The document discusses the future of virtual, augmented, and mixed reality (VAMR) in the gaming industry. It outlines that 2016 was a tipping point where the first killer VR app, Pokemon Go, launched and over $2 billion was invested in AR/VR startups. It also discusses the growth in VR headset sales in 2016 and forecasts that the number of VR users will grow exponentially by 2020, with AR revenue estimated at $90 billion compared to $30 billion for VR. Barriers like high costs, limited content, and technical issues need to be addressed for further adoption. Future technologies will enhance the VR experience while social and mobile applications are expected to expand the user base to over 1 billion by 2020 and establish

1. VAMR ERA(Future of VR in gaming industry)

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RESEARCH
PRODUCTS
TECHNOLOGY
DEVELOPMENT
BUSINESS
NEEDS
DESIGN
R&D Department

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virtual augmented mixedAugmentedVirtual Mixed
VAMR

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2016 Tipping Point – First killer app
First killer App – Pokemon Go with $850 revenue and 0,5 B user base

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$2.3 BILLION
INVESTED
AR HMD
Solutions/
Services
Video
VR HMD
Peripherals
Games
Applications
Adtg/Mktg
Tech Distribution
Source: Digi-Capital
2016 Tipping Point – Fundraising
Start-up Investments were
increased
Facebook – $3B investment
First record – Magic Leap has raised
nearly $1.4 billion in venture capital
Magic Leap $800M investment –
reportedly the largest C round in
history

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2016 Tipping Point – VR HMD
First gadgets available to wider audience –
Samsung, Google, Oculus (Facebook), HTC and Sony

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2016 Tipping Point – VR Headsets Sold in 2016
Source SuperData research
Oculus Rift
HTC Vlve
PlayStation VR
Samsung Gear VR
HTC Google Daydream VR
Google CardBoard
0.24M
0.42M
0.75M
4.51M
0.26M
84M

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2016 Tipping Point – Target Audience
Source SuperData research
Share of virtual reality users worldwide by type of device in 2016
PC Console Mobile
ShareofVRusers

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2016 Tipping Point – First platforms
User Base ~ 1.4 B
Compatible with -
Cardboard, Gear VR, etc.
User Base ~ 1 B
Compatible with –
Oculus?
User Base ~ 13 M DAU
Compatible with - Oculus,
HTC Vive, any VR headset
for desktop
User Base ~ 40 k
Compatible with –
Oculus Rift, Oculus Gear
What should we expect??? User Base – N/A
Compatible with - Oculus,
HTC Vive, any VR headset
for desktop

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Target Audience - Forecast
Yes
16%
Are you planning to buy VR products in the next 6 month*
Don’t Know No
Unaware of
VR
39% 41% 3%
13% 37% 45% 5%
12% 30% 51% 6%
11% 42% 40% 7%
11% 47% 37% 6%
10% 26% 56% 8%
10% 29% 53% 8%
7% 27% 55% 10%
7% 26% 57% 9%
7% 21% 59% 14%
5% 22% 59% 15%
4% 21% 62% 12%
SPAIN
NETHERLANDS
ITALY
US
POLAND
RUSSIA
UK
FRANCE
GERMANY
CANADA
SWEDEN
BELGIUM

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Target Audience – Total
Innovators
Early
Adopters
Early
Majority Late
Majority
Laggards
VR has only around 1% market share of the gaming market
16%34%34%13.5%2.5%
1%

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Target Audience - VR User
Source SuperData research

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Bottlenecks - UX (User Experience)
Expensive devices - HTC Vive ~
$800 Amazon, $1200 ~ Ukraine
Area restrictions
Installation complexity
Poor support system

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Bottlenecks - UX (User Experience)
Low quality and amount of the
content
Huge amount of the additional
tools to be bought for full VR
involvement
Short sessions in connection
with the state of health

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Bottlenecks - Technical Issues
Rendering of a light field and
cross-linking of textures
High system requirements
Limitations for mobile devices
The current resolution of VR
helmets is 2-2.5k (1-1.25k per
eye), should be at least 4k, the
best - 8k

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Bottlenecks - Technical Issues
Spatial sound
VR is about immersion and any
optimization, UI/UX, graphic
issue is really valuable for user
New UX creation (e.g. teleport
system). Old won't work well in
VR environment

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Next Steps - Technologies
On the way, a whole series of new technologies designed to significantly enhance
the effectiveness and freedom of expression in the VR
VR HMDs with trekking system expected from Intel, Oculus, Lenovo, HP, Dell, Asus,
Acer, etc.
Engines
Standards,APIs
SharedVRexperiences
WebVR standard that will change our www experience (can show 3D graphics in
the stereo format)

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Next Steps - Content
More than 10,000 VR
high-quality applications
will be available to the
user in 2017
We will see top game
development
companies and top titles
in the VR industry

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Next Steps - Social
Facebook will introduce a product that adapts its social network to VR helmets
(most likely it will be client of the social network for Daydream)
Social VR services and multi-user virtual universes will be provided
(AltSpaceVR, vTime, VRChat, Sansar, High Fidelity)

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Next Steps - Users
Mobile VR
1B users from 3B existing
smartphone users
PC/Console
(WebVR PC and Mobile)
Browser
2B (Chrome) + 1.3 (Firefox,
Opera, Safari or Edge)
(WebVR PC and Mobile)
Social
1B Facebook
1.8B users
The number of virtual reality users will grow exponentially

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2020F - AR/VR Leaders Forecast
The defined leaders
of the industry

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2020F - Return of investments
MR Era
VR
Hardware
AUGMENTED
REALITY
$90B
AR Theme Park
Source: Digi-Capital
aCommerce
AR Data
AR Video
Enterprice
AR
AR Games
AR Ad spend
AR Consumer
VIRTUAL
REALITY
$30B
VR Games
VR Video
VR Theme
Park
VR Apps (ex
entertainment)
AR
Hardware
VR Revenue share ~ $30B
AR Revenue share ~ $90B

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2020F - AR/VR Formed Ecosystem
AR HMD
Video
Source: tipatat@thevrfund.com
Application/
Content
Tools/Platform
Infrastructure
Location Based
Sport/
Live Events Games Entertainment Enterprise Healthcare Education
Distribution (Apps/Media) Reality Capture (360 Video/Next Gen)3D Tools (Engines/Audio)
Input (Hand/Eye/Wearable/Omni Treadmills/Haptics)HMD (Tethered/Mobile)
Social

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2020F - VAMR Era

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Thank you!
Maxim Illyashenko
Engineering Director,
Head of Delivery - Gaming BU, Innovecs
m.Illyashenko
maxim.illyasheko@innovecs.com
https://www.linkedin.com/in/maxim-
illyashenko-464b9545/
https://www.facebook.com/m.illyashenko