VR and simulation concept. Courtesy: Who is Danny/Shutterstock.com

 

In six years, augmented reality (AR) and virtual reality (VR) technologies will be as ubiquitous as mobile devices in the consumer market. Seem impossible? Well, more than 80 percent of respondents in a recent Perkins Coie and XR Association survey disagree.

The “2019 Augmented Reality and Virtual Reality Survey” found that AR and VR technologies are on the rise, both in terms of investment and market growth. Two hundred respondents were polled in the survey, of which 68 percent were executives in an established technology company and an additional 18 percent were founders or executives of start-up AR or VR companies.

The survey found that 39 percent strongly agreed with the statement that AR and VR technologies will be as ubiquitous as mobile devices, while 47 agreed. Only seven percent of respondents disagreed.

Right now, the gaming industry looks to be the primary area of growth for these technologies—61 percent of respondents picked it as one of the three industries where AR/VR is most applicable at this time, while 54 percent saw it as an area of highest investment. Much of the focus seems to be in North America as well, with 62 percent saying the region holds the most investment promise for AR/VR technologies.

None of this was particularly surprising, said Kirk Soderquist, who worked on the report and is co-chair of Perkins Coie's Interactive Entertainment practice. However, he did note how the survey showed AR and VR's growth outside of gaming: “There is a lot of talk and apparent attention around the application of AR/VR for workforce application, healthcare, eCommerce, etc., and the survey is some empirical evidence of what we are observing in the marketplace.”

He also added that if anything surprised him in the survey, it was the level of increased investment activity, particularly in later funding rounds. Total investment in the space grew from more than $2.5 billion in 2017 to $3.8 billion in 2018, according to the survey, and although there were fewer investment deals overall, 14 percent of deals in both the North America and APAC regions were for more than $100 million.

“This is both good news because it looked like investment in past years was slowing and concentrated on a few bigger players, and the investment in later rounds means the industry and technology is maturing,” Soderquist explained.

These technologies, though, do not come without legal risks. In 2019, 61 percent said that consumer privacy and data security were a primary legal risk with AR/VR technologies, up from 44 percent in last year's version of the survey. Soderquist pointed to new regulations like the GDPR and the CCPA as an impetus for many of these tech companies to beef up their privacy and security focus, adding that these aren't risks unique to AR and VR technologies.

“First, companies more and more appreciate that data is an important asset—no surprise there. Second, there is so much attention around privacy lately due to the need to comply with the GDPR and the upcoming CCPA. Every company with data and multi-jurisdictional reach are working toward GDPR compliance and CCPA compliance, and there will be more states to follow California. Third, there continue to be a number of data security issues in the news—again, across any number of industries,” he noted.

One area that not as many survey respondents were focused on, though, was intellectual property. Just 32 percent said difficulty in licensing technology and IP was a concern, while only 30 percent marked potential infringement of third-party owned IP as a concern. This was despite trademark and copyright disputes being noted as the most likely driver of disputes and litigation, at 56 percent of respondents.

But there are a couple of reasons for this disparity, in Soderquist's view. “First, the industry is still pretty young and I think folks are focused on development and not IP enforcement. Companies may be seeking IP protection but aren't really using it offensively yet. We may yet see more enforcement like we ultimately saw in the wireless space.”

“Second, maybe there is more collaboration,” he added. “A lot of companies are looking for, supporting, AR/VR adoption. It's more about finding ways to lift the entire industry, looking for ways to work across platforms, etc.”

Still, even with the legal risks, AR and VR technologies continue to proliferate. In 2019 and 2020, Soderquist explained, several major platform and device manufacturers are launching new products as the industry continues to explore and react to consumer needs.

“AR/VR is such an exciting industry because it's providing totally new experiences for consumers, and with that comes a natural period for consumers to learn more about the tech,” he added. “Most of the industry sees this as an opportunity, not a barrier.”