Crowdfunding and the Rise of Virtual Reality

Virtual reality (VR), long time only admired by sci-fi literature fans, began to generate first excitement in the 1980s with the first game consoles and various media forms. However, it never caught on to become mainstream in the 90s due to a lack of significant R&D funding and was limited to expensive niche markets such as flight simulation and military applications. Nowadays, VR is back and this time it seems to stay. While advancements in graphical processing hardware and high-definition display technology progressed tremendously in the last two decades, major tech companies were convinced that the market for VR simply couldn’t support their investments. There simply wasn’t a viable way to measure demand for products that hadn’t been developed yet.

Crowdfunding has fundamentally changed the modern business model and is able to link developers and consumers. With the launch of Kickstarter 2009, inventors were suddenly given an instrument for gauging public interest in technologies. In 2011, Palmer Luckey, at the age of 18, built a rough prototype in his parent's garage in Long Beach, California. The next year, his Kickstarter campaign raised $2.4 million from nearly 10,000 contributors and the company took off to produce the Oculus Rift dev kit versions, DK1 and DK2, priced at only $350. In 2014 Facebook purchased Oculus in a $2 billion acquisition and the consumer version of the Oculus Rift is currently shipped starting at $600.

In collaboration with Oculus, the Samsung Gear VR was released in 2015 as an even more affordable VR experience. In this case, a Samsung smartphone acts as the headset's display and processor, while the Gear VR unit itself acts as the controller. This means you won't need a bulky computer with a top-notch graphic card as it is the case for the Oculus Rift. On the other hand the Rift provides a more immersive VR experience than the Gear. Since then many more VR headsets emerged on crowdfunding platforms and the renaissance of the VR industry began.

Kickstarter became a springboard for the Avegant’s Glyph, a personal VR theater system that met its $250,000 goal in just four hours and went on to receive $1.5 million from the campaign. Another successful Kickstarter campaign is the FOVE, an interactive VR headset that reacts to your eyes motion. Virtual reality applications from Unity, Unreal Engine, and Cryengine and many more have followed since.

After the first VR crowdfunding campaigns caught the public excitement and support, most major tech companies have jumped on the VR wave. Samsung released its Samsung Gear VR headsets and Google the Cardboard, both headsets using your smartphone as display. Microsoft is currently shipping the development version of the HoloLens, an augmented reality headsets that allows to overlap 'holograms' in your real world view and you can interact with digital content in relation to your environment. HTC has released the HTC Vive, which is available for $800 and is so far the most complete virtual reality experience, including precise motion tracking, natural controller gestures and real world augmentation thanks to the front-facing camera.

Major chip makers have also realized the demand for immersive VR applications. Qualcomm integrated mobile VR support in the new Qualcomm Snapdragon 820 processor and released recently for developers its VR software development kit (SDK). Nvidia delivers with the GeForce GTX one of the best graphics platform for VR and is also working on a new virtual reality technology with no motion sickness. AMD will release its next-generation Polaris GPU in a few months and a new high-end GPU architecture, Vega, launching by the end of the year. It is also collaborating with leading organizations to illustrate the power of VR outside of gaming, such as healthcare, entertainment, education, media, training and simulation. Intel has been making moves in the VR space for some time and bought, among others, augmented reality sports goggle maker Recon Instruments and is partnering with several headset makers.

Many more small VR companies have emerged recently on crowdfunding and equity platforms. Virtuix, creator of the Omni a 360º virtual reality motion platform may transform the gaming industry with a previously unheard of sense of immersive gameplay experience, is preparing to raise capital under Regulation A+ on SeedInvest. Silicon Valley startup, Wearality Corporation, has recently been funded on Kickstarter the Wearality Sky, which is compatible with all 5” and 6” smartphones. Team Impression Pi, a San Juan tech startup has raised $75,000 on Kickstarter for its virtual and augmented reality headset, Impression Pi.

Further headsets will follow later this year. Sony Playstation VR, a long-time driver in the VR business, is coming in October this year for $400. The ZEISS VR ONE GX is another new smartphone driven VR headset that will begin production in October for November. And you can bet Apple is working on its own VR ware as well. An overview of the main VR headsets that are currently or soon available is shown in the interactive infographic above. Many more exciting VR ware and applications will follow in the future, mainly so far limited by (mobile) graphical processing power.

While the examples above demonstrate how consumers and developers can collaborate to bring innovative technologies to market, there are also plenty of instances where crowd-funded projects have not delivered. Funding a crowd project doesn't guarantee its success. There is always risk involved in the investment, and the fact that some of these companies will never actually bring a product to market is one of the reasons why investors backed out of the VR industry in the 1990s.

The difference now, however, is that crowdsourcing makes the risk much smaller by distributing it widely, and backers are motivated by more than money. As an increasingly interconnected world, we can help to fund technologies that help us to become even more connected and innovative tomorrow.