Search for VR's Killer App

Beyond the Gimmick to the Next Big Thing

In the rapidly evolving consumer technology landscape, finding the "killer app" for any new device category is a quest reminiscent of the search for the Holy Grail. This endeavor holds particularly true for Virtual Reality (VR), a space with potential yet still on the cusp of mainstream acceptance. Following my previous article comparing Rayban's Smart Glasses to VR headsets like the Oculus Quest 3 and Apple Vision Pro, it's time to delve deeper into the search for VR's killer application.

The success of Rayban's Smart Glasses can be attributed to their straightforward killer app: the ability to post Instagram stories from a first-person perspective without pulling out your phone. This ease of capturing and sharing moments leverages the immense popularity of social media, making the device an attractive proposition for those looking to share their experiences uniquely and intimately. With features such as Meta AI and music playback serving as delightful bonuses, the glasses carve out a niche in the market with relative ease.

However, the challenge intensifies when we pivot to more sophisticated and expensive VR headsets like the Quest and Vision Pro. The Quest 3 costs twice as much as the Raybans, and the Vision Pro costs a neat 12 times as much. For these devices, the killer app must not only be handy and immediately apparent to users but also offer significantly better or more cost-effective solutions than existing alternatives—or, ideally, both.

Consider the array of functionalities a modern smartphone offers, from communication and internet access to navigation, food delivery, social media, on-demand video, transportation, gaming, and photography. A smartphone, typically priced between $300 and $500, can handle all these tasks competently. This is why it has replaced the PC as the primary computing platform for many people worldwide. Against this backdrop, VR's value proposition—often framed as virtual renditions of existing applications—faces scrutiny. The critical question arises: will consumers be willing to invest in an additional computing device if their current smartphone fulfills their needs efficiently?

Meta and Apple, two titans in the VR space, are exploring potential answers to this question.

Social Media in VR

Meta's Horizon platform represents a significant bet on creating a virtual space populated by 3D avatars for real-time interaction. This vision draws inspiration from the success of online games like Fortnite and Animal Crossing, which have transcended their original gameplay objectives to become virtual social hubs. Fortnite's virtual concerts, in particular, introduce a novel form of virtual experience. However, even at its peak, Fortnite had just 64 million daily active users and 290 million monthly active users. Compare this to the 2.4 billion monthly active users that Instagram is set to achieve in 2024 - the market size for virtual social experiences needs to be bigger, and whether they scale like Meta's existing platforms remains to be seen.

Another challenge is the need for more expertise in building such 3-dimensional worlds. Unlike Epic and Nintendo (makers of Fortnite and Animal Crossing), Meta doesn't have experience building games. The lack of experience can be seen in the bugginess and general lack of appeal that Horizon suffers from.

This is not to say that Meta can't get Horizon to a point where it is a stable platform with competitive features, but so much of these virtual experiences is the ability to tap into culture and be "cool" (aka get the young people). Fortnite: Battle Royale - the biggest virtual platform was not even the main game. It was a companion game to Fortnite: Save the World, a cooperative survival game with construction elements. The companion game has gone on to become a cultural phenomenon, with promotion through social media and several celebrities, such as Ninja, Marshmello, and Drake, contributing to the game's popularity, achieving record-high viewership on streaming platforms in the process. It is challenging to tell what will click in Pop culture.

To Meta's credit, Facebook was cool, and it has shown a keen eye in identifying and acquiring other culture-defining properties like Instagram and WhatsApp. However, as both platforms have matured, they have given way to TikTok and Snap - two apps that now occupy the forefront of pop culture. Then there is YouTube, with its undeniable staying power. Whether Meta can create a culture-defining platform in Horizon is yet to be seen, but if the company's last few years are anything to go by - it doesn't look like it.

Fitness Revolution: VR's Potential

The US fitness industry is a heavyweight, generating a whopping $30.8 billion in revenue in 2023. Its larger cousin, the healthcare industry, dwarfs it at a staggering $4.3 trillion, encompassing hospitals, doctors, and pharmaceutical giants. Meanwhile, the wearable tech industry, where fitness trackers and smartwatches like the Apple Watch reside, is projected to reach $61.3 billion by 2024. Apple is a significant player in this tech-fitness fusion, leveraging its popular Apple Watch and fitness subscription service, Apple Fitness+. While separate revenue figures for each aren't publicly disclosed, Apple Watch sales alone were estimated at $48 billion in 2023, showcasing its significant impact. This move reflects a broader trend of tech companies integrating health and fitness into their offerings, aiming to capture a growing market focused on preventive care and personalized wellness.

Apple could leverage its extensive experience from the Apple Watch and Apple Fitness Plus into the Vision Pro headset by directly integrating health and fitness tracking capabilities into the spatial computing experience. By utilizing the advanced sensors, cameras, and processing power of the Vision Pro, Apple has the potential to offer immersive fitness classes and wellness experiences that track and analyze user movement, posture, and engagement in real time. This could include virtual reality (VR) workouts where users receive instant feedback on their form, augmented reality (AR) overlays for guided meditation sessions with physiological monitoring, or even gamified fitness challenges that encourage physical activity through interactive, spatially aware environments. Integrating health data from the Apple Watch could further personalize these experiences, providing a seamless health and fitness ecosystem that leverages the best of Apple's wearable and spatial computing technologies.

While innovative, integrating health and fitness functionalities from the Apple Watch and Apple Fitness Plus into the Vision Pro headset faces several challenges. Firstly, the form factor and usage context of a headset differ significantly from that of a watch, potentially limiting the types of physical activities that can be effectively monitored and engaged in while wearing a bulky headset. Secondly, there are privacy and security concerns with the increased data collection required for health monitoring in a more immersive environment, necessitating robust safeguards to protect sensitive health information. User comfort and safety are also paramount, as extended use of VR and AR headsets can lead to physical discomfort or motion sickness, which may deter regular use for fitness purposes. Additionally, creating genuinely engaging and effective fitness experiences in VR requires overcoming technological hurdles, such as accurately tracking a more comprehensive range of body movements without external sensors. Lastly, there's the challenge of accessibility and inclusivity, ensuring these advanced health and fitness features are designed to accommodate users of all abilities and fitness levels, which requires thoughtful design and possibly additional hardware or software adaptations.

The Supernatural app emerges as a compelling case study for VR's potential. By offering an engaging and immersive workout experience, Supernatural has captured the attention of fitness enthusiasts, prompting Meta's acquisition of the platform. The Supernatural app on the Meta Quest 3 addresses several challenges associated with integrating health and fitness features into VR headsets, which could be insightful for potential developments like those of Apple's Vision Pro. Supernatural offers immersive fitness experiences through boxing and flow workouts, set against the backdrop of stunning global locations and accompanied by energetic music, making workouts engaging and fun​​. This approach solves the issue of user engagement and motivation by transforming exercise into an enjoyable activity that users look forward to rather than a chore. More importantly, if you look at the typical user base of Supernatural - it's mostly women in their 30s and 40s - the app is popular with a demographic that has been historically tough for new tech products (but especially VR) to crack. The success of Supernatural serves as proof-of-concept for the health applications of VR.

Gaming in VR: Already a hit

Gaming in VR has seen notable successes, with platforms like PlayStation VR (PS VR) standing out for their dedication solely to gaming. PS VR showcases the potential of immersive gaming, having built a robust library of titles and providing experiences that traditional gaming cannot match. This focus on gaming has enabled PS VR to carve out a significant niche within the VR industry, demonstrating the viability and appeal of VR gaming to a mainstream audience.

Several VR games across various platforms have achieved fame for their immersive experiences and innovative gameplay. Titles such as "Beat Saber," a rhythm game that has players slicing through blocks to the beat of music, and "Half-Life: Alyx," which offers a deep, narrative-driven experience set in the Half-Life universe, have become synonymous with high-quality VR gaming. "Superhot VR" redefines first-person shooters with its unique mechanic where time moves only when you do, and "The Elder Scrolls V: Skyrim VR" brings the vast open world of Skyrim to life in VR, allowing players to experience the game in a completely new way.

These games, among others, highlight the diverse potential of VR gaming, from action-packed adventures and immersive RPGs to innovative rhythm games. The success of platforms like PS VR, coupled with the popularity of these titles, underscores VR's growing role in the gaming industry, offering experiences that are not just extensions of traditional gaming but are unique and compelling in their own right.

However, while VR offers unique and groundbreaking gaming experiences, it still competes with traditional gaming platforms with a much larger user base and a more extensive catalog of games. Convincing gamers to invest in VR technology, in addition to or instead of conventional gaming systems, remains a significant challenge for the industry.

Immersive Video: Breaking New Ground

The streaming market is becoming highly competitive with new entrants, leading to subscription fatigue among consumers faced with multiple subscriptions for content access. All streamers are trying to offer additional value to their users to increase subscription prices - which makes the stuff Disney is doing for the Vision Pro so interesting.

Disney+ is enhancing the immersive experience for Apple Vision Pro users by offering 3D content from its streaming service at the device's launch. This collaboration aims to elevate the viewing experience by providing access to unique animated screening environments, including iconic settings such as the Disney+ Theater, inspired by Hollywood's El Capitan Theatre. Additionally, environments like Marvel's Avengers Tower, the Scare Floor from Pixar's "Monsters Inc.," and Luke Skywalker's Landspeeder on Tatooine are designed to immerse viewers further into the Disney universe. But the biggest winner in VR streaming might just be the stickiest content ever produced - sports.

The US sports broadcasting and streaming market is booming, projected to hit $30 billion by 2025. While traditional cable holds strong, streaming giants like ESPN+ are rapidly acquiring millions of subscribers. This shift is pushing the overall market value, including sports broadcasting technology, to reach $71.57 billion by 2022, with continued growth expected. In short, the US sports viewing landscape is rapidly changing, with streaming carving out a significant and growing piece of the pie. Apple feels that VR can take a share of this pie and even help increase its size.

The NBA is enhancing the fan experience on the Apple Vision Pro by leveraging Apple's Immersive Video format. This technology allows for 180-degree content in 8K 3D and Spatial Audio, promising an immersive experience that NBA Commissioner Adam Silver suggests could be better than sitting courtside. The league plans to incorporate cameras capable of capturing this immersive video content, starting with events like the All-Star Weekend. The Vision Pro's NBA app offers features such as the ability to stream up to five broadcasts live or on-demand with Multiview, access to real-time player and team stats, and more, fully optimizing the viewing experience for vision​.

The ability to offer unparalleled immersion in sports and entertainment could redefine content consumption. Yet, the challenge lies in producing enough high-quality VR-specific content to justify the investment.

Web: Back to Basics

Incorporating a VR headset for traditional computing with a multi-monitor setup significantly enhances productivity and multitasking capabilities. This setup allows for an expansive, customizable digital workspace. The universal accessibility of the web, mainly through browsers like Safari on Apple's Vision Pro, might transform web browsing into a foundational application for VR. This approach leverages the extensive capabilities of the internet for work, making the web a potentially transformative platform for VR by offering a vast, adaptable environment for both professional tasks and entertainment, blending the familiarity of web navigation with the immersive experience of VR.

Apple's historical prowess in rapidly integrating new features across its devices has not been mirrored in developers' uptake of Vision Pro. The hesitation among app creators could be attributed to various factors, including the platform's novelty, unique user interface considerations, and the high device cost limiting the initial user base. While it's technically possible to adapt iPad apps for Vision Pro, meeting the new platform's standards is another challenge.

The integration of web-based applications through Safari on Apple's Vision Pro suggests a shift away from traditional app stores, potentially revitalizing the role of web browsers in the digital ecosystem. This shift underscores a growing preference for open web access over native apps, highlighting developer and corporate disputes with Apple's App Store policies. With features like multi-window support and WebXR, along with the possible backing for other browser engines, Vision Pro aims to enhance the user experience by leveraging the flexibility and universality of the web. This approach could redefine device usage, balancing between fostering innovation and maintaining App Store control.

So far so good but a long way to go

The search for VR's killer app is a multifaceted endeavor that requires technological innovation and a deep understanding of consumer needs and behaviors. As VR evolves, its success will likely depend on creating unique, compelling experiences that leverage the medium's strengths in ways that traditional devices cannot match. The journey is ongoing, and the ultimate destination remains to be seen. My intuition is that like the smartphone - if VR is going to be the next computing platform - we’re going to need a bunch of killer apps mentioned above and some we haven’t thought of yet for different people to want to get a headset.