VR Needs A Killer App

Without a killer app, the magic box is empty.

There are fewer than five million people using VR headsets in order to experience more immersive games, 360 videos, as well as traditional movies and television. It’s sexy as hell, has that new technology smell, and it looks good on TV too. However, The Oculus Rift, HTC Vive, and PlaystationVR, which dominate the market and the news, are strictly for first adopters. It falls to the humble smartphone to bring VR to the rest of us.

A commercial for the Samsung Gear, powered by Oculus.
As low as $66.94 at Wal-Mart. All it needs is a killer app and a better frame rate.

Most of us will first experience VR using a mobile accessory like the ultra cheap Google Cardboard ($2.95 on eBay). The more substantial mobile headsets, Samsung’s Gear VR (developed with Oculus) and the newly introduced Google Daydream, are less than $100 (if you’ve got a compatible phone), but frame rates are low (this can cause motion sickness) and the apps are underwhelming. Patrick Givens, Director of Smart Innovations at digital agency VaynerMedia told me he brought his Google Daydream to his family Thanksgiving. “Everyone smiled as they tried it,” he reported, “but within thirty minutes, it was on the shelf.” According to Givens, the reason is simple: “There’s not enough content”.

Online services took off in the nineties when email at home became a “must have”. It took the telephone and then the television twenty-five years to penetrate all US households. Online computing took five years. Yes, five. In 1995, only sixteen million people were using a personal computer to access the Internet. In 2000, it was 350 million. In perhaps the biggest example of the network effect in history, everyone (including Mom!) went online at the same time to get access to email and other killer apps like instant messaging (remember that?), photos, music, and mapping. Communications apps were also the first killer apps on the smart phone. There is as yet no comparable VR offering that will make everyone have to have it and trigger the network effect.

Exploring a virtual world via online service Prodigy. This is what first adopters looked like twenty-five years ago. And there was not enough content, but it had a killer app: email.

Adam Mason, a bullish VR evangelist and Oculus Rift owner with UK digital marketing firm Datify, told me he thinks “VR and AR will supplant computers and even mobile phones in five years”. Game on. Microsoft says its Hololens will replace the monitor. Mixed reality start up Magic Leap has raised over a billion dollars. Facebook is putting billions behind the Rift, and through its relationship with Samsung it’s wisely playing both the high and low ends of the market. Games will be the most lucrative category at first, but killer apps are what will make everyone have to have it. Without the killer app, the Daydream and the GearVR are best used for watching movies on airplanes. Without the killer app, the magic box is empty.

The story of the $1.3B mixed reality (MR) start up Magic Leap
suggests Adam may be on the money.