The Future of Extended Reality

Are you curious about the future of Extended Reality? 

The Future of Extended Reality strategic foresight project was created February 2021 as part of the University of Houston, Professional Certificate in Foresight. Contributors: Eli Burke, Dr. Jacqueline Conway, Lisa Courtade, Kelly Evans, Dr. Sarah Skidmore, and Lucien Wobembong

Let’s explore the future of extended reality from a consumer’s perspective. How might the use of extended reality technologies impact a consumer’s daily life – how they play, shop, travel, maintain wellness, and more. What implications may arise around consumer habits and product demands? If you are you a leader of an organization or simply curious about the future of extended reality, then this research is for you!

Ready to explore augmented reality, virtual reality, and machine learning

In the next 10 years, Extended reality could impact every aspect of life

  • Entertainment – enable audiences from anywhere to see movies, concerts, cultural venues
  • Tourism – armchair travel, pre-experience before you buy
  • Retail – enhanced experiences in store + ecommerce
  • Medical, Health and Fitness – telehealth, mental health, outpatient
  • Education and Training – upskilling, reskilling, immersive learning
  • Manufacturers – HP, Sony HTC, Oculus, Google Apple
  • Real Estate and Construction – “live” in the property before buying/building
  • Providers and Platforms- – Qualcomm, Verizon, Tiktok, Google, Apple, Microsoft

In recent years, we’ve seen technology advances into consumer life from the… 

  • 2010 Google releases 3D mode for street view
  • 2014 Operation where a surgeon controls a robotic arm 
  • 2016 Pokémon Go mobile game
  • 2019 Brands accepting the California Consumer Privacy Act, or CCPA
  • 2020 Rise of covid-19 drives digital content consumption

key drivers of change pushing consumers into extended reality

Driver 1 – Increasing demand within the tech industry

As Facebook, Google, Lenovo and other companies release devices, we are seeing an increasing demand and funding for XR content

Explore the driver:

  • SteamVR seeing record number of new users, revenue and playtime
  • Small and large companies are getting more funding

Driver 2 – Expanding 5G Capabilities

5G technology allows for increased speed and responsiveness from networks to consumers.

Explore the driver:

  • Super-fast mobile networks will further boost the potential of XR to strengthen its presence
  • Advantages of 5G and IoT
  • The potential for data transfer speeds of 5G should be fast enough to stream VR and AR data from the cloud. Rather than needing to be wired up to powerful PCs, or encumbered by on-board hardware

Driver 3 – Growing commitment to DEI

There is a growing commitment to foster greater diversity, inclusion, and equity within tech companies, tech creators, and tech use cases.

Explore the driver:

  • Apple Chief Executive Officer Tim Cook launched a $100 million Racial Equity and Justice Initiative
  • The homogeneity of the industry isn’t just a superficial issue 
  • Use of VR in the treatment of conditions

Driver 4 – Increase in social media use

Consumers are looking for technology-enhanced ways to connect.

Explore the driver:

  • Facebook unable to keep up demand with demand for Oculus headsets
  • Facebook has detailed its latest development in VR
  • Google acquired AR glasses maker
  • Facebook introduces hand-tracking technology 

Driver 5 – Rise of digital natives

Younger generations are growing up with technology and appreciate tech-driven advancements.

Explore the driver:

  • Those growing up with extensive exposure to technology will be more “tech savvy”
  • AR is being incorporated in various aspects of their life
  • Transition from one technology to another is easier
  • Digital natives will be more culturally inclusive and intellectually curious

Driver 6 – Normalization of ‘remote living’

Digital transformation, merely accelerated by COVID, shifts norms of how and where people life, work, and consume. 

Explore the driver:

  • Study finds telehealth visits vastly preferred by patients
  • Half of workers say they want to continue working at home because they prefer it
  • Remote work changes the world 
  • Convenience Maximalism as driving force for e-commerce and the delivery economy

Trends we see today highlight key domains to consider as the future of extended reality evolves

Laws and Regulations Trends

  • With few laws regulating virtual spaces today, existing bodies are trying to determine how current laws and regulation may be extended to emerging technologies, as well as provide data standards to the development community.
  • New entities are emerging to provide a flexible framework and baseline set of standards, guidelines and best practices to ensure a safe and inclusive XR environment.

Ethics Trends

  • Increasing conversations around ethics and bias within technology continues without real solutions yet conceived.
  • The ethical dangers around AI continue to be magnified within industry circles.

Age Groups Trends

  • Uptake in virtual reality users dominated by 16-34 year old’s, though planned use of VR ‘gaming’ for older people with cognitive decline is in the works. 
  • Development of technology-enhanced game-based learning for children with ASD is increasing

Technology trends

  • Continued improvements to hardware to further enhance virtual experiences
  • Increasing use-cases of technology assisting consumers in stores

we do see emerging issues arising around extended reality

  • Will technology take jobs away from humans or will technology create next generation jobs for humans?
  • Will the digital divide exclude certain groups of people, or will solutions arise allowing for equitable & inclusive access?
  • Will the bias in programming continue down the path of discrimination or will DEI efforts topple the traditionally discriminatory codes?
  • Will governmental bodies mandate regulations or will businesses self-regulate their technology?

companies have shared their plans and projections on the topic

Here are just a few plans to explore

  • Lenovo, at CES 2021, announced its first AR glasses extension 
  • Facebook and Ray-Ban are teaming up for first smart glasses set for release in 2021.
  • Apple eyes 2022 for the VR Headset Launch
  • Tech companies Pledge to Hiring Diversity
  • Best Buy commits to investing $44 million to diversity, inclusion, and community efforts by 2025

And, here are a few projections to consider

  • Extended reality market is projected to grow from $42.55 billion in 2020 to $333.16 billion by 2025
  • Flourishing Demand of Mixed Reality in Healthcare Market Set to Witness Huge Growth by 2027
  • Worldwide revenue will increase from $1.1 billion in 2020 to $2.4 billion in 2024
  • China, U.S., Western Europe, and Japan will continue spend the most on AR/VR
  • Global revenue for VR, mobile AR, and mixed reality headsets will grow respectively from $2.6 billion, $1.6 billion and $0.8 billion in 2018 to $5.1 billion, $2.8 billion and $4.4 billion in 2023
  • There were over 1 billion AR users in 2020 By 2025, the worldwide user base of both AR and VR games will grow to 216 million users.

We have two short scenarios for your reflection

Extended Novelty: XR Remains on the Fringe (2025)

In this baseline scenario, the tech industry is still navigating how to leverage their project/service offering within the overall ecosystem. Further, the industry continues to navigate how to create technological advancements that speak to a variety of lived experiences and underrepresented communities. Amid this, the hardware continues to be priced as a novelty and the time & resource investment required for an optimal experience outweighs any benefits that may arise for a consumer. Because of this, most people are not willing to buy the novelties without knowing what’s on the horizon with tech sector. In this novelty setting, the big monopolies maintain barriers for any of the smaller players to have a fighting chance at impacting the industry. In addition to this rocky rollout of the hardware, the 5G expansion throughout the world takes much longer than anticipated due to logistical hiccups and social safety concerns. The slowed 5G expansion along with an overall lack of tech industry collaboration, leaves the novelty users with wanting. Consumers continue to spend most of their time on varied social media platforms, eagerly awaiting the day that XR technologies seamlessly integrate with their online community experience. Though the XR technologies are still ‘working the kinks out,’ the remote work normalization arising after the 2020 pandemic continues to be the default in the professional services sectors. 

Blurred Boundaries: An XR First World (2025)

In this alternative scenario, leaders spent the past 5 years correcting and transforming the tech industry. The tech businesses invested in DEI to grow the diversity of programmers creating tech and team members ideating uses for tech from a variety of lived experiences. The 5G expansion allows for universal access to a high-speed network that allows consumers easy access to digital experiences. XR technologies are priced at affordable rates allowing the masses access to new types of virtual experiences to unlock new ways of thinking, new ways to connect with others, and new ways to understand what is real. The XR experience is so seamless for users that consumers consider both the virtual world and physical world, ‘real world’ happenings. For the first time in human history, consumers can create multiple identities and new ethical dilemmas arise around identity and personhood. Digital natives shape their lives around their virtual experiences and perform XR experiences over physical world-only living. The world continues to be a complex and layered place to navigate – with dimensions regularly being unlocked thanks to technology and consumer excitement. 

how does the future of XR relate to you

For each scenario consider

  • If nothing changes with your organization’s current strategy, will you thrive in this scenario?
  • How well suited is your organization to thrive in the future scenario? 
  • How might the current value your organization delivers to consumers shift or evolve to maintain your relevance and competitiveness in the scenario?
  • Consider ways to transform or next level your organization as an industry leader within the scenario.