The coming of age of VR
The year is 2025. Mr. Palmer Luckey is a 41-year-old married man living in Chicago and can be described as your typical office goer. He has a 9-5 job, rarely takes vacations, and is always on time in coming to office. He doesn’t work on Sundays and so Sunday is when Palmer does all the exciting things he plans to do.
Palmer is a paragliding enthusiast. He loves to go paragliding at any opportune moment. Opportune moments unfortunately only come on Sundays! This Sunday he has decided to go to Julian Alps in Slovenia, one of the best recommended paragliding locations in the world. He has already paid for the trip, so it’s only a question of getting ready!
Palmer also has this secret ambition of being a public speaker, something which his job never encouraged nor was required. This Sunday after paragliding in Slovenia, he plans to spend the afternoon giving a speech on “The Future of Extreme Sports” in front of a live audience. He still hasn’t decided the venue but he is preferential towards the Kodak Theatre in Hollywood Boulevard, Los Angeles!
Later in the evening he wishes to take a stroll through the streets and canals of Venice, Italy. He is particularly excited to take a trip through the Venice Grand Canal in the morning light.
Figure 1 Palmer skydiving in Slovenia, giving a public speech in Los Angeles and visiting Grand Canal in Venice all on the same day
Palmer isn’t dreaming! In fact, Experiences like this are very real and commonplace in 2025.
This is the world of Virtual Reality where immersive multimedia (engaging all human senses) or computer-simulated reality simulates an environment with a physical presence in these worlds (fictional or otherwise) and allows the user to interact with some or all of the senses (sight, sound, touch and smell). VR when executed properly ensures that the user is unable to distinguish the real from the virtual because all his senses are being engaged by the VR content. So much so that line dividing the virtual from the real is imperceptible.
History of Virtual Reality
Virtual Reality (VR) as a Technology Vertical has existed right from the 60s. However immersive VR was simply ahead of its time since the amount of technology and computing power required for a VR experience was simply not yet invented! The earliest VR experience was provided through films and mechanical goggles. Though now considered crude, rudimentary and not truly immersive, these were eye openers (pun not intended) of its time.
In the 90s, Virtual Reality was seen as the ‘Next Big Thing’ and every technology company worth its salt tried a hand in it. Most notable was Nintendo launching the Nintendo Virtual Boy. The product was unfortunately a disaster becoming Nintendo’s 2nd lowest selling platform. Most issues were hardware related. The screen was monochrome (uses one color and its various shades), had no head tracking (image on screen does not move according to user’s head movement) and had a low screen resolution.  Health issues such as nausea and dizziness added to its woes. The fallout of the failure of the Virtual Boy was the fact that no company would dare to enter the VR space again for another 20 years.
Figure 3:The disastrous Nintendo Virtual Boy
Resurgence of Virtual Reality
VR took a new shape and direction when the VR company Oculus VR introduced their path breaking product - Oculus Rift. The Rift was crowdfunded by a Kickstarter campaign in 2012 raising nearly $2.5mn.
The Oculus Rift is a head/helmet mounted VR device (HMD) capable of providing immersive, full rotational and positional tracking and also comes with integrated headphones with 3D audio effect. The Rift was part of the vanguard for introducing VR technology to the general public. The Rift thrusted VR back into public minds by negating the previous issues of VR headsets such as dizziness, lack of realism, monochrome images.
The renewed interest in VR prompted Facebook to buy Oculus, a 2-year-old company for $2bn. Technology Consultants, Futurologists and even Media executives realized the potential impact of VR. In 2014, Sony Corporation launched its own VR headset called PlayStation VR. In 2015 HTC along with Valve corporation launched the HTC Vive VR device. Google in a stroke of brilliance launched Google Cardboard, a Do-it-Yourself VR device made out of cardboard. This played a seminal role in bringing VR into the budget segment and immensely helped in creating awareness about the technological marvel which is VR. Virtual Reality had finally arrived.
Figure 5:Oculus Rift Development Kit
The Far Reaching Hand of Virtual Reality
A quick glance of the VR industry and the primary stakeholders might give the impression that the Gaming Industry stands the most to gain from VR. This is further substantiated by the fact that current VR device makers are HTC (collaborating with Valve, a gaming company), Sony (for its PlayStation Gaming Brand) and Oculus (primarily a gaming hardware company). That would be an unfair assessment. Such a statement would be akin to saying that only Mobile Carriers such as Vodafone and Airtel stand to gain from a new smartphone launch. A new smartphone launched on a new platform (like Android or iOS) pushes forward an entire ecosystem of industries (Music Industry, Internet Access, App ecosystem in Healthcare, Retail, education, etc.) and not just the networks like Vodafone. In the same way, the gaming industry currently seems to be the flag bearers of VR because of the apparent proximity of VR to gaming. But make no mistake as they are in no way the gatekeepers.
VR is a fledgling industry which will have a far reaching as well as long withstanding impact. While the internet pushed the data and information revolution into overdrive, VR technology will bombard people with experiences they could have never imagined before including those ‘don’t try this at home’ ones! The entertainment industry has quickly realized that VR is one of the few greenfield segments that are still up for grabs to whoever responds best to this new opportunity.
Current and Potential Applications of VR / How VR will transform current Business models
1. The Advertisement industry after dabbling in digital marketing and advertising will quickly realise the benefits of advertising on the VR platform. VR by its very nature requires very high user engagement (VR images cover a user’s full field of view) and so ads are that much more effective and ad recall is much higher compared to other ‘conventional’ platforms such as the internet. The promotion for the movie ‘Interstellar’ included a VR app that put users in the cockpit of a spaceship from the movie. 
2. In the Healthcare industry, training of surgeons will no longer require a real cadaver nor will practicing and honing their surgery skills require live patients! Similarly, Psychiatrists have started using cognitive behavioral therapy through VR to treat phobias such as fear of flying, public speaking or even fear of heights. Psychiatrists direct their patients in such controlled environments to understand and recognize these fears and cope with these issues .US Military’s Office of Naval Research has shown that exposure therapy using VR can reduce Post Traumatic Stress Disorder (PTSD is a common psychiatric distress disorder among Iraq War veterans due to potentially traumatic experiences in the warzone) 
3. Real Estate and Home Renovation industry would see a sea-change in the way prospective clients are being pursued. Clients would start demanding VR versions of the houses they are interested in, just as they currently demand pictures of the house they wish to see before visiting it. An added benefit for prospective customers would be to see how their furniture would suit the new home by superimposing their current furniture 3D model on the prospective house’s VR video.
If you even wish to see how your current home will be like with a different color on the wall, all it requires would be a point-and-click and you could even buy the paint online right away.
4. The Tourism industry would experience similar shockwaves from the VR industry. Just like movie trailers are an opportunity for media executives to promote their new movies, Theme Parks, Nature Parks and even Historical Landmarks would let users get a sneak peek of what is in store for them when they actually visit these places. The Cedar Point Amusement Park already has VR apps on Play Store and iOS for ‘testing’ out their famed Rollercoaster. The Marriott Group of Hotels is currently using a ‘teleporter’, a booth fitted with an Oculus Rift which transports the viewer to a beach in Hawaii or downtown London. The ‘teleporter’ lets the user feel the sun on their faces and wind in their hair. 
5. Education industry will see advancements in class room training which could impact everyone from mechanics to surgeons. Attending classes by world renowned professors will become an industry in itself and so will virtual classrooms where questions can be asked in real time. Conducting Virtual Field Trips would become commonplace and even practical if visiting the place in person becomes cost prohibitive
6. The Transportation Industry would see similar disruption. VR removes the requirement to physically travel to a location. Discovering new countries, exploring new landmarks could all be done without physically travelling to any of these locations. Every major player from car manufacturers to rail network operators are bound to be affected.  On the other hand Car manufacturers, such as Audi plans in 2016 to use VR to give potential car buyers a complete driving experience along with an inside look at their cars allowing them to customize their new car to their whims and fancies. 
7. The Entertainment Industry will be the one of the strongest examples of disruption of VR in an industry. Gaming is set to be transformed by the presence of VR. Immersive VR Concert experiences are already happening. Want to stand on the stage next to U2’s Bono while he is singing or do you prefer a backseat? Predictably, the entertainment industry is stoked.
Challenges for VR
1. VR is a very effective medium for advertisers. An advertisement displayed on a VR device is guaranteed to obtain the viewer’s undivided attention because VR images cover the entire field of view of the viewer. Such unrestricted engagement with an advertisement will not always bode well for the public who might be shoved such ads literally in the face.
2. Unhindered access to VR content might cause difficulty for the viewer to place what is real and virtual. Psychological problems may arise from prolonged immersion in virtual environments. VR may desensitize users to violent situations.
3. Just like the internet isn’t governed by anyone, VR content too might not be regulated. While that may not necessarily be a bad thing, users may be shown content they may not be very comfortable with (extreme violence, pornographic content etc.)
VR-Disrupting and Transforming Industries
When the internet revolution started off, entire industries were weeded out or transformed. The entire economy was revitalized during the dot com era. VR is set to be even more transformative than the ‘flat’ Web, reaching every segment of every market and recreating it to be virtually accessible. Since VR experiences are easily produced and transferred, massive economy-of-scale savings will kick in resulting in less expensive goods. Pollution and emissions will drop as students attend virtual classrooms. Attending a music concert for a few hundred rupees (avoiding hotel fees, travel costs etc.) all in the confines of your home will be commonplace. Market Forces will in the end decide how much VR will penetrate our daily lives and it will be downright spectacular.
Note: Mr. Palmer Luckey mentioned in the beginning of this article is no accountant but the 22-year-old founder of Oculus VR and the inventor of Oculus Rift and the man we all have to thank for singlehandedly restarting another era of Virtual Reality!