Oculus Has Plans For Augmented Reality

While their first consumer “Rift” virtual reality (VR) headsets are now shipping, at the recent San Jose Comic Con, there were hints the company has plans beyond VR. Oculus (owned by Facebook) founder and CEO Palmer Luckey hinted that the company will eventually include augmented reality (AR). Mr. Luckey was on a panel that included Silicon Valley icon Steve Wozniak and was hosted by Re/Code founder and executive editor Kara Swisher. During the hour-long session that also included audience questions, Ms. Swisher dug into the opportunities and problems of virtual reality and augmented reality. Mr. Wozniak’s role was mostly as a tech enthusiast and cheer leader and he was very enthusiastic for virtual and augmented reality.

Ms. Swisher was more skeptical of virtual-reality because she is concerned with the already bad habit of people burying their heads into their smartphone. She thought that VR takes technology self-absorption to another “quantum level of involvement in their devices.” Mr. Luckey countered that people eventually will be wearing devices that will mix overlays and virtual worlds and will allow wearers to seamlessly switch between the two using with the same basic hardware. Ms. Swisher talked enthusiastically about Google glass as an augmented reality experiment that had potential, but didn't go well. And Mr. Wozniak agreed it was exciting that we can get the sensors that could provide real-time information while walking around. He specifically would love to have the option of having the camera on Google Glass recognize people and provide him with information of whom the people are, their background, when he met them last, etc., because he suffers from an inability to recognize people's faces, a condition called Prosopagnosia (also called face blindness). A real-time face recognition AR device would be helpful for Mr. Wozniak and others with the same condition. Mr. Luckey, on the other hand, dismissively called Google Glass merely a heads-up display and not an augmented reality display. This is a classification that Tirias Research agrees with – see our Forbes article.

Games Will Drive VR – For Now

Mr. Luckey believes that it's the game industry that is on the leading edge of driving the creation of virtual-reality content even if the content isn't exactly a game-because game engines are adept at creating real time, stereoscopic environments needed for virtual-reality. The content creators are still in the very experimental stage at this point in time and building VR content is non-trivial, as was explored at SXSW AR/VR track. By focusing largely on games initially, VR is going after the existing customer base of high-performance PC gamers who already have the necessary hardware for the Oculus Rift. There will also be some people who will buy new PCs just for VR experience, but that will be a much smaller group. While VR can be used for many different applications beyond gaming including health training, travel, etc., Mr. Luckey was most excited about virtual tele-presence, where “you could have people coexisting in virtual space.” Advanced tele-presence would eliminate the need for travel and could potentially even replace conferences such as Comic Con. Mr. Wozniak was excitement about VR for use in education where students can experience different parts of the world without the expense of traveling.

Mr. Luckey was, of course, the number one cheer leader for VR on stage, but while he did not disagree with Wozniak’s enthusiasm for AR, he did say that AR (and by extension mixed reality) is a more difficult problem to solve. In the short term, most of the hardware and content development will be focus on VR, not AR. A position TIRIAS Research believes is true.

Later, during the audience Q&A part, an audience member followed up on the initial augmented reality question from Ms. Swisher and asked whether Mr. Luckey's company, Oculus, would be left behind when the transition to AR occurred. While citing the problem that there might be reporters in the audience and he has to be careful with what he said as CEO of Oculus, Mr. Luckey did respond that “I see us (Oculus) on the leading edge of that (AR).” He said AR and VR on the same continuum and “will eventually merge in weirder and newer and cooler ways,” and when AR gets to the point to where VR is today, “I think we (Oculus) will be in a good place.” We (Tirias Research) believe the ultimate AR/VR device will be an eye overlay, like an active contact lens or a frame that projects light directly onto the retina, either of which can overlay images onto part or all of our field of vision, combined with camera sensors to scan the local environment and extremely power efficient processors to merge all the elements. That device is still likely a decade away.

While Mr. Luckey did say that other companies will have good technologies in AR as well, he didn't point out any specific vendors like Microsoft or Magic Leap (a company funded by Alibaba, Google, and others for almost $1.4B). While much of the technology that Oculus developed for VR will apply to augmented reality, including head tracking and spatial positioning, AR is going to require a different display technology that overlays images in from of the eyes while still maintaining transparency of the background. Additionally, with mixed reality (MR) the virtual objects interact with real-life physical objects and will require more sophisticated spatial scanning technology such as the sensor technology Microsoft implemented in HoloLens. It could be possible for Oculus to license or jointly develop AR technology with partners such as they did with Samsung for the GearVR headset. Microsoft or Intel with its RealSense 3D camera tracking software and hardware could be potential partners.

There’s a connection between AR and VR that dates back to the origins of Ivan Sutherland’s labs in 1968 and “The Sword of Damocles” developed at University of Utah. After that, each has taken a different path and today the siblings are often competing with each other for developer and media attention. Even with the launch this week of Microsoft’s HoloLens AR glasses, VR is more affordable for consumers and commercial applications. The Microsoft’s product, at $3,000, is squarely targeted at businesses with a more limited distribution. As Lucky Luckey attested, they are both part of a continuum that will eventually merge – but until that time occurs, VR has the center stage.

The author and members of the TIRIAS Research staff do not hold equity positions in any of the companies mentioned. TIRIAS Research tracks and consults for companies throughout the electronics ecosystem from semiconductors to systems and sensors to the cloud.

Updated to correct Palmer Luckey's name.

Updated to correct Magic Leap funding. Google lead the Series B investment (of $542 million) and participated in the Series C funding (of $793.5 million, led by Alibaba), total funding to date is nearly $1.39 billion.