VR and AR are back. This time, they might mean business.

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If you were to compile a list of the most overhyped technologies of all time, virtual reality would be at the top. People have been banging on about it for decades, but the reality has been about strapping a dustbin to your head and bumping into things until you feel sick. However, a wave of new technologies and serious investment means that VR and AR are back - and this time they really do mean business.

VR and AR: what’s the difference?

It’s important to clarify what we mean by VR and AR. Virtual Reality replaces reality, so for example you might wear a VR headset and be transported to a faraway country or enjoy a realistic simulation of something that isn’t there. Augmented Reality overlays virtual items on the real world, with blueprints floating in the air when you fix a machine or a patient’s vital stats appearing in a surgeon’s field of vision while he or she performs a procedure. If the AR headset also includes a camera, it can be used to stream whatever the user is looking at for others to see live or later.

VR and AR: who’s doing what

Some of technology’s biggest names are experimenting with VR, AR or both. Google and Microsoft have AR products in the form of Google Glass and Microsoft HoloLens, while Facebook, Sony, PC gaming giant Valve and smartphone firm HTC are all planning to ship VR products next year. Some, such as Sony’s Project Morpheus and the Valve/HTC collaboration, are aimed primarily at the home entertainment market. But others have more interesting ambitions.

Google Glass and Windows Holographic: when AR means business

After a flurry of early excitement Google has gone back to the drawing board to improve Glass, and we’d expect the 2016 edition to be less ugly and to benefit from the improvements in battery life, camera technology and wearable computing that have occurred since the original Glass was launched. The price should drop too: while early Glass headsets cost more than $1,000, the goal was always to make Glass very cheap and become a mass market device.

There are lots of applications for augmented reality. Virgin Atlantic has used AR headsets for airline check-in staff, enabling them to see passengers’ details and other relevant data without having to consult paperwork or PCs. Microsoft has been working with NASA to display scenes from Mars on whatever you happen to be near. And both firms have been working with medical firms to create some very interesting AR experiences.

Take Google, for example. Medical apps for Google Glass include apps that enable virtual dictation of patient notes; videoconferencing between doctors and patients; projection of vital signs in front of surgeons’ eyes while they operate; displaying MRIs and X-rays during procedures; recording operations for analysis and training; and displaying patient data to doctors as they do their rounds.

It isn’t hard to imagine similar apps for different kinds of work. You could use AR to display blueprints or schematics while engineers repair machinery, or to view the cables that lie beyond a wall or floor to builders or electricians. There are applications in the hospitality industry and in security, in law enforcement and in logistics, in construction and in translation.

HoloLens: is Windows’ future virtual?

Maybe that’s why some of tech’s biggest names are concentrating on virtual reality instead.

Microsoft’s HoloLens takes a similar approach to Google but the hardware is different: where Glass looks like an odd pair of spectacles, HoloLens is more like a ski visor. It’ll cost more than a console - so that’s £400-plus - and it’s clearly aimed for indoor use, where you won’t feel quite so silly wearing it.

So far Microsoft’s vision has included remotely controlling robots, displaying virtual models of product designs, turning any wall into a massive flat-screen television, learning how to perform medical procedures, discovering Minecraft worlds in your living room, visualising data, and designing 3D objects for printing via a 3D printer. Current partners include Autodesk, NASA and Disney.

Microsoft’s demos look great, but we’ve been here before with Project Natal, the sensor that would become the motion-sensing Kinect. Natal’s promo videos made it seem like the most exciting technology ever created, but the reality involved us shouting “Xbox! Xbox! Xbox!” and waving our arms about to no avail.

Microsoft has learned from that, we think, and it’s telling tech reporters that while it’s excited about HoloLens and the Windows Holographic software to make it work, it has absolutely no idea whether this is the future or a technological cul-de-sac.

VR: it’s back (again)

Facebook isn’t the only firm with VR ambitions. PC gaming giant Valve has created Source VR, which again is due for an early 2016 release in conjunction with hardware partner HTC - although Valve’s awful track record in hitting hardware release deadlines suggests that you should take the release date with a pinch of salt. Valve’s platform is designed mainly for PC-based video gaming, much like Sony’s Project Morpheus: that’s a VR headset designed to connect to its PlayStation 4, again primarily for gaming. So far we don’t have prices for any of these devices but we don’t expect them to be particularly cheap.

Virtual reality gaming has been around since the Nintendo Virtual Boy of the 1990s, but every VR technology has suffered from three key problems. First, the hardware wasn’t good enough. Secondly, the content wasn’t much cop. And thirdly, usually because of the first point, virtual reality made people very, very sick.

That changed with the Oculus Rift, a virtual reality system that started life as a Kickstarter project and has since been bought by Facebook for a cool $2 billion. The renamed Oculus VR headset is comfortable, doesn’t make people throw up and delivers a truly immersive virtual reality experience.

Oculus is great with games, but Facebook has bigger ambitions: it hopes that any kind of interaction we do online, we’ll do in VR. It hopes we’ll use VR for gaming and for films, for overcoming phobias and for visiting places we can’t travel to, for meeting pals we can’t meet in person and for exploring real and virtual worlds, and no doubt it plans to plaster adverts on as many virtual surfaces as it can. The headset will ship in the first quarter of 2016.

VR vs AR: is it time to take them seriously?

We suspect that over the next two years or so, AR and VR will remain the preserve of early adopters with money to spend: sectors such as healthcare for the former and gamers for the latter. Over time we should see the same virtuous circle that fuelled the smartphone boom: better hardware, falling prices and must-have apps driving both sales and innovation. You don’t have to take AR and VR seriously today, but it does look like the technologies are about to start delivering the things they’ve promised for so long.

Yes and no. Whether it’s Google Glass or Facebook’s Oculus, what we’re seeing here is like a trailer rather than the main feature. The potential is obvious, but without a killer combination of affordable, comfortable hardware and the content to justify investing in it then VR and AR are gimmicky rather than great leaps forward. AR also faces competition from other forms of wearable computing such as smart watches: some information works just as well displayed on a wrist as it does projected in front of your eye, and doesn’t look quite as odd either.