The introduction of virtual reality (VR) headsets has finally come to fruition, led by Samsung's (NASDAQOTH:SSNLF) mobile VR headset, Gear. Though Samsung was quick out of the gate thanks to Facebook (NASDAQ:FB) and its Oculus team developing the Gear VR mobile solution, competition is on the way from some of the world's largest tech giants, and it's easy to see why.
Some estimates suggest the VR market will become a $30 billion powerhouse by 2020, and as much as $150 billion when augmented reality (AR) -- Microsoft's (NASDAQ:MSFT) HoloLens is an ideal example -- is tossed into the mix. Those are awfully big numbers, and based on some recent data it appears not only are estimates that VR and AR sales will run into the billions of dollars on target, they may prove to be conservative.
Virtual reality solutions including Samsung's Gear and the soon-to-be-released Rift headset from Facebook's Oculus give users a fully immersive experience. In other words, VR "transports" users into a virtual world of 3D, high-definition images and audio. Augmented reality is similar, but there is a distinct difference.
Microsoft's HoloLens provides users with an augmented reality experience in which virtual "stuff" is put into a user's real world, as opposed to fully immersing them in a virtual world, a la Rift and Gear. A recent study of Internet users in the U.S. is indicative of why Facebook, Samsung, Microsoft, and the other VR and AR players are chomping at the virtual bit to get their products to market.
To the surprise of no one, the younger the Internet user, the more interested he or she is in VR. According to a survey conducted by Touchstone Research in October and reported by eMarketer, a whopping 79% of generation Z (aged 10 years to 17 years old) expressed an interest in VR. But what should really interest the VR and AR providers is how many older Internet users are willing to give VR a try.
Per the report, 73% of millennials, aged 18 to 34, are also eager for the widespread availability of VR, as are 70% of the Gen X folks that include the 35- to 50-year-old crowd. Nearly two-thirds of U.S. baby boomers 51 years and older said they're interested in VR in this survey. Clearly virtual reality, and by extension AR, could be a boon for the Facebooks, Microsofts, and Samsungs of the world.
Naturally, gaming is the first thing that comes to mind when VR of AR are mentioned, but Facebook and Microsoft in particular have plans for their solutions that go well beyond gaming. In the same study mentioned above, 35% of U.S. Internet users said they would be open to spending more online if retailers had a virtual reality alternative, because it would give them a "more realistic feel of the product remotely." And etail is just one of many possible commercial applications.
When Facebook first announced it was acquiring Oculus and its Rift VR headset over a year and a half ago, CEO Mark Zuckerberg acknowledged the obvious, saying, "immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate." Zuckerberg added, however, that gaming is "just the start" and from Facebook's perspective, VR is a communications platform that has the potential to change industries, including healthcare, construction, and education.
Of course, Microsoft's Xbox console is a natural for VR, and it's already inked a deal with Facebook's Oculus to bring it to the gaming masses. But Microsoft shares Zuckerberg's vision of expanding beyond gaming, describing its HoloLens AR as a means to "bring products and information to life," increasing productivity and improving business. HoloLens is being touted as the next great tool for product designers, engineers across multiple industries, and science, among others.
Based on the data of Internet users and their interest in VR, regardless of age, Facebook's vision of an immersive future, or in Microsoft's case semi-immersive, appears to be spot-on.
Tim Brugger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.