facebook, Microsoft and Apple also gear up to make a mark in AR.

Among them, Apple recently acquired Vrvana, a maker of a “mixed reality” headset that’s expected to factor into Apple’s reported plans to launch an AR headset as early as 2020.

Apple has reportedly acquired AR headset company Vrvana amid recent chatter that the company intends to develop and launch an augmented reality headset as early as 2020.

RELATED: Apple Pushing Ahead With AR Headset: Report 

TechCrunch, citing multiple people familiar with the deal, said Apple is paying $30 million for Vrvana, the Montreal-based maker of the Totem-branded “extended reality” headset. TC says Vrvana, founded in 2005, had raised less than $2 million.

The Totem has not reached the commercial launch phase, but the prototype has generated some high marks. Last year, Tom’s Hardware was impressed by the Totem, billing it as a mixed reality device that offers the “best of virtual reality and augmented reality in one unit,” while noting that its 1440p display offers a higher-res experience than one would get with the Oculus Rift and HTC Vive. The reviewer also touted the product’s 120-degree field-of-view.

Apple is already building AR capabilities into its mobile devices and pushing into that arena with its ARkit  -- Syfy, for example, used it to develop an AR app promoting a new series called Happy!

RELATED: Syfy Uses AR to Promote ‘Happy!’

In addition to filling serious technology gap, Apple’s move into AR hardware would put it in more direct competition with Microsoft’s  HoloLens platform and what’s being developed by secretive startup MagicLeap.

Syfy is dipping its toe into the world of augmented reality to promote Happy!, a series that’s set to premiere Wednesday, Dec. 6.

Syfy’s AR app for Happy!, offered on iOS and Android devices, features the show’s title character, an imaginary blue-winged horse that is named – you guessed it – Happy.

RELATED: Apple Gears Up for VR, AR

Consumers can use the lens of the app to show Happy interacting with real-world surroundings, as he’s able to sit, fly, and answer questions. His bag of AR tricks includes digitally defecating on your carpet, according to Variety. 

Syfy said Happy! follows Nick Sax (played by Christopher Meloni), an “intoxicated, corrupt ex-cop turned hit man” whose life is forever changed by his new imaginary friend, Happy (voiced by Patton Oswalt).

Apple is ratcheting up development of a new augmented reality headset that could ship as early as 2020, and provide the company with a product that could “succeed” its iconic iPhone, Bloomberg reported.

Apple is already building AR capabilities into its mobile devices and pushing into that arena with its ARkit, but a headset would put it in more direct competition with work underway at companies such as Microsoft, with its “mixed reality” HoloLens platform, and MagicLeap, the well-funded AR startup. 

RELATED: Apple Gears Up for VR, AR

Apple’s AR product “will have its own display and run on a new chip and operating system,” Bloomberg said, citing people familiar with the situation.

Bloomberg said the new operating system Apple is developing is carrying the code-name “rOS” for “reality operating system,” and is based on the iPhone’s OS. At this stage of development, Apple is using HTC Vive headsets for testing purposes, the report noted.

Apple’s iOS 11 is optimized for AR, and there are already more than 1,000 apps with AR features available now, CEO Tim Cook noted on the company’s fiscal Q4 call last week.

“Put simply, we believe AR is going to change the way we use technology forever,” Cook said, citing examples such as virtual models, enhancing sporting events and educational applications. “AR is going to change everything.”

But Apple’s reported plans, and the anticipated timing of a product, is also being viewed with a skeptical eye because of the limitations of today’s AR technology.

Apple working on its own Magic Leap, but you won't see it anytime soon. https://t.co/OIw8EfnTK6

— Peter Kafka (@pkafka) November 8, 2017

Intel’s foray into VR headset hardware has hit the skids.

The chipmaker has scrapped plans to launch Project Alloy, an x86-based standalone “merged realty” headset hardware design that was introduced in 2016, according to Road to VR.

Unveiled at the company’s developer forum in 2016, Intel originally billed Project Alloy as an all-in-one solution that supported both virtual reality and augmented reality applications and leaned on Intel’s RealSense technology. It was expected to launch this year.

RELATED: Intel Gets Into VR Hardware Game

Despite scrapping plans to launch the Project Alloy reference design, the company “will continue to invest in the development of technologies to power next-generation AR/VR experiences,” Intel said in a statement to Road to VR. The ongoing investment will center on Movidius (for visual processing), RealSense, as well as other “enabling technologies” such as WiGig (for wireless VR with HTC), Thunderbolt (for high-speed data transfers) and Optane (advanced memory and storage), the company said.

“Project Alloy served as a great proof of concept for Intel and the industry – showing what’s possible in a high-performance, immersive and untethered VR experience. What we’ve learned through Project Alloy will inform future efforts,” Intel added. 

RELATED: Oculus Developing Standalone VR Headset

Though Intel is stepping away from Project Alloy, others in the VR sector, including Google and Facebook-owned Oculus, are moving ahead with plans to develop and launch standalone virtual reality headsets that don’t need to be tethered to a PC or gaming console or work in tandem with a smartphone.

RELATED: Google CE Partners to Debut Standalone VR Headsets in 2017

Despite a week of upbeat virtual reality developments, promises and encouragement -- the first Disney-backed Marvel VR game, six Emmy nominations for VR "experiences," an endorsement from a top streaming media packager plus a big (albeit temporary) discount from Oculus -- the outlook for the immersive technology continues to baffle media analysts.

The recent string of frothy announcements comes just a few weeks after Ericsson released a generally effusive outlook about VR, especially its value in video programming.

So while technology and programming suppliers continue to proclaim VR's looming role in entertainment (as well as in industrial, medical and other professional applications), media operators are still going slow in planning for the bandwidth and transmission requirements that VR will require. For now, much of the discussion still revolves around the near-VR (but usually not immersive) presentations of 360⁰ cameras, increasingly showing up as thumbnail videos in social media and other online feeds.

Nonetheless, the mid-summer bump of simultaneous VR developments served as a reminder that this technology could still become a $100 billion global industry by 2020 (as Nokia forecasts) and reach 49.2 million American by 2019, according to a report by eMarketer.

At Disney's D23 Expo in Anaheim, Calif., last weekend, the studio plunged back into the games category (from which it had withdrawn last year) via its subsidiary Marvel. It unveiled "Marvel Powers United VR," which will debut next year. Gamers can play at varying skill levels using Marvel characters such as Rocket Raccoon, Deadpool, Captain Marvel and The Hulk. Disney has partnered with Facebook-owned Oculus.

Related > CTA Projects Record Revenue for VR

A day before D23 began, when the National Academy of Television Arts & Sciences announced nominees for the 69th Emmy Awards, VR was in the running with six projects nominated in the "Original Interactive Program" and "Creative Achievement in Interactive Media Within a Scripted Program" categories (the academy hasn't created a VR category).

In the first category, all three nominations came from Oculus, some with a partner. One of those nominees is The People's House, featuring a White House tour with Barack and Michelle Obama. The second category included The Mr. Robot Virtual Reality Experience from USA Universal Cable Productions, Stranger Things VR Experience from Netflix and CBS Digital, and The Simpsons – Planet of the Couches from Gracie Films, 20th Century Fox Television and Google Spotlight Stories.

More Content, Lower Prices
Separately, Oculus announced that it will put $50 million of the $250 million already committed to VR content into “non-gaming, experiential VR content," according to published reports.

Meanwhile Oculus just slashed its equipment pricing. It has temporarily bundled its Rift headset and Touch controller into a $399 package, about $200 lower than the $598 price announced in March, which itself marked a drop from the $799 Oculus kit price early this year. The company said the summer-long promotional pricing seeks to attract potential customers who "may have been sitting on the sideline because of price," as well as viewers who have been waiting for more apps and games to become available.

Related > VR Equipment Market Mixed: Study

And at a July 18 webinar on "How to Produce, Deliver, Monetize & Experience VR Content,” NeuLion and Nokia executives urged media companies to plunge into VR opportunities.

VR has moved "beyond simple streaming,” said NeuLion executive VP Chris Wagner, because "there’s so much more to do to interact with the viewer” to enhance the video-viewing experience.

“Compelling content is [vital] to make sure that you have that most immersive experience,” added Malachi Bierstein, head of VR sales at Nokia. 

“Without the content, not really much else matters," Bierstein said in published reports from the webinar. "So, really that compelling content is going to be the ultimate driver of VR adoption."

Their pleas for high-quality video content backed up findings from an extensive Ericsson "Merged Reality" study published a few weeks earlier.

That study found that 54% of respondents believe VR devices will become the new screens for video. About the same number (53%) expect video to be one of the most popular uses for VR.

Notably, current "early adopters" were significantly more enthusiastic than survey respondents who "are planning to use a headset," but the overall optimism is promising for a product that currently has a very limited footprint. (According to eMarketer, only 2.9% of Americans now use a VR headset at least once-per-month, a figure that will grow to just 5.2% by 2019.)

Related: Facebook Dives Deeper Into AR

Many analysts still believe that augmented reality -- a more limited, less expensive approach to content enhancement that doesn't require special headsets and other gear -- will make its mark in the mass media well before VR. As an example: During next month's total solar eclipse, the Weather Channel will use AR during its all-day coverage to explain the science of how the eclipse develops.

Perhaps even more pertinent: A Facebook group that has focused on VR for several years this week expanded its name to "Virtual and Augmented Reality."

Amid the slew of announcements Apple made Monday at its Worldwide Developers Conference, the CE giant announced bigger plays into emerging sectors that included augmented reality, virtual reality and the smart home.

On the VR front, a new line of iMacs will have enough pop to support virtual reality services and applications. That optimized VR software for the new macOS, called High Sierra (set to ship this fall following a beta period), will work with the Valve, Unity and Unreal engines.

RELATED: Apple TV Opens Door to Amazon Prime Video

Looking to take augmented reality to the next level, Apple introduced a new core technology called ARKit that will use the capabilities of the iPhone to identify surfaces such as a table and to let users add an object such as a lamp, coffee cup or vase.

RELATED: Facebook Dives Deeper Into AR

The ARKit, to be supported in iOS 11, to be released this fall, uses the phone’s sensors and cameras to find those surfaces and to estimate ambient lighting. Hundreds of millions of iPhones and iPads will be capable of using ARKit, making it “the largest AR platform in the world,” Craig Federighi, Apple’s SVP of software engineering, claimed, seemingly taking aim at Tango, Google’s AR platform for certain Android devices.

Wingnut AR, Peter Jackson’s new production company dedicated to augmented reality, was on hand to demo a real-time battle game/experience that will be offered in the Apple App Store later this year.

In the smart home arena, Apple will be looking to grapple with products such as Google Home and Amazon Echo with the launch later this year of the HomePod, a high-end, connected home speaker that will sell for $349.

HomePod, at less than seven inches tall, is covered in a 3D mesh fabric that hides a seven-array beamforming tweeter pack, a four-inch woofer and is controlled by the A8, the same chip used in the iPhone.

In addition to working with Apple Music, HomePod also has a six-microphone array that works with Siri, and is made to work with HomeKit devices.

HomePod, available in white and space gray, will start shipping this December in the U.S., U.K., and Australia, then follow to other parts of the globe.

Apple also trotted out a new line of the iPad Pro, the higher-end, business-class version of its tablet platform, supporting a full-screen keyboard and 30-plus languages, as well as HDR video.

A new feature called “ProMotion” will double the max refresh rate to 120Hz, enabling smoother and more response to video and other content.

A 10.5-inch version starts at $649, while the 12.9-inch model starts at $799. Both will start shipping next week and will support iOS 11 when the new operating system is released this fall.

When you rearrange the letters of "reality" (as in "virtual" or "augmented"), you get "retail" with a leftover "y."

As in "why."

Several reports last week underscored the shifting realities in the retail business, while a separate influx of developments slammed home the imminence of altered video reality, whether you like it or not. And, yes, the two categories are connected.

As in "interconnected."

Best Buy, the electronics retail behemoth, surprised Wall Street last week by reporting a small increase in quarterly revenue -- thanks almost entirely to a sizeable 23% year-over-year climb in online sales (about $1 billion in the first quarter), which offset in-store sales declines. Analysts quickly noted that Best Buy's unexpected jump came amid devastating consumer electronics (CE) fates at other retailers, notably h.h. gregg and RadioShack (forgotten but not yet gone), both of which have filed for bankruptcy. (Pictured: Radio Shack storefront in Bethesda, Md., on May 14; photo by Gary Arlen)

At the same time, TWICE magazine, in its annual Top 100 Retailers issue, concluded that "Most A/V-based dealers are still reeling from the commoditization of TV." Indeed, the only big winner among the magazine's Top 10 was Amazon, which showed a year-over-year consumer electronics sales increase of 25.4%, retaining its No. 2 position behind Best Buy, which had an overall 0.8% CE sales increase. Other large national retailers in the category included Walmart (down 5%), Apple stores (-3.6%) and Target (-6.5%). TWICE, an MCN cousin publication, covers the consumer electronics retail business.

Those retail trends are reminders of the connections that are reshaping the entertainment/technology landscape.

Separately, Digital Entertainment Group revealed its latest analysis early this month, showing that U.S. subscription video-on-demand revenue has exceeded DVD sales and rentals for the first time. DEG expects that SVOD and other digital delivery systems will soon constitute the largest share of the home entertainment budget. The study found a steep decline in the purchase and rental of entertainment content from 2015 to 2017 (purchases from 44% to 37% and rentals from 30% to 24%) while SVOD has boomed from 26% to 38% in the past two years.

Collectively these developments confirm several realities: Tangible media and brick-mortar stores are fading as digital delivery (including online merchandising) ascend. That's been a 15-year trend, and it rearranges the digital entertainment playing field in a way that offers challenges and opportunities to broadband companies -- especially ones that are looking toward the next realities.

For example: the imminence of VR and AR as part of the evolving video ecosystem.

At the Google i/o developers conference this month, Google offered more details about how it will bring augmented reality capabilities to browsers, especially on mobile devices. Observers quickly tied those features to retailing, such as allowing a person shopping for furniture to use the mobile app to scan a room digitally (with the device's camera) to determine the proper size before placing an online order via Amazon.

As in "Amazon, the go-to preference for all kinds of products" -- not just digital content.

Factor this creeping entry of VR and AR into the entertainment arena, and it's easy to perceive the overhaul taking shape in retail reality -- and the looming competition from digital-first providers such as Google and Amazon as they open yet another front in the pocket-book/attention economy. Major retailers -- which at various times had been considered "coopitition" for broadband carriers -- now have their primary relationships with wireless broadband providers. They (and their virtual storefronts) sell mobile devices and services, including the tools that enable VR and AR.

Moreover, as live TV streaming, a core feature of some competitive skinny bundles, becomes a larger factor in the mobile (and wired) online ecosystem, retailers also have opportunities to insert themselves into that business, and not just smart TVs and digital receivers, but all kinds of viewing devices. It's a way of making up for the lost business in sales of DVDs and other physical media, which they have been abandoning for several years anyway.

Collectively, the retail and video viewing migration plus the rapid VR/AR developments are reminders of the rearranged ecosystem in which carriers will operate. The reality is that viewers will still have to buy their hardware somewhere, but it may not be from retailers as we knew them.

Hence, everyone is trying to figure out how the new augmented and virtual realities play into this altered verisimilitude.

Virtual reality hardware is poised to hit $3.6 billion in 2017, and surge to $37.7 billion by 2020, SuperData Research predicts in a new consumer report focused on the emerging sector.

The firm, which sees hardware to outpace VR software sales until 2020, expects VR software/service revenues to reach almost $1 billion this year.

The study also predicts that 21 million “premium” VR headsets will ship this year, more than tripling 2016’s totals, while 59 million “light” mobile VR headsets will ship in 2017, versus 84 million in 2016. A recent study from Strategy Analytics also found that mobile VR platforms are still way out in front, but represent a small share of overall VR revenues.

RELATED: High-End VR Platforms Struggling for Market Share

SuperData Research, which puts Google Daydream in the “premium” category, expects 6.8 million of those devices to get into consumer hands this year.

RELATED: Google Unveils Daydream View VR Headset, Controller

And while retail demos are the most popular way U.S. consumers get interested in VR before buying products, “poorly managed” demos and people with little knowledge of those products is having the opposite effect by causing friction and lowering adoption and interest.

RELATED: Analyst: Best Buy Oculus Demo Shutdown 'Doesn't Bode Well' 

On the augmented realty (AR) end of the market, Pokémon Go earned 96% of all AR software revenue in 2016, the research firm said.

SuperData Research also predicts that Mixed Reality and AR will earn a combined $30.4 billion in 2020, and that MR devices will eventually overtake VR revenues.  

Video will continue to drive mobile traffic in the years to come, but a subset of traffic tied to virtual reality and augmented reality services and applications will also be on the rise, according to a new study from Cisco Systems.

Worldwide VR-related mobile traffic is expected to reach 141 petabytes per month in 2021, up from 13.4 petabytes in 2016, Cisco predicts its latest study -- Mobile Visual Networking Index (2016-2021).

Cisco also expects the number of VR headsets worldwide to rise five-fold during that span, from 18 million in 2016 to nearly 100 million by 2021, with more than half of them to be connected to smartphones.

AR-related traffic is also expected to grow to 20 petabytes per month by 2021, versus 3 petabytes in 2016.

Looking at mobile’s bigger picture, Cisco sees video consuming 78% of global mobile traffic by 2021, compared to 60% last year. The average mobile traffic per user is also expected to rise to 8,423 megabytes in that five-year timeframe, up from 1,456 MB last year. By 2021, there will be nearly 12 billion mobile-connected devices (including machine-to-machine modules) and 1.5 mobile devices per capita, versus 8 billion and 1.1 per capita in 2016.

From a raw data standpoint, global mobile data traffic will hit 49 exabytes per month, or 587 exabytes annually, by 2021. That annual run-rate would be equivalent to 122 times more than all global mobile traffic generated in 2011.

Live video is also poised to become 5% of mobile video traffic by 2021, representing a CAGR of 108%.

Also by 2021, Cisco believes that 53% of mobile traffic will travel on 4G networks worldwide, compared to 29% on 3G networks, and 9% on 2G networks. 4G will become the dominant mobile connection type by 2018, rising to 56%, Cisco predicts.

WiFi, a central component of most cable operator wireless strategies, will also continue to play a starring role with wireless.

Cisco sees fixed/WiFi traffic surpassing fixed/wired traffic starting in 2018, and 63% of mobile traffic to be offloaded by WiFi by 2021.

Total public WLAN and community hotspots reached 94 million last year, and will explode to 541.6 million by 2012, led by deployments in the Asia Pacific region, and driven in part by community WiFi/homespot growth, use of TV Everywhere apps, and public transportation access. Later, Cisco sees WiFi capacity trading, the Internet of Things and connected cars (in-car WiFi) also playing a significant role.

As for average mobile speeds, they are set to rise 3x worldwide – to 20.4 Mbps by 2021, while WiFi averages jump to 32 Mbps.

Cisco also found that 10% of mobile users consumed 10 GB per month in 2016, while 65% consumed more than 2GB per month. 

SubVRsive, a “full-service” virtual reality and augmented reality company, has landed a $4 million “A” round from WPP, and has named former Hulu exec Johannes Larcher as CEO.

Founded in August 2015 and based in Austin, Texas, SubVRsive has developed VR experiences with partners that include Lionsgate, MTV, Comcast and Showtime. Showtime, for example, worked with SubVRsive for a VR  of a recent bout between Deontay Wilder and  Artur Szpilka, and for The Circus, a documentary series that followed the campaign trails of then-presidential candidates Hillary Clinton and Donald Trump. The startup also teamed with Comcast to help capture the company’s presence at last year’s SXSW conference.

RELATED: Showtime Wraps VR Around ‘The Circus’

According to the company, its helps partners conceptualize their VR experiences, and is also involved in their pre-production, production, post-production and deployment. In addition to producing 360-degree videos, it also builds custom apps. 

Larcher, SubVRsive’s new CEO, handled Hulu’s business outside the U.S., including the launch of Hulu Japan (Hulu launched service in Japan in September 2011, and Hulu’s Japan business was fully acquired by Nippon TV in April 2014).  He was also part of the team that crated paid search at Overture Services (now Yahoo! Search), and was CEO of Academy123, a provider of homework help and self-study guides that was acquired by Discovery Communications in 2006.

SubVRsive said company founder Austin Mace will work closely with Larcher in a new role of chief creative officer.

SubVRsive investor WPP recently joined a group that is investing $50 million toward VR projects with IMAX.

Fox Sports and LiveLike will add a dash of VR to Sunday’s Super Bowl matchup between the New England Patriots and the Atlanta Falcons.

They’re teaming up to offer a virtual, digitally-rendered suite during the game that will present highlights from the game in near real-time via the Fox Sports VR app for iOS and Android devices and tight integration with the Samsung Gear VR platform.

They said the VR experience, offered during Super Bowl LI, will enable users to pick from six different cameras placed throughout NRG Stadium in Houston. They expect to provide 20 of the most exciting plays from the game, as well as prepared content for pre- and post-game.

Though use of the app in tandem with Gear VR and Cardboard headsets will provide an immersive 360-degree experience, viewers will also be able to view it via the app without a headset.

Other partners include Avid, which will provide the experience’s augmented reality graphics platform, Twizted-Design (data-driven graphical integrations, EVS (UHD replays technology), and Ateme (multiscreen UHD and HD encoding).

The Super Bowl LI partnership is one of several recent ones between Fox Sports and LiveLike, which also teamed up for MLS Cup late last year, and last fall’s Big Ten championship football game.

RELATED: Fox Sports Lands Audi as Sponsor of MLS Cup VR Coverage

A key difference is that those previous offerings stitched in a live 2D feed of those games into the digital suite. For Super Bowl LI, the intention is to provide the near real-time highlights and to offer a taste of VR, given that many people will be watching the game in relatively large parties.

“I believe this will be the first of many Super Bowls broadcast in VR, making February 5th a historic day for both LiveLike and for the larger VR industry as a whole,” Miheer Walavalkar, co-founder and chief business officer of LiveLike, said in a statement.

“We are thrilled to bring what we believe is the most innovative sports viewing experience to the Super Bowl via the FOX Sports VR app” added Michael Davies, SVP of field & technical operations at Fox Sports. “The LiveLike platform helps us bring viewers inside the stadium for the best moments throughout the game and replay them from the six different camera angles in virtual reality.”

Hillcrest Labs, the company behind a “sensor processing” and navigation technology called “Freespace” that's used in a wide range of smart TVs and other consumer electronics devices, has been acquired by InterDigital Inc.

Terms of the agreement were not disclosed. Hillcrest and its team of about 40 employees will remain based in Rockville, Md., and join InterDigital, they said.

Founded in 2001 by Dan Simpkins, Hillcrest’s customers have included LG Electronics, Samsung, Universal Electronics, Hisense, Lenovo, ZTE, Coolpad, Roku, LeEco, and Sony, among others.

RELATED: Hisense Builds in Hillcrest

In 2013, Hillcrest became the first vendor with motion control technology to license the Reference Design Kit (RDK), the preintegrated software platform for IP and hybrid gateways and set-tops that’s being managed by Comcast, Liberty Global and Charter Communications.Earlier in its history, Hillcrest developed a browser optimized for TVs called Kylo that drew some attention from Hulu. In 2009, Hillcrest and Nintendo settled a patent lawsuit that Hillcrest had filed in 2008 pertaining to technologies used to power controls for Nintendo’s Wii gaming consoles.

“Hillcrest Labs is driving some of the foundational innovation in sensors and sensor fusion, a technology that is already important today, and poised to become pervasive in a broad range of consumer electronic products including smartphones, AR and VR systems, wearables, and service robots, among others,” InterDigital’s CEO William J. Merritt said in a statement. “Their customer base features some of the top electronics companies worldwide, and adding them to the InterDigital team broadens our offering for mobile devices and accelerates our technology footprint in markets that are adjacent to our existing position.”

Sales of virtual- and augmented-reality devices were up 300% during the six-month period between May and October compared with the previous six months (November 2015 to April 2016), according to entertainment research firm The NPD Group.

NPD said it has added VR/AR measurement to its Retail Tracking Service, aiming to give both retailers and manufacturers a clear picture of how the category is performing. The addition comes during the all-important holiday shopping season.

“Given the growing interest in VR/AR technology and the wide range of products available to meet consumer needs, we anticipate 2016 holiday sales have the potential to double 2015 holiday sales,” said Ben Arnold, executive director and industry analyst for The NPD Group.

Read more at broadcastingcable.com.

NEW YORK — The virtual reality and augmented reality sectors are still spinning inside a hype cycle, but the high levels of investment and interest — as well as an array of recent product launches — all seem to point to boom times ahead.

And there’s no shortage of those signs. Sony just launched the PlayStation VR platform for its popular gaming consoles; Google is about to pull the trigger on the retail debut of its new mobile- focused Daydream platform; and Baobab Studios, the startup focused on animated VR content, just banked a $25 million “B” round of investment.

The buzz and excitement around VR and AR were clearly present last week at VR 20/20, New- Bay Media’s first day-long event on this new market, and the event that kicked off NYC Television & Video Week.

ENTERING THE BIG UNKNOWN

Venture capitalists and established consumer electronics and media players are making big bets on VR and AR, but nothing is a sure thing.

While that adds risk to the equation, it’s especially true for VCs that need to time their investments. Being too late is a missed opportunity, and being too early is a good way to flush funds down the drain.

With VR and AR, it’s especially tricky ground today because it’s still full of unknowns, making it difficult to pinpoint the future value of the marketplace, Terence Kawaja, founder and CEO of Luma Partners, said in an opening keynote.

Kawaja said a “base case” prediction sets the VR market’s worth at about $80 billion ($35 billion for software and $45 billion in hardware) by 2025. However, others set that opportunity at as low as $23 billion to as high as $182 billion in that general timeframe.

And while VR has more “firm” funding opportunities than AR, he said his company believes that AR represents a larger opportunity, citing the dollars flowing into (and the secrecy surrounding) AR startup Magic Leap as one example.

He also believes the AR sector, which he expects to feature more “mainstream” applications, will take longer to develop than VR, and that about $3.3 billion in funding has gone into 375 companies across AR and VR.

“AR will become like an application layer to basically everything we do,” Kawaja said, noting that while “VR replaces your experience … AR amplifies it.”

VENTURE CAPITAL VIEWS

Despite the current uncertainty, investors are not shying away, confident that technology heavy hitters will be successful in selling the necessary headsets and other hardware, while others will fill that ecosystem with content, software and applications that suit consumers and enterprises.

“They’ve built the hardware platform, that’s really set now,” Tipatat Chennavasin, general partner at VR-focused The Venture Reality Fund said, on a VC-focused panel, referring to such big technology firms as Facebook (Oculus), Google (Daydream) and Sony (PlayStation VR). “Now it’s time to invest in the software ecosystem that supports that — that’s really the opportunity.”

Intel, which is developing a standalone VR hardware design under the “Project Alloy” umbrella, thinks “it’s going to become a mainstream computing platform,” Arjun Metre, investment director at Intel Capital, said during a panel with executives from strategic investment units at Comcast, Time Warner and Samsung.

Chris Fralic, partner at First Round Capital, which, he said, has backed more than 350 companies with early “seed” funds, said his firm has been looking at social applications, at “how the 2D and 3D worlds come together” and at parallels with how app stores developed in 2008 with challenges for publishers and consumers “that are playing out again today.”

They were also asked if virtual reality has moved past the point of worrisome comparisons to 3DTV, which fizzled out after a year or so of consumer-electronics fueled hype. Scott Levine, managing director of Time Warner Investments, said the comparison to 3DTV often comes up, but he thinks “the dynamics are much different.”

3DTV was about TV sales, Levine said, while virtual reality apps driven by mobile phones are “much more immersive” and the support by the biggest tech companies and the potential reach of applications are much broader than a TV-set feature. “There’s so much momentum,” he said.

Said Intel’s Metre, “We all agree, I think, it’s going to be a massive market.”

The good news for VR content developers is that hardware makers are pumping money in that direction, knowing popular content is critically important. Facebook’s Oculus has already invested $250 million in content firms and plans to invest another $250 million, Chennavasin said.

Comcast Ventures tells the content companies it invests in — including Baobab Studios, Felix & Paul Studios and NextVR — not to worry about monetizing that content yet, managing director Michael Yang said. Between hardware-maker backing and venture investments, “if you manage your company appropriately, you can get well into 2019 and 2020,” he said. Content companies in VR have done well attracting venture funds, relative to content companies in general, he said.

MAKING VR FRICTIONLESS

While price and a breadth of apps and services will help to draw a crowd to VR, reducing friction into these new platforms will go a long way toward helping the new technology connect with the masses, Amit Singh, vice president of business and operations, VR, at Google, said during a keynote presentation.

That, he said, is a big reason why Google’s current work on VR centers in large part on headsets that can be paired with a device that most everyone already has — a smartphone.

Making VR simple and mobile will enable Google to “bring it everywhere” and “make VR a daily habit,” Singh said.

Google gave the world a taste of VR with Cardboard, an inexpensive, entry-level platform that must be paired with a smartphone. The company will soon take it to the next level with Daydream, a $79 Android-powered platform featuring the Daydream View headset and controller.

Daydream will initially be compatible with Google’s new Pixel smartphone, but consumers will soon see eight to 10 Daydream-compatible smartphones hit the market, Singh said.

The platform begins to run when a smartphone is matched with the headset because the two sides talk wirelessly. “It takes all the friction out of being in VR,” Singh explained.

VR GETS SPORTY

Gaming is viewed as a key driver for VR adoption, but the platform will also be used to put consumers inside the sporting world.

Getting fans to slap on a virtual reality headset to watch their favorite teams battle it out on the pitch, the diamond or the gridiron for hours at a stretch will involve more than just fancy camera angles, though. Content providers must offer a compelling social and statistical experience to get viewers to make the VR commitment.

“There are two really big hurdles that this is going to have to overcome,” STRIVR head of sports training Andrew Wasserman said during a sports-focused panel. “One is that that 2D broadcast is a really good experience. The second obstacle is the social [aspect] of watching sports. It’s not that common that I’m sitting alone watching a game. When you’re on a headset, you’re on your own.”

Devin Poolman, senior vice president of digital platforms at Fox Sports, said VR may be more of a companion technology, giving viewers the opportunity to go back to watch a particular play immersively through a “magic window” on their phones.

“There are use cases that will get us there,” Poolman said. “It becomes a really compelling companion experience that is more like what’s been alluded to with in-car cameras, to be able to jump in and see different perspectives throughout the game. I think we’re maybe going to see this as a second screen experience that ultimately replaces the broadcast.”

LOO KING AHEAD TO 2020

The year 2020 is not that far out on the horizon, but much will change with VR and AR between now and then, Eric Romo, the co-founder and CEO of social virtual reality startup AltspaceVR, predicted during the closing keynote.

Among his examples, he observed that many investment firms have a “VR person,” an individual who understands the new market. Romo noted that this similarly played out during the early days of the Internet, “Web 2.0” and mobile.

Today, the notion that one person at any one company can encapsulate any of these now-massive markets is “ridiculous.”

“And VR is the same,” Romo said, noting that companies will embrace and use VR as a foundational technology “or suffer.” In 2020, there will no longer be “VR companies,” but companies that use VR to solve a problem, he said.

Romo also pointed out that today, 360-degree video is the dominant “passive” VR content.

“People sort of know how to make it already,” he said of that category of content. In 2020, he predicted, new forms of “semi-passive” content will emerge, and VR itself will become a new medium under which purpose-built content will flourish.

He also made light of the fact that just about every PowerPoint on this topic presents the “sunglasses slide,” used to represent the merging of VR and AR in a way that resembles a pair of Wayfarers. In 2020, he predicted, the sunglasses slide will go the way of the dodo as VR and AR “diverge” further and become more useful and support additional markets and specific applications.

Romo also sees major change coming to VR platforms themselves. While today’s focus is on viewers that must be paired with smartphones, gaming consoles or high-powered PCs, the industry, if it’s being honest with itself, will admit that this is a “broken” model, he said. In the coming years, he said, standalone platforms “optimized for VR” will dominate and outsell today’s approaches, pointing to initiatives such as Oculus’s Santa Cruz project, and designs from Qualcomm (the Snapdragon VR820) and Intel (Project Alloy).

And what of the “Metaverse,” a term that is loosely defined as a collective, virtual shared space? Romo argued that the Metaverse won’t necessarily be based on what’s been proposed in books such as William Gibson’s Neuromancer or Ernest Cline’s Ready Player One. Instead, the one Romo sees emerging will embody “the evolution of the Internet” and will grow into something much different than what is being imagined now.

It will not be purposefully built, Romo said, but will instead materialize from the hard work of disparate groups, all trying to deliver great experiences.

“It’s organic … it’s an evolution,” he said.

Kent Gibbons and Mike Farrell contributed to this report.

In addition to appealing to mass audiences, making money on virtual reality (VR) content is another significant challenge faced by this emerging market.  

Big studios, programmers and content aggregators are all developing and launching VR and 360-video fare, but they still need a way to monetize it effectively.

A company that’s trying to step up to that challenge is Vertebrae, an ad-tech startup that is focused on the VR sector with an eye toward emerging augmented reality (AR) apps and services.

While many early economic models for VR lean toward transactional, one-off pricing, consumers will be hard-pressed to pay for 360 videos that tend to be short-form in nature, Vincent Cacace, CEO and founder at Vertebrae, said. 

That, he said, opens the door to new ad-based models that can fit into the VR environment. And rather than relying only on traditional pre-roll and interstitial ads, the immersive nature of VR lends itself well to more creative native ad insertion, product placement opportunities and even mini-games, he said.

And Vertebrae has some cash in the bank to apply toward those aims, as it announced Wednesday (September 14) a $10 million series “A” round, but did not reveal its specific investors. However, they are not strategic investors, such as studios or networks, according to Vincent Cacace, CEO and founder at Vertebrae.

RELATED: Google's VR 'Daydream' Nearing Reality

But the baseline approach for Vertebrae is to offer a VR-optimized advertising platform that enables various publishers and with data management platforms (DMPs) and demand side platforms (DSPs) partners to surface and sell VR ad inventory.

Of note, Vertebrae said it is working with the Interactive Advertising Bureau as a “founding member” of a team that will develop what’s being billed as the first ad standards for VR and AR.

Lionsgate is an early example of a customer, which is using Vertebrae’s platform for a VR ad/90-second experience to drive interest in the September 16 premiere of Blair Witch. Another client is Otherworld Interactive, a company that makes virtual worlds for entertainment, music and games

Vertebrae has other deals in production but can’t reveal them yet. However, Cacace said travel, entertainment, auto and consumer packaged goods represent sectors that are most interested in VR ads.

Vertebrae’s platform is currently being offered as a private beta to studios, gaming companies, creative agencies and brands, with plans to go commercial by end of year or early 2017.

Its platform is also made to be headset-agnostic, though Vertebrae is initially focusing on the mobile VR market, which includes Google Cardboard and its coming Android-powered Daydream as well as the Oculus-based Samsung Gear VR, rather than on systems that are more focused on gaming, such as the Oculus Rift and Sony PlayStation VR.

“Mobile is more casual and shorter-form in nature,” Cacace reasoned.

Vertebrae is also building prototypes for AR, a sector that “will be bigger than VR,” Cacace predicted.

Launched last year, Santa Monica, Calif.-based Vertebrae has about 13 full-time employees hailing from companies such as Oculus and Facebook, as well as YouTube, Activision and Twitter. 

Another forecast believes that there will be some significant financial substance to go along with all the hype around virtual reality and augmented reality.

Worldwide revenues for the AR and VR market will surge from $5.2 billion in 2016 to north of $162 billion in 2020, predicted International Data Corp. (IDC) a new report/forecast.

In that report – the Worldwide Semiannual Augmented and Virtual Reality Spending Guide – IDC sees AR/VR generating a compound annual growth rate 181.3% over the 2015-2020 forecast period.

IDC expects sales of AR/VR hardware to generate more than 50% of worldwide revenues during that span, and sees the Asia Pacific (excluding Japan), the U.S. and Western Europe accounting for 75% of worldwide the sector’s revenues.

IDC’s forecast arrives seven months after Goldman Sachs analyst Heather Bellini issued a report predicting that VR and AR could generate up to $182 billion in revenue, including hardware and software/content, by 2025, and eclipse television revenue.

IDC noted that the pairing of high-powered smartphones with headsets (something that Google is pursuing hard with its new Android-based Daydream project) are poised to drive the market forward to the masses.

"For many years augmented and virtual reality were the stuff of science fiction. Now with powerful smartphones powering inexpensive VR headsets, the consumer market is primed for new paid and user generated content-driven experiences,” Chris Chute, VP, customer insights and analysis at IDC, said in a statement.

"The rise of new, less expensive hardware will put virtual and augmented reality technology within the grasp of a growing numbers of companies and individuals," added Tom Mainelli, VP, devices & AR/VR at IDC. "But, as always, what people can do with that hardware will depend upon the applications and services that power it. In the coming years, we expect developers to create a wide range of new experiences for these devices that will fundamentally change the way many of us do work."

Like a lot of people, Dmitri Williams had never heard of Pokémon Go until it started trending on social media on Saturday, July 9 — and when his daughter downloaded it the next day.

“She said she wanted to go play with it outside,” said the CEO of gaming research firm Ninja Metrics and an associate professor at the University of Southern California. “That never happens, so I was all for it.”

SETS A SALES RECORD

By July 13, the augmented reality game had become the biggest mobile game in U.S. history, based on its 21 million active users, beating out 2013’s Candy Crush Saga and 2012 release Draw Something, according to data from SurveyMonkey. Three days into its release, Pokémon Go had more users than Twitter, and was No. 1 on both the Google and Apple App Store charts.

As of last Wednesday ( July 13), Pokémon Go attracted just under 21 million daily active users in the United States, surpassing Candy Crush Saga’s rumored peak U.S. smartphone audience of 20 million users and making it the biggest mobile game in the nation’s history.

How did a title from a little-known developer (Niantic) become an overnight hit? According to Williams and other analysts, the right confluence of events occurred: Smartphone usage is now ubiquitous; people are comfortable with using geolocation technologies; and the Pokémon franchise already had a dedicated fan base.

“You’ve got a perfect storm of social and technological things happening,” Williams said. “You can expect a zillion copy cats, because how these things work. This may or may not be a one-hit wonder, but gaming developers are creative, and they’ll do more with augmented reality than finding a Pokémon at your corner grocery store.”

Augmented reality (AR) games like Pokémon Go have been made before, and have been around for decades, Williams said. But this one could be a game-changer, he and other analysts said, that gets AR out from under virtual reality’s shadow.

“VR has been getting more of the headlines, but AR is consistently a more valuable technology,” Joost van Dreunen, CEO of New York-based video game data and analysis firm SuperData Research, said. “The two have long been lumped into the same bucket, but what Pokémon Go does is show everyone what can be done with AR, pushes it to the foreground.”

The consensus among industry observers is that the game’s novelty will wear out sooner rather than later, van Dreunen said. But Pokémon Go helped raise the stock of Nintendo — which has a 32% share of the franchise — by nearly 35% by the end of trading on July 13. So it’s a safe bet that others in the gaming and augmented reality space will look to repeat its success.

TEST OF TIME LOOMS

“This clearly demonstrates that AR can cross over into the mainstream on the devices people already have in at least some cases — you don’t need a bulky, expensive headset to use Pokémon Go, and that’s its power,” Jan Dawson, chief analyst with Jackdaw Research, said. “As such, it may help the concept of AR, but it doesn’t necessarily do anything for the kind of AR and VR experiences big companies are piling so much money into.”

The real test for Pokémon Go is whether people are still playing it weeks from now, Dawson said. That’s because the game is time-intensive, requires travel and relies on nice weather to keep users wandering around, looking for the hidden animals that make up the main part of the game. That combination won’t last forever, he said.

“The user experience has to be good, and they’ve done a good job on this,” Brian Blau, research vice president for per sonal technologies for Gartner, said. “But I don’t know if this changes the conversation for AR. AR games have been around on smartphones for a very long time. And they’re all gone now.”

If anything, Blau added, Pokémon Go was a much-needed shot in the arm for Nintendo and its investors, who’ve seen the gaming company lag behind rivals Sony and Microsoft for years.

Michael Pachter, managing director of equity research for Wedbush Securities, said much the same. The game brings together strong assets in Nintendo and Pokémon, but, “It’s only been a week, so premature to make the call on the game’s success.

“I think the success is more attributable to the intellectual property than to the game play. We’ll see if there is another successful AR game,” he said.

“My bias is that the game has challenges to remain on the top of the charts. It requires activity, which is anathema to couch potatoes, and sucks up battery life, which is anathema to Snapchat users,” Pachter added. “I think it will run its course at the top in a month or so.”

Comcast Ventures is part of a group that participated in a $50 million Series B round in Meta, an augmented reality tech startup founded in 2012.

Meta, which has raised about $73 million so far, said Horizons Ventures Limited, Lenovo, Tencent, Banyan Capital, and GQY also contributed to the B round.

Comcast Ventures’ financial interest in AR follows recent investments in tech and content startups focused on virtual reality (VR), including Spaces, Baobab Studios, NextVR and AltSpaceVR.

“AR has been around for decades but only recently have the requisite technologies become ‘good enough’ to allow a new generation of entrepreneurs to give it a go,” Michael Yang, managing director at Comcast Ventures, noted in thisblog postabout the investment in Meta. “Useful for collaboration and for communication, Meta’s AR products can change the future of work for employees in industries such as architecture, engineering, healthcare, and education, amongst others.”

The startup is now focused on Meta 2, a platform it unveiled at TED 2016 in February. The development kit for Meta 2 is slated to ship in Q3 2016. The kit, which runs $949, includes the Meta 2 AR headset, software development kit, four speaker near-ear audio systems, and a 720p front-facing camera.

Meta  said it will use the new round to build on its hardware and software tech base and for business expansion, including app development. Notably, it will be entering a market segement also being targeted by Microsoft and its AR-focused HoloLens platform. 

“It is incredibly gratifying to have the support of big thinkers and investors who understand the importance of creating a new human-computer interface, anchored in science, Meta CEO Meron Gribetz said in a statement. “Our friends at Tencent, Lenovo, Horizons Ventures, Comcast Ventures and all the other investors really get what we’re doing and why Meta is different from the other players in AR. They understand that the combination of our advanced optical engines along with our neuroscience-based interface design approach are what will create a computing experience that is 100x easier to use and more powerful than traditional form factors.”

Oculus, the Facebook-owned virtual reality company, started shipping its high-end platform, the Rift, late last month and has been grappling with shipping delays in the early going. 

So, it’s off to a slow start despite a broader market that continues to maintain buzz thanks to the Samsung Gear VR (which also uses Oculus’s platform but requires users to pair the headset to a compatible smartphone), and the launch of the HTC Vive, and excitement over the coming Sony PlayStation VR.

But getting off to a slow start is not much of issue in the eyes of Facebook chairman and CEO Mark Zuckerberg. In fact, he expects it.

“This is very early and we don't expect VR to take off as a mainstream success right away,” he said Wednesday (April 27) on the company’s first quarter earnings call, noting that most early adopters of Rift are gamers and developers.

“It's going to take a long time to get there,” he added, sidestepping a question about Rift unit shipments. “And a lot of what we felt like we were buying there was a critical mass of the best people and the best technology to go do all the things that we needed to go do over the next 10 years to drive that home and turn that into a big platform.”

And he still sees gaming and video as the big use-cases for both VR and augmented reality.

Though he didn’t delve into Rift shipments (Facebook reiterated the VR won’t have a material impact on revenue in 2016), Zuckerberg noted the more than 2 million hours of video have been watched on the Gear VR. Also, a 360-degree version of the iconic Game of Thrones opening was FB’s most-watched 360 video, generating more than 12 million total views in a 24-hour span (it can be viewed with our without a VR headset).

“But again, I do want to really emphasize, this is early and it's going take a long time. And I know there's a lot of hype around this, and we're just focused on building this to be very good over the long term,” he said.

That said, other parts of Facebook’s business are growing rapidly.

In Q1, more than 1.65 billion people were using Facebook each month and 1.09 billion each day, up 16% year-on-year. Also, 1.5 billion people accessed FB from mobile devices in Q1, up 21%.

Revenues grew 52%, to $5.4 billion, while ad revenue jumped 57%, to $5.2 billion. 

OTOY said HBO and Discovery Communications have taken equity stakes in the company as the programmers look to push ahead with plans to create and publish original holographic content that can be distributed across TV, Web, mobile and augmented reality and virtual reality platforms.  

They did not disclose the amount of the investments.

OTOY’s advisory board includes Dr. Eric Schmidt (executive chairman of Google's new parent company, Alphabet), Samuel J. Palmisano (former chairman, CEO and president of IBM), Ariel Emanuel (co-CEO, WME | IMG) and noted economist George Gilder. Major shareholders include Autodesk and Yuri Milner.

Los Angeles-based OTOY, whose advisory board includes Eric Schmidt, executive chairman of new Google parent company Alphabet, is currently working with Jon Stewart on the development of upcoming content for HBO built using its platform. In November, Stewart announced a four-year exclusive deal with HBO, with the initial aim to create short-form digital content for platforms such as HBO Now and HBO Go.

“OTOY is unbelievable! It’s a limitless mind blowing creative platform,” Stewart said, in a statement. “My dream is to someday understand how they did it!!!”

“HBO prides itself on being at the forefront of entertainment, both in the exceptional content we produce, and in the ways we bring that content to consumers,” said Michael Lombardo, president, HBO Programming, in a statement. “OTOY has a roadmap for the future of entertainment and technology. Their creativity and drive perfectly aligns with HBO’s. We couldn’t be more excited to invest in OTOY and to work together on original content and amazing experiences for years to come.”

“OTOY technology is a massive breakthrough and we look forward to seeing it take VR and AR experiences, including Discovery VR, to a whole new level,” added Paul Guyardo, chief commercial officer at Discovery Communications.

“The future of media and entertainment is not going to be constrained by a screen, nor consumed through monolithic apps or platforms,” said Jules Urbach, founder and CEO, OTOY. “OTOY’s mission is to make holographic and immersive content a mass market proposition for consumers, artists and publishers alike. A key part of this endeavor is unifying production and delivery of content across all possible endpoints, from HTML5, to TV and social, to wearables. With HBO and Discovery as strategic investors and content publishing partners, we couldn’t be more excited to work together to map out the future of entertainment.”