Ten Years of Virtual Reality: These Predictions Came True

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Ten years ago, Virtual Reality made a leap into the mass market. In spring 2016, Oculus Rift and HTC Vive were released, and shortly thereafter, Playstation VR brought the technology into living rooms for the first time.

Like many technological innovations, Virtual Reality was accompanied by a massive hype. At the end of 2015, VR pioneer Jesse Schell formulated 40 predictions in a talk about the development of Virtual Reality by 2025. In retrospect, they offer a fascinating insight into the mood at the time, as well as the hopes and visions of an emerging industry.

Jesse Schell was already working on VR projects at Disney in the 1990s. He later founded a game studio, wrote a standard work on game design, and developed style-defining VR games. In addition to his role as studio head, Schell teaches how to design virtual worlds at Carnegie Mellon University.

Ten years after the VR industry's restart, a look back is in order, guided by Jesse Schell's predictions, to take stock: Which assumptions turned out to be spectacular misjudgments, where was he surprisingly right, and which developments did Schell even underestimate?

Market Forecasts in the Frenzy of Expectations

Jesse Schell formulated his predictions at the peak of the VR hype. In retrospect, his market forecasts seem correspondingly detached from reality. Schell assumed exponential growth: portable VR headsets were expected to sell a billion times by 2022, driven by inexpensive and technically primitive smartphone holders like Samsung Gear VR and Google Daydream. In fact, these approaches were discontinued in 2019 due to lack of success.

Schell was right in assuming that gaming would drive the adoption of Virtual Reality, but he overestimated how much. Even the more technically demanding, wired VR headsets for gamers, such as Oculus Rift, HTC Vive, and Playstation VR, fell far short of Schell's expectations. While the latter sold around five million units, Sony did not even release sales figures for its successor. Despite a decade of commercial development, the VR gaming industry still accounts for less than one percent of the total revenue of the gaming industry.

Schell's predictions were driven by the conviction that gamers were "bored," longed for new experiences, and that Virtual Reality would satisfy this need. In reality, gamers proved to be significantly more conservative than expected, as evidenced by largely unchanged gaming habits. Furthermore, the VR industry fundamentally underestimated the barrier to wearing heavy technology on one's face and being physically active while playing. In the end, innovation did not prevail, but inertia did.

With the absence of a major market breakthrough, the expected cultural impact of Virtual Reality also remained limited. Schell's assumption that there would be a broad cultural debate, reporting on VR addiction and attributing rampages to VR games, has not materialized.

Schell Foresaw Technological Development

Schell's technological predictions were astonishingly accurate. For example, he predicted that by 2022, the majority of revenue would come from standalone VR systems. This prediction is already coming true in 2020, the release year of the Meta Quest 2, the most successful VR headset to date.

His assumption that there would be no more wired VR systems by 2025 is largely true: wired VR headsets have not disappeared, but they represent a small minority. Even Valve's Steam Deck relies on streaming, thus dispensing with the cable that was still used with its predecessor, the Valve Index. At the same time, the trend could reverse again in the coming years: Apple Vision Pro and Samsung Galaxy XR use a wired battery, and this could also apply to Meta's next VR headset.

Jesse Schell's VR Predictions

The following predictions come from a GDC talk from March 2016, in which Schell had revised some of his 40 predictions. They were translated into German for this article.

Prediction 1: By 2016, VR headsets will have permanently arrived in the mass market.

Prediction 2: By the end of 2017, eight million gaming VR headsets will be sold.

Prediction 3: For every gaming VR headset, there will be four mobile VR headsets.

Prediction 4: VR headset sales will double annually until market saturation is reached.

Prediction 5: Around 50 different VR headsets will be on display at CES 2017.

Prediction 6: As soon as Sony has sold ten million VR headsets, Microsoft will announce a VR headset for the Xbox One (presumably at E3 2018).

Prediction 7: By 2022, the majority of VR revenue will come from portable, standalone VR systems that do not use smartphones.

Prediction 8: By the end of 2017, an asymmetric party game will be among the ten most successful VR games.

Prediction 9: Madden 2018 will receive a VR version.

Prediction 10: By the end of 2018, a new game genre specifically developed for VR will emerge.

Prediction 11: By the end of 2017, the media will attribute at least one rampage to a VR game.

Prediction 12: By the end of 2017, reports of "VR addiction" will regularly appear in the news.

Prediction 13: By the end of 2018, at least three feature films will be released that address fears surrounding VR.

Prediction 14: By 2025, private VR home videos will be among our most valuable mementos.

Prediction 15: Documentaries will be the first VR films to win major awards.

Prediction 16: By 2020, VR pornography will be a billion-dollar business.

Prediction 17: By 2020, there will be at least ten virtual reality reality shows.

Prediction 18: Dante's "Divine Comedy" will serve as a model for successful VR storytelling.

Prediction 19: By the end of 2018, Comcast will operate its own VR channel.

Prediction 20: For feature films to work in VR, they must be social experiences. We will find out how this is achieved by 2025.

Prediction 21: By 2025, the majority of VR revenue will come from social experiences.

Prediction 22: By 2018, one of the ten most successful VR games will be a dance game.

Prediction 23: By 2025, the market for VR and AR board games will reach a volume of around 100 million dollars.

Prediction 24: By the end of 2020, there will be at least one VR MMO with more than one million subscribers.

Prediction 25: By the end of 2018, there will be a leading social VR platform, and it will not come from established providers.

Prediction 26: By 2018, VR emotes will be very popular and have a rather silly name.

Prediction 27: In 2017, at least one VR attraction will be found at every US state fair.

Prediction 28: By 2016, there will be at least 20 VR roller coasters worldwide.

Prediction 29: By 2025, there will be bowling with AR glasses.

Prediction 30: By 2025, the AR market will be dominated by so-called "video AR" systems.

Prediction 31: There will be AR experiences synchronized with television.

Prediction 32: By 2025, lectures with augmented reality will be widespread.

Prediction 33: In 2025, hunting virtual creatures in one's own home will primarily appeal to children.

Prediction 34: By 2018, gamers will switch to narrower glasses or contact lenses.

Prediction 35: By 2020, hardcore VR gamers will use glasses with prescription lenses.

Prediction 36: By 2018, VR headsets with eye tracking will be available.

Prediction 37: By 2020, Foveated Rendering will be implemented and by 2025 it will be useful.

Prediction 38: By 2025, there will be no more wired VR systems.

Prediction 39: By 2020, tracked physical objects will be standard for VR and AR.

Prediction 40: In 2025, robots will touch you in VR, and you will like it.

Eye-tracking and foveated rendering matured earlier than Schell expected and made it into a mass-market product with the Playstation VR2 in 2023. Another assumption also came true faster than predicted: with the release of the Meta Quest 3, VR headsets with video passthrough have become the dominant form of portable AR devices, while true AR glasses remain a thing of the future. Like most experts, Schell also underestimated how quickly AR technology would develop. In 2025, lectures with AR glasses are still science fiction, but at least there are initial attempts with mixed reality experiences that are synchronized with television.

Virtual Reality: From Science Fiction to Everyday Product

What about predictions regarding the software that would shape Virtual Reality? Schell correctly predicted that social apps would dominate the medium. He also predicted that by the end of 2018, a new VR-specific game genre would emerge. Precisely in that year, Beat Saber was released, establishing the genre of VR fitness games, which has since spawned countless imitators.

Schell misjudged how successful VR pornography would be and how widespread immersive recording techniques would become. To this day, only enthusiasts capture memories with special VR cameras or as Spatial Video. What Schell could not foresee at the time are newer developments: such as artificial intelligence that retroactively adds a third dimension to any photo and video, as well as methods like Gaussian Splatting, which enable fast and realistic 3D capture via smartphone. Both will contribute to the spread of immersive memory media.

Even though Schell overestimated the market development overall, he was right in one respect: a large part of the population has likely come into contact with Virtual Reality by now. VR headsets have transformed from science fiction into an integral part of consumer electronics that, unlike in the 1980s and 1990s, will not disappear again.

(mack)