1 / 20

2016 was supposed to be the year of VR. Instead, augmented reality ruled

Https%3a%2f%2fblueprint-api-production.s3.amazonaws.com%2fuploads%2fcard%2fimage%2f310944%2fgettyimages-586942886

All signs pointed to a revolution: Powerful VR headsets — Facebook’s Oculus Rift, the HTC Vive and Sony’s PlayStation VR were about to make their official, consumer-ready debuts, while Google's Cardboard and Samsung's Gear VR we're making noise in mobile. The stage was set for 2016 to be the year virtual reality took off.

But a funny thing happened along the way to the VR revolution — it turns out much of the content and tools needed to support the new world of VR weren't as fully cooked as the hardware. Add to that the late release of Oculus Touch, the handheld accessory that allows for deep interactivity with the Oculus Rift, arguably the VR headset the public has heard the most about, and you have a recipe for a VR market still struggling to find its footing in its march toward mainstream users. 

Image: Rex Features via AP Images

And while that's only a temporary state, it nevertheless will lead some to doubt the power of VR, given all the hype around the technology in the last 24 months. Another component of that new-user doubt may be fueled by less-than-stunning VR gateway experiences delivered by Cardboard, the Gear VR and more recently, Google's Daydream View.

Those mobile VR experiences do a great job of hinting at what real VR is like, but anyone making a spending decision on whether to look into higher-end VR headsets (which includes the additional cost of a graphics-centric PC) won't likely be swayed by the cheaper VR experiences. 

A woman wears Sony’s PSVR during a launch event in Tokyo's Ginza shopping district on Oct. 13, 2016.

A woman wears Sony’s PSVR during a launch event in Tokyo's Ginza shopping district on Oct. 13, 2016.

Image: Kyodo via AP Images

Right now, the best first-time VR experiences are mostly available through VR arcades like Tokyo's VR ZONE: Project I Can, and one-off "activations" like Ghostbusters: Dimension, which was swarmed by eager users in midtown Manhattan this summer, and the Assassin's Creed VR kiosks that will soon offer moviegoers a taste of VR cinema (via the Oculus Rift) at theaters in several major U.S. cities.

But since those one-off events are still fairly rare or have limited access, most consumers have yet to understand the full power of high quality VR. 

The state of VR content

"[Cardboard is] a novelty. And you have to be careful with novelties. Novelties go to the bargain rack pretty fast," David Cole, the founder and CEO of NextVR, said during a recent meeting we had in New York to discuss the current state of VR, as well as its future.  

"We chose not to launch on Cardboard because it's not a viable play-out. It's just not the kind of thing you're gonna play a full game on — most people are having to hold [the device] to their face. But I don't think there's any permanent damage [to drawing VR adopters], and Google's Daydream View has come in just in time to make things better."

NextVR and other, new VR-focused studios like With.In (formerly VRSE) are driving much of the content — frequently live sports and documentaries — available for mid-tier mobile VR platforms like the Gear VR while the higher-end platforms mature and, eventually, become more cost-friendly.

Both the NBA and the NFL, in partnership with NextVR, have already begun broadcasting live and recorded VR sports events, ensuring that VR will become an essential part of most professional sports fans' media diet. In fact, earlier this year, just after the $4 billion sale of the UFC, I met with the company's COO, Lawrence Epstein, who confirmed that the Las Vegas-based mixed martial-arts league is already engaged in testing VR shoots for its live, pay-per-view events some time in the future. 

But even with all this activity and investment, VR remains a mystery to even those relatively tech-fluent users who are chained to their smartphones and tablets. 

And that may be why people like Apple CEO Tim Cook have come out publicly as betting on AR (augmented reality) over VR, at least for now. Those intentions were made clear when Apple acquired AR company Metaio. And for a company that is always plagued with product rumors, the surprise here is that there aren't any rumors being floated about an Apple VR or AR headset to compete with the likes of Facebook and Google.

The augmented future

The power and potential of AR was perhaps epitomized by the debut of Pokémon Go, a classic Japanese video game reimagined as an AR experience on a smartphone screen, sending legions of gamers around the world trekking through parks and alleys — real ones! — for imaginary monsters. Now just imagine those imaginary monsters are instead floating, three-dimensional historical figures embedded with factoids for tourists, or coupons for deals at local Starbucks or Best Buy stores and then the potential of AR over VR becomes obvious. 

A less faddish example of AR's potential is Snapchat Lenses feature, which debuted in 2015. Allowing anyone to instantly have a new, expressive face mapped onto their own, which moves as they move in the real world, Lenses are just the tip of the AR iceberg.

The company recently posted a job looking for "an expert in producing 3D character and props animation," signaling that Snapchat, aided by wearable cameras in the form of Spectacles, may soon be populated by a vast array of virtual characters layered on top of real life. 

So in the near term, considering that the most valuable tech company on the planet, Apple, and the most popular mobile app company, Snap, and the leading operating system maker, Microsoft, (with HoloLens), are all betting on AR over VR, AR is probably where the biggest gains will happen in the coming months. And this is just the beginning for real, robust AR applications. 

But that doesn't mean that high-end VR will necessarily relegated to a mere niche. Recent standout VR apps like Oculus Medium, Google Earth VR, and games The Climb and Arizona Sunshine are proof that VR will absolutely capture intense interest — once people actually try it. 

Along those lines, the social media-powered version of VR that Facebook CEO Mark Zuckerberg showed off earlier this year (see below) — with people playing cards with each other in VR from different locations and even taking family selfies in the virtual world — may add rocket fuel to VR adoption, as long as the high-end headsets (which those experiences will likely require) become less intimidating. Oculus says it's working on just such a headset.

Meanwhile, in the background, the massively funded and super-secretive Magic Leap continues to lurk, with few having sampled what the company describes as a kind of mix of VR and AR. But despite the funding and the skunkworks hype, until the public meets the product, it's just a cool idea that has yet to prove its worth.

VR and AR are still infant technologies, but the vision behind them is more clear: Reality will slowly melt away and give way to "mixed reality," a new, tech-powered Disney-like world in which nearly every surface, object and location becomes an animated interface delivering digital magic in just about every corner of the planet.

It's a compelling picture. Just don't expect it to happen in 2017.

BONUS: Oculus Rift Review: 'Time will move by without you realizing it'

Apple Inc.

Technology Apple Inc.