The VR industry’s breakout year is ‘Just The Beginning’

Published 06 November 2020, 04:41

Virtual reality has been hyped for several years but 2020 has been a breakout year for the sector.

It entered the mainstream when Facebook acquired VR headset company Oculus for US$2.3 billion back in 2014.

At the time Mark Zuckerberg said: ”Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

It’s fair to say this hasn’t happened yet – at least beyond gaming. But slowly VR is beginning to expand its horizons as companies realize what it makes possible.

VR uses range from National Museum Showcase to Recalibrating The New Normal With Virtual Meeting System

Like other sectors surging during COVID-19, VR prospered because locked down consumers had little other choice.

“COVID has been devastating but it has sharpened almost everyone’s adoption of technology – from Zoom simply to run meetings, to augmented reality (AR) and mixed reality (MR) to try and rise above the noise,” explained David Shering, the founder & creative director of industry player Handbuilt Creative.

AR and MR are slightly different to VR. AR overlays virtual objects on the real-world environment and MR anchors virtual objects to the real world.

“VR is definitely becoming more mainstream – particularly due to Oculus Quest being such a runaway success, albeit in the gaming sector,” he explained.

“Apple’s big push into Augmented Reality (via ARkit and adding LIDAR to their devices) signals very strong pathways for the future.

“We know that Augmented Reality wearables will replace the smartphone, and we might see that occur much earlier than people expect – perhaps [in] the next 6 to 18 months.”

 

ASX’s only pure play VR stock soars in 2020

The ASX’s only pure play is Vection (ASX:VR1) and it has had a breakout year.

In March, in the middle of the COVID-19 market crash, it bought 3D design platform Mindesk. Mindesk helps engineers design projects (such as houses and industrial products) from scratch using virtual reality.

It offers bi-directional real time links across other design software, allowing users to seamlessly switch to virtual reality from desktops.

Mindesk relies on its own graphic engine rather than a third party’s. This facilitates greater performance and customisation than the competition.

 

Rendering of Mindesk software (Picture: Vection Technologies)

 

We’re just at the beginning’

Speaking with Stockhead from Perth yesterday, Vection director and chief operating officer Gianmarco Orgnoni said it had been a big year but this was just at the beginning. He noted the enterprise segment was another opportunity for VR and the sky was the limit.

“I would say it is a market in its infancy, I think COVID has accelerated significantly the market interest in this technology. But I think there’s a lot of work to be done and I think we’re just at the beginning and great adoption is going to be seen in the next couple of years.” Vection is anticipating revenue generation to come very soon.

“We’re positioning ourselves with strategic initiatives that will provide for strong revenue growth in the second half of the [financial] year, And obviously as the market grows the opportunities will become more and more significant for us and for our shareholders as well. We’re not discounting the possibilities of growing organically as well", Orgnoni said.

 

Another VR player?

The ASX, and arguably markets globally, are starved of the VR sector – or at least pure play stocks.

But one other ASX stock making forays is indoor entertainment venue operator Indoor Skydive (ASX:IDZ). Last month, it too went ballistic after announcing a standalone virtual reality themed venue.

The company already ran VR entertainment options at its two indoor skydiving venues using the brand name Freak Entertainment. But having a standalone venue clearly depicted it is serious about VR.

While Indoor Skydive has not responded to Stockhead’s requests for comment, it hinted this won’t be all.

The company signed an agreement with Westfield owner Scentre Group (ASX:SCG) for a 14-month pilot program intended to cumulate with further retail sites for Freak Entertainment to be established next year.

 

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