Augmented reality (AR) and virtual reality (VR) are often associated with gaming, and though they’ve undoubtedly transformed the gaming industry, their reach far exceeds any one industry. Various developments in recent years have led to an explosion of the applicability and implementation of AR and VR technology, and based on current trends and future projections, it seems likely this growth will continue.
What is Augmented Reality (AR) and Virtual Reality (VR)?
Augmented reality (AR) and virtual reality (VR) are both terms used to describe devices that virtually modify a user’s perception of their environment. While AR and VR go hand in hand, they are not the same.
AR uses technology to change or enhance the real world in some way, such as apps that allow users to virtually try on Gucci shoes, place Ikea furniture in their home, or test out various Sephora products. VR replaces the real world with a simulated environment. VR devices typically include a headset that allows the user to fully immerse themselves in a virtual reality; examples include popular gaming headsets such as Sony’s PlayStation VR and Facebook’s Oculus VR.
Applications of AR and VR
The growth of the AR/VR industry is based in part on the growing potential applications of the technology. While AR and VR have obvious uses in the gaming and entertainment space, they have also begun to be used for other purposes such as training, collaboration, autonomous vehicles, and travel.
Training – Institutions from schools to employers have begun using both AR and VR technologies to teach and train people. For example, industries where training may prove hazardous, such as construction, have begun using AR and VR to provide training for riskier tasks, eliminating the safety concerns of typical hands-on training.
Collaboration – VR can help make virtual events, such as conferences or meetings, more collaborative. While this has recreational applications, it can also apply to remote working environments, which have become increasingly prevalent.
Autonomous Vehicles – While fully autonomous vehicles, which may include a large amount of AR components, still have a ways to go, we are already seeing car manufacturers incorporating elements of AR technology in their vehicles, for example, to point out historical landmarks or other noteworthy locations.
Travel – Many tourists may wish to test out a location prior to visiting and VR allows them to do just that. VR apps also exist that allow users to re-experience previous trips, taking the place of travel mementos such as photos or videos.
Trends Impacting the AR/VR Industry
The increased implementation of AR and VR technology is fueled by a number of trends and developments.
First of all, the quality of AR and VR technology has increased, while the cost of producing the technology has decreased dramatically. This has produced a cycle of increasing supply and demand. As the technology grows cheaper more people can purchase it, and the more people who have purchased the technology the larger the demand for immersive content. This leads to more production of AR and VR content and technology, which drops the price and increases the quality, continuing the cycle. Additionally, AR and VR apps have begun to include machine learning and artificial intelligence (AI). This creates a better experience for users. Finally, more brands have begun using AR and VR in their marketing. As more companies have begun using this technology, more consumers have begun to expect these capabilities.
AR and VR Growth Outlook
As of February 2021, the AR/VR industry is valued at $30.7 billion and its growth is expected to increase dramatically in the next few years, reaching a total of $300 billion by 2024. This growth is mirrored in the sale of VR headsets, which were expected to reach 5.5 million units in 2020. According to Statista, in a study of game developers, 37% considered VR an important platform for future growth.
The Takeaway
AR and VR technology are not just a trend; they’re the beginning of a revolution whose impact will continue to shape almost every industry in the coming years.
List of AR & VR Stocks
- SNAP, Inc. (NYSE: SNAP)
- Himax Technologies, Inc. (NASDAQ: HIMX)
- Lumentum Holdings, Inc. (NASDAQ: LITE)
- Vuzix Corporation (NASDAQ: VUZI)
- Tencent Holdings, Ltd. (OTC Pink: TCEHY)
- Nextech AR Solutions Corp. (OTCQB: NEXCF)
- ImagineAR, Inc. (OTCQB: IPNFF) (CSE: IP)
- Tautachrome, Inc. (OTC Pink: TTCM)
- PTC, Inc. (NASDAQ: PTC)
- MicroVision, Inc. (NASDAQ: MVIS)
- Skyworks Solutions, Inc. (NASDAQ: SWKS)
- Facebook, Inc. (NASDAQ: FB)
- Sony Group Corporation (NYSE: SONY)
- Microsoft Corporation (NASDAQ: MSFT)
- Alphabet, Inc. (NASDAQ: GOOG)
- Qualcomm, Inc. (NASDAQ: QCOM)
- NVIDIA Corporation (NASDAQ: NVDA)
- Apple, Inc. (NASDAQ: AAPL)
Disclosure: Neither Matt Rego nor Spotlight Growth have any position or relationship with any companies mentioned in this article. No payment was made to create this article. This article should not be taken as a solicitation or recommendation to buy or sell any securities. Please conduct your own research and consult your financial advisor to determine your risk tolerance and investment path. We are not licensed brokers or investment advisors.
