My predictions for virtual reality in 2021

Let’s be honest: no one made correct predictions for 2020. The global pandemic has changed the rules for everything, and the situation is so confusing and so rapidly evolving that any prediction for 2021 is completely unreliable, too. But hey, let me play this game anyway, so here you are my predictions for virtual reality in 2021 based on the trends and the anticipations that we had at the end of 2020!

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2021 won’t be the year of VR

I’m sorry guys (and gals), but I don’t think this year will be “the year of VR”. The year of VR is that mythological year when everyone will rush buying a VR headset and all households will have at least one VR setup. Every year since when I entered VR, someone says that “this will be the year of VR” and then of course this never happens. Well, let’s be honest, this won’t happen in 2021, either.

The reason is that the whole ecosystem is not ready yet:

• We have basically only one vendor that has some kind of mainstream appeal (Facebook) and the rest of the market is all focused on the enterprise. Facebook is strong, but carrying all the market on its shoulders is hard;
• VR technology is still in its infancy: the Quest 2 is great, but it’s still an uncomfortable shoebox in your face;
• VR is mostly either just games or enterprise applications, and it misses all the sets of utilities that have made the PC and smartphones so widespread (Word, E-mail, popular social media, etc…);
• People don’t understand the value provided by VR. When I make someone try VR, he/she always loves it immediately and starts thinking about buying a Quest. But before actually wearing a headset, he/she had no idea that VR was THAT cool. Maybe he/she had tried just a cardboard somewhen or just watched some Youtube videos about someone playing VR. But we all know that this is not enough: VR must be tried to be understood (and sold). So we would require many public demos about it… but well, there is a pandemic and so people can go out less, and even if they go out, it’s not safe wearing the headset that others have worn in a demo booth. This is an enormous problem for virtual reality;
• Even if people understood the value of VR, there is a terrible economic crisis ongoing and people have less money to buy an unnecessary gadget like a VR headset.

2020 has been a good year for the sales of VR devices: Half-Life Alyx and the launch of the Quest 2 have created a big spike in the sales of VR hardware and software. Quest and Index have been out of stock for many months and this shows how the market has grown a lot. Also, the awareness has grown, because every gamer knew about Alyx, and so about virtual reality. In fact, all the forecasts about VR are all positive, and watching a projection made by Road To VR, it is possible to see that VR adoption seems to be following a slightly exponential curve. I expect all these trends to continue in 2021, for a year that will see the growth of the technology on all its sides (software and hardware).

But, reading mainstream media, everyone was just talking about Among Us, The Last Of Us Part II, Fortnite, Roblox, etc… and not virtual reality. I can now see videos about VR also in meme websites like 9GAG, and this shows that VR has started entering mainstream consideration, but it is still far away from being the main topic of discussion. And in fact, some weeks ago Sony has made everyone understand that it has delayed the launch of the PSVR 2 because the market is not there yet. Regarding the utilities, the pandemic has boosted all social VR spaces, but what is the communication software everyone is talking about? Zoom, not VRChat or ENGAGE. So, it will take time for VR to become widespread. We’ll get there, but not this year.

So, when? In my humble opinion, we still need 1-2 years to make the real adoption to jumpstart, and 5-10 years to be in every household. Yes, it’s a lot of time, but these are realistic projections. From time to time, I like to look at the adoption graph of XR shown by John Riccitiello (the CEO of Unity) in 2017, where you can see that the real acceleration of immersive technologies should start around 2022-2023. Until now, this graph has been realistic during all the XR over-hyping and the depressions: it forecasted the winter of VR in 2017-2018, and the new growth in 2019-2020, so I keep trusting it and I think you should do that, too.

Summarizing, let’s all expect in 2021 an acceleration of the growth of VR, with new interesting content and new nice headsets released, and with many new people entering into the ecosystem, especially in an advanced country like the US. Let’s enjoy it without craving for a mainstream explosion that likely won’t happen yet.

The Quest will still be the king

The Oculus Quest 2 is selling incredibly well because it offers the right combination of affordable price, good hardware, and a good software ecosystem. It’s a great XR solution and it deserves the success it is having. Facebook has invested a lot of money for this headset, which is clearly sold under cost and with lots of paid exclusive content to make it appealing. I’ve heard a rumor about Facebook losing $50 for every headset sold, while a piece of official news stated some years ago that Oculus was investing $250M every year to fund content for its headsets. Not to mention the millions spent on marketing, especially in the US (Oculus was one of the sponsors of NBA, for instance).

The Quest 2 is a product to which is difficult to say no. That’s why Facebook could afford to add the so-much-hated mandatory Facebook login: it knew that people had no alternatives in the standalone market and were forced to accept it. Some people abandoned the ship, but the majority of them were forced to accept the new conditions, to not be cut-out from the VR device of the year. The sales have been incredible, and all the content creators I’ve spoken with talk about at least a 2x spike of sales of their products after the launch of this device.

I can see this trend going on all the year, and even go better: there will be always more games gaining millions on the Quest Store, and the launch of the new side content distribution platform by Facebook will let even more people be able to publish content for the Quest, enriching even more a marketplace that is already very rich.

I can’t imagine what company can steal Facebook’s thunder. Or better, I can imagine who can be the names and they are all the big monoliths: Google, Microsoft, Apple, Amazon, etc… Only companies of this size could afford selling a good headset under cost and at the same time attract enough developers to publish VR games on their own new stores. Because the problem, in my opinion, is not the hardware but the software. Using the Qualcomm XR2 reference design, it is quite easy for a manufacturer to create a clone of the Quest 2, maybe also a slightly better one. And a big company like Google could also afford to sell it at the same price as the Quest 2, hoping for a future domination of the VR ecosystem. But the problem would be attracting the developers to a new store with few initial users, and especially attracting users on a new store with no famous games and especially no Beat Saber, that being an exclusive title of Facebook, won’t be published on competitors’ standalone headsets.

It is basically the same problem is facing Huawei, which still develops amazing smartphones, but whose App Gallery store is not as rich as the Play Store and this scares possible purchasers; or the Epic Games Store that is investing many millions offering free games every month to make people go away from Steam, that is the leading store for games. It’s a very steep slope, and while I think it’s possible for a big company like Microsoft to walk it (well, they have challenged the domain of Sony PlayStation), it would require time to build such a new ecosystem, so I think that in 2021 the Quest will still be the most successful VR ecosystem. The only advantage that new entrants may have is that people don’t like Facebook: while everyone loves Steam and its good lord GabeN, no one likes Zuck and many people are scared about how their data is treated by Facebook. Competitors could leverage this when entering the market, but I think it’s not enough.

As I’ve told in another editorial (that caused more than a debate in the VR communities), the Quest is also slowly killing the PC VR market. The Quest 2 has caused a spike in VR users, and while a part of them also plays PC VR, most of them use it just in standalone mode. This means that the most profitable market at the moment is the Quest 2 Store and many developers are rushing developing games for Quest 2, not focusing anymore on PC. Even if a PC version of a game exists, it is not the primary mode anymore, and it is exactly just “a porting” to PC and not the original game in the mind of the developers. I think this trend will continue in 2021 and there will be an impoverishment of the PC VR gaming market, with fewer games, and anyway, games with inferior quality than PCVR is capable of. The only saviors for PCVR may be other mindblowing games like Half-Life: Alyx or the rise of PSVR2, which could bring back the attention of developers on high-quality visual VR content. But honestly, I don’t have many hopes for that for 2021.

Don’t misunderstand me: PCVR is not going to die in 2021 and I’m sure there will be some headsets released for PC, but they will be mostly dedicated to prosumers and enterprise customers.

So in 2021, the Quest will be like some famous soccer stars: everyone praises them for being always the ones to score, but no one notices that since they want always to be the ones to score, all the rest of the team plays worse. The Quest 2 is a shining star and everyone praises it, but its light is putting a shadow on many other parts of the XR ecosystem, and very few people are actually noticing it. And without clear competition, the XR ecosystem will be impoverished.

A final mention on the Quest 2 Pro: someone thinks that Oculus may release a premium version of the Quest this year, to better compete in the prosumer market. I’m personally not so much convinced, because I don’t think that Facebook is interested in the prosumers’ niche… but let’s see.

The rise of enterprise

As I said before, apart from other tech giants, no one is going to challenge Facebook on its own terrain: Pico, HTC, HP, Pareal, Skyworth, Shadow Creator… all these companies are going to try offering something different.

This something different usually starts from a different market: the casual gamer has been taken by Facebook, but there are many possibilities regarding prosumers and enterprise customers. Companies like Pico, HP, Valve, and HTC are already performing very well in this sector.

The PC VR market will be the leading one for the VR hard gamers, the ones that can afford to spend a lot of money to have amazing visual quality. There are still games, like Low-Fi and Lone Echo II, that will be released in 2021 and that will require a powerful PC with a great headset to be appreciated at their best. Prosumers will buy the Valve Index, the HP Reverb G2, and whatever other headset that will be released in 2021 to enjoy this kind of content.

Regarding the enterprise, Oculus has its own Oculus For Business program, and while it has improved a lot lately, it has still too many limitations when compared to what the competitors are offering. Facebook’s main goal is the consumer market, and now that the LBVR sector is in trouble because of the pandemic, it has even less interest in dominating the B2B sector. For this reason, I predict that all these headsets manufacturers will release enterprise-oriented VR headsets. Personally, I wouldn’t hold my breath for a Quest consumer competitor by Pico or HTC, but I imagine them to improve their enterprise offering in 2021 (and I imagine people complaining about the price because it’s higher than the one of the Quest 2). I also imagine them trying to add enterprise-oriented features like eye-tracking in all their devices.

I also envision XR startups like Varjo and XTAL releasing new versions of their headsets to stay always on top of the competition, but their price lowering. The line between professional and prosumer headsets will become always more blurred: it’s become unrealistic to propose a professional headset for $5000 when the HP Reverb G2 offers already great visuals and performances for $600. I also imagine interesting enterprise and prosumer oriented accessories (like haptic gloves) evolving and being more adopted by companies.

The enterprise XR market is growing and growing very well. As a consultant, until 2 years ago, I had many difficulties in finding something to work on for external companies, but now I get contacted every week for a potential VR project. Companies have understood that VR makes them spare time and money in training and prototyping; that XR can be a powerful marketing means; that XR can be used for gathering a team virtually, now that it is impossible to do that in real life; and so on. While in the consumer market, there are still very difficulties in making people understand the value of VR, in the enterprise market the need for VR is very clear. Furthermore, there are many grants for innovative XR projects and this again is fostering the adoption of VR in the enterprise sector.

The only true barriers to the fast adoption of XR in the enterprise are the technological limitations that are still present and the economic crisis that has hurt the R&D budget available to many companies. For the rest, I imagine a pretty big growth of XR in all big companies in 2021, with medium and small companies coming later.

All-in-two and pancake optics

An interesting trend that has begun 2 years ago in the XR ecosystem is the one of the all-in-two headsets: lightweight VR headsets, usually employing pancake lenses to be lighter, that work by being connected to the smartphone. The first company showcasing a similar design has been Huawei in 2019, and in 2020 Qualcomm has revealed a reference design for such smartphone-connected headsets (Qualcomm calls them “XR Viewers”), facilitating the birth of many new devices of this kind. HTC will probably the company trying to take the lead in the sector, considering that its EMEA General Manager Graham Wheeler has talked about the “rise of all-in-two VR devices in 2021”, something that sounds more like an announcement than a prediction. Considering that HTC has teased the Vive Proton one year ago, it may be that the Proton is an all-in-two headset and may be launched somewhen in 2021. But latest CES and WCVRI showed that Huawei and Panasonic are very active in the field, and they have already showcased 6DOF all-in-two glasses.

All-in-two headsets have many advantages: they are incredibly lightweight; they are cool to wear in public; they can be connected to 5G thanks to your phone; they can change the computational power by just letting you change the phone and not the whole headset. But they also have problems: they drain the battery of your phone (and this was one of the big problems of Gear VR); and especially, they have an annoying cable going from your pocket to your head.

Will they succeed? I guess we’ll discover this year, when probably HTC, Huawei, and maybe Panasonic will release their all-in-two devices. As always, it will be the market to decide. From my short experience with the Huawei glasses, I can tell you that the form factor of these glasses is incredibly interesting, and I would wear them without problems during a long journey by train. The comfort of these HMD is very hight, and the only problem for me was the limited FOV.

VR headsets will become MR ones

I think that all the new VR headsets in 2021 will have passthrough AR/MR functionalities. We all know that AR and VR will merge in a single glass sooner or later, and the trend of mixing the two technologies has already started more than one year ago. You all remember that in 2019 my team at New Technology Walkers launched a fitness mixed-reality game for the Vive Focus Plus, a headset that until then was considered only for virtual reality. We are proud to say that we were pioneers (and even released the opensource plugin to that), and now all the market is exactly chasing the same trend.

Facebook is going to release SDK APIs to create passthrough AR apps on the Quest; Lynx R-1 will launch being ready for passthrough AR and VR; Varjo already offers astonishing high-quality passthrough mixed reality with its Varjo XR series; Valve Index has a passthrough mode and using a WebXR trick it is possible to use it for AR; HTC has developed the very smart mixed-reality SRWorks SDK that works on Vive Pro and Cosmos and has teased a faceplate for the Cosmos to do mixed reality called Cosmos XR. All the major vendors are adding mixed reality features to their headsets, so expect all the most important headsets to be ready to offer some kind of primitive mixed reality in the short-term future.

I don’t expect it to be high-quality MR for the consumer headsets, but it will be enough to let developers start experimenting and create a new market around it.

PSVR2 won’t come, but…

Some weeks ago, PlayStation President and CEO Jim Ryan released this statement during an interview:

I think we’re more than a few minutes from the future of VR. PlayStation believes in VR. Sony believes in VR, and we definitely believe at some point in the future, VR will represent a meaningful component of interactive entertainment. Will it be this year? No. Will it be next year? No. But will it come at some stage? We believe that. And we’re very pleased with all the experience that we’ve gained with PlayStation VR, and we look forwarding to seeing where that takes us in the future.

Exactly as I said for HTC’s executive before, this statement sounds more like an announcement than a prediction. “Will it be next year? No.” sounds like a “We won’t release a next-generation VR headset in 2021″. This seems confirmed by the worlds of Blair Renaud, the developer of the game Low-Fi, that is working on a version of its game for “next-gen PSVR” that in an interview talked about some plans changed by Sony from what was told him before.

I’m almost sure that we won’t see the launch of PSVR2 in 2021. But I seriously think we’ll receive a teaser for a launch during 2022… maybe a rumor, a leak, a “one more thing” announcement… something like that.

VR will start being not only for games

In a recent interview on CNet, Andrew Bosworth, the boss of Facebook Reality Labs, has talked about the fact that Facebook doesn’t want to focus only on games for the future. Facebook knows that while games are cool and sell well, they can’t drive alone to “1 billion people in virtual reality” as Zuck dreams. Games are a very limited use case, and can’t attract people that have currently no interest in videogames.

That’s why Facebook has released Oculus Move, which helps people in doing fitness in VR. And is working on Facebook Horizon, which is a social space to connect people. And is going to release Infinite Office, a suite of productivity in mixed reality. Furthermore it is also pushing more on storytelling content (Facebook was a partner of the Venice VR Expanded that we did, for instance), events (Oculus Venues), and more.

As I said before, PC and smartphones haven’t become so popular and widespread because of games, but because they let us connect with the people around us (Whatsapp, Facebook, e-mails, etc…) and they let us be productive (Word, Powerpoint, etc…). Facebook knows this and now that the Quest has become a popular gaming device, it wants to expand its functionalities byond it. So I expect that in 2021, we’ll see Facebook trying to move the attention on VR from gaming only to a more complete suite of tools, that will include games.

There will be at least another big game

This year has been fantastic for VR gaming: Half-Life: Alyx has disrupted the market, but also titles like The Walking Dead Saint And Sinners and Star Wars Squadrons have been very successful and led new people to join VR.

I expect this trend to continue: the VR market is growing always more, and this is attracting always more game studios to publish always more ambitious games on the stores. This attracts more users, that will attract more game studios, for a virtuous circle. So for 2021, I can only predict great games coming: we already know some, like Low-Fi, Lone Echo II, Hitman 3, Sam & Max This Time Is Virtual, The Climb 2, and so on. But I still hope for a surprise, a big bang, like may be the Assassin’s Creed VR game that Ubisoft is making together with Facebook, something that can make VR to spike like Alyx did.

As a VR developer, I can only say that I’m very happy about this trend, especially because this means that more game studios will be able to survive (and thrive) by just developing VR games.

Virtual events wiill gain more importance

You know that I work in the virtual events field and that we of VRrOOm had very successful VR events like the concert of Jean-Michel Jarre for the end of the year (that had 75M views!) or Venice VR expanded. Also, other companies have done very well, like Engage that has hosted the main HTC Vive Events; Sansar has had many visitors for its Glastonbury festival; and so on.

Due to the pandemic, VR events have become a necessity for all those entities that can’t organize a physical event anymore. And given the projects we are already working on and the ones we are discussing, I can guarantee you that this sector is growing always more. Also, the new work of Sony and Verizon for a super-high-quality virtual concert of Madison Beer shows that the sector has become so profitable that even AAA Studios want to enter it.

So, this trend is exploding in 2021 and you can expect always more events of this kind happening, and also expect them to have an always higher quality. The question will be what will happen in 2022 when hopefully this pandemic will end thanks to the vaccines: will people want to continue doing virtual events? I think that these virtual events have proven to be very valuable even as companions of physical events because they can attract people from all over the world… but I guess I will be able to tell you more in next year’s predictions post!

OpenXR will finally be implemented

I was afraid that OpenXR could become an abandoned standard like Virtualink, but actually, in 2020 all the major brands have started adopting it, from Valve to Microsoft, not to mention Facebook. This is an amazing piece of news: in 2021 all the brands could finalize their beta implementation of the standard, and Unity could also finally implement it into its game engine. This means that 2021 could be the year when the far west of VR will start to end, with programs slowing becoming build-once-deploy-everywhere. This could be an amazing piece of news for all of us game developers because we could spare a lot of time that we currently spend to guarantee the cross-platform compatibility of our experiences. Also, this can help new accessories, SDKs, middleware to proliferate, for a richer XR ecosystem. I’m really happy with what OpenXR can bring to us, and I expect to understand its real outcomes this year.

WebVR will struggle

I was a believer in WebVR and I still think it is a very promising technology: the ability to enjoy a virtual reality experience by just following a link on whatever device you are on is disruptive for the usability of frictionless VR. But let’s be honest: WebVR is in a very critical moment and most probably it won’t be a major platform in 2021.

In the last months, we had the shut down of very important WebXR projects like the Supermedium browser and the halt of all projects where Mozilla foundation was involved. Mozilla Hubs, the open-source shared metaverse, is still alive but its roadmap appears to be very confused after the layoffs.

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I’ve tried yesterday to look for new WebVR experiences online and I mostly found only 360° videos, some old experiences no more compatible with the new Chrome, and some new experiences of very mediocre quality. We have to look in our eyes and admit that until now, WebVR has failed.

I don’t think 2021 will be the year of WebVR, but I really hope that in 2021 some companies like Mozilla will start investing more time in the technology, creating the infrastructure for the metaverse of the future.

5G will be the future, but not the present

2021 will be the year that in Italy we’ll have the first most serious rollout of 5G in the biggest cities. The technology is coming, the problem is understanding what we can do with it. 

There are publicly no announcements about 5G VR headsets for 2021, even if Qualcomm told me they are coming exactly this year. It is not clear though if it is talking about standalone 5G headsets or all-in-two devices that exploit the 5G connection of the phone.

I envision that in 2021, 5G will be mostly used for research projects and for showcase demos made by telcos and headset manufacturers. For real useful applications, maybe we’ll have to wait at least until the end of this year, if not 2022.

Many of you are waiting for 5G to finally be able to use Cloud Rendering, and so have very lightweight headsets that just show on the screen a complex scene that has been rendered on the cloud. I have tried it with the NVIDIA CloudXR SDK and let me tell you that when it works, it is like black magic. Imagine having Virtual Desktop, but with the rendering performed by a remote service… this is the power offered by 5G. The technology is already there, and NVIDIA is so confident about it that now it is possible to have AWS machines already offering the rendering made with CloudXR. 

The problem is in the network: to have the amazing performances that I experienced, you must have an edge server very close to where you are, plus a stable connection that is not cluttered with too many users. And this should happen wherever you are. At the moment, actually, cloud rendering only works in the lab and in some ideal conditions in some zones of big cities, but before it becomes a real possibility for everyone, we still need some time for telcos and cloud providers to create the infrastructure to make it possible. I think this won’t happen in 2021.

LBEVR will have its share of problems

2020 has been a terrible year for Location Based Entertainment in Virtual Reality: the pandemic has forced people to stay at home, and even if people could go out of home, they for sure were afraid to wear a headset that had been used by other people. For these reasons, many LBE venues have been forced to close because of too few visitors and high expenses. The Void and Sandbox, two of the most famous franchises, have gone bankrupts.

I think that 2021 will continue to have this bad trend because of the pandemic and the lockdown, but I don’t think it will be the year of the death of LBEVR. The main expert of the sector, Kevin Williams, has demonstrated with market data from this year, that as soon as the lockdown restriction lifted, LBVR venues have returned to a visitors’ level that is comparable to the one that was pre-covid. People still want to have fun outside with friends, is just that they can not. So for this year, I predict a troubled year for LBEVR, hoping for a reborn of the sector in 2022. And I predict a great year instead for Cleanbox and all other startups focused on the sanitization of VR headsets in public places.

China will try to change gear

China is currently the biggest AR/VR market and the country where almost all AR/VR headsets are manufactured. We know that China has a great 5G and AI knowledge (see what Huawei has been able to do), and it has always indicated also XR as a strategic technology. Not long ago, the government stated that it wanted the Country to lead the VR ecosystem by 2025, and now we are at the beginning of a new 5-year development plan, where, according to rumors, there will be a clear indication of a push on immersive technologies.

The plan is not public yet, so we don’t know exactly what to expect. For now, I think that China, as my friends at YivianXR said in a long post months ago, should foster the development of a consumer VR market. Here in the West, thanks to the Oculus Quest, we have many people that are buying a VR headset to play games, while in China, according to IDC, 70% of sold VR headsets are for the enterprise. There is not in China a product similar to the Quest, affordable and with much compelling content, and in my opinion, the government should work on it to push the internal demand. It could exploit the technological expertise of Huawei, HTC, Pico together with software giants like Tencent (that has a big studio of its own and owns a big percentage of Epic Games) to create such a platform. If this happened, we may have the birth of a new enormous consumer VR market with billions of potential users, that could change all the cards on the table of the VR ecosystem.

I wonder if this is what is going to happen… let’s all keep an eye on what the Government will announce soon. For now, I predict for 2021 a bigger spending on AR/VR, especially for what concerns education and training, and the birth of many AR/VR headsets made in China.

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And that’s it for my predictions of VR in 2021! Of course, this is just a speculation game, and everything that I said may happen or may prove to be completely wrong. As I told you, it is very difficult to make predictions in these uncertain times… and I’m terrible at making predictions in general 😀

What are your predictions for Virtual Reality in 2021, instead? I’m very curious, so let me know in the comments of this post (here or on the social media).