Should You Buy the Hype? An Inside Look at the Virtual Reality Landscape

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When 19-year-old Palmer Luckey launched an ambitious virtual reality Kickstarter campaign back in 2012, in no way could he have dreamt up a scenario that involved reawakening a billion-dollar industry, grabbing Mark Zuckerberg as a boss, or fueling a conglomerate arms race between Facebook, Google, Samsung, Sony, HTC, Intel and AMD.

Source: Kickstarter

Source: Kickstarter

But that’s exactly what happened.

His redesign of virtual reality for the 21st century defied all expectations, raising ten times the initial $250,000 goal. Not only did Luckey's campaign attract $2.5 million dollars, he also captured a growing market segment yearning for VR. To put it simply—gamers were stoked.

Surprisingly, so too was Mark Zuckerberg.

Zuckerberg became enthralled by VR’s raw potential to disrupt gaming, entertainment and of course, social (imagine Skyping with your friend in China, but instead of chatting with a 2D image, you are both virtually together on the same couch in 3D, immersed in conversation).

Consequently in 2014, less than two years after the Kickstarter, Facebook acquired Oculus for $2.2 billion dollars, and in doing so legitimized the VR industry overnight.

"We're making a long-term bet that immersive, virtual and augmented reality will become part of people's daily life,” said Zuckerberg.

With his track record for sniffing out “what’s next” and a distribution network of 1+ billion people, many have been quick to infer VR has a very bright future. Some analysts are already predicting VR will generate $30 billion in revenue by 2020, and many of Zuckerberg’s Silicon Valley counterparts haven’t hesitated to make similar predictions.

VR is still perhaps one or two years away from going mainstream, but more consumers are being exposed to it than ever before. Advancements in headset technology regularly make front page news on CNN, the Wall Street Journal, Business Insider and Wired. VR has even infiltrated the holy grail of pop-culture, prominently featured (and lampooned) on a recent episode of South Park.

But none of this VIP treatment matters if the product can’t sell. With the consumer Oculus Rift six to twelve months away, some are still on the fence, debating if they should buy the hype.

Realistically, many businesses don’t have time to wait and are already bracing for a future with VR in it. As executives scramble to  invest in their own VR initiatives, many want to know what’s actually happening in the space.

Below are excerpts from Greenlight VR’s July Research Report, which investigate trends on the state of the industry, including VR growth, investments and opportunities.

The Industry Is Expanding Rapidly

The number of companies we consider “pure-play” VR—those with a majority of their revenues derived from selling virtual reality related products and services—has spiked 250% since 2012 (which unsurprisingly coincides with the timeframe of Oculus launching a Kickstarter in ‘12).


Over a Quarter of All VR Companies Are Less Than a Year Old

This means a majority of VR companies are early-stage startups. Examining the landscape most companies (27.7%) are less than a year old and almost half (47.9%) of VR companies have between 0-1 years of experience. The bottom line: don’t be intimidated to jump in. Most are just getting their feet wet and experimenting in the space for the very first time.


Virtual Reality Is Going Global

While the United States accounts for nearly 51% of the entire VR landscape, the other 49% of companies we track are spread across 45 different countries and 6 continents.



Much of the undiscovered talent (e.g., developers and designers with VR project experience) exists overseas. To that point, the countries with large-scale VR operations beyond the US are the UK and Canada, with emerging communities taking shape in France, Germany, Australia, Spain, Japan, Netherlands, Switzerland, China, Italy and Portugal.


Investment Is Flowing Into VR

In the last five years, virtual reality companies have raised $746 million in venture capital investments. Investors pumped 50% more money into VR startups during the first six months of 2015 than in all of 2014—a good sign for the industry.

image06Investors Are Bullish—But Still Cautious

Of the 163 VCs  in the space with at least one investment in a virtual reality company, almost 90% have invested in only one company. While some investors are relaying multiple investments and/or creating VR-specific funds, a majority of investors are taking a “wait-and-see” approach.


Opportunities Exist in Education, Healthcare and Social

When examining the fundraising landscape in VR, notice a majority of the investments are heavily linked to the gaming/entertainment sectors—which makes sense, as gaming is likely to dominate the industry early. But this space (along with architecture/3D visualization) is highly competitive. For those daring enough to dream big in education, social experiences and/or healthcare, these are highly underfunded areas ripe for disruption.


With many curious to explore VR, Greenlight VR created a comprehensive ecosystem map that outlines premier companies and sectors in the space.        


Distribution Platform: Distributions platforms contain VR applications and content available for viewing, download, and/or purchase by consumers.

Examples: Oculus Share, Youtube

Peripherals: Companies that produce supplemental virtual reality accessories (cave, treadmill, wearable) to the headset.

Examples: Virtuix Omni, Sixense, The Void

Camera Capture Hardware: Companies who make specialty cameras and related equipment used in capturing virtual reality content.

Example: Go Pro

Stitching Software: Companies who make audio and video editing tools for virtual reality productions.

Example: Kolor

Head Mounted Display: Companies who manufacture virtual reality headsets and related equipment.

Examples: Oculus Rift, Gear VR, Cardboard

Engines: Companies who make 3D rendering and processing engines as an enabling input for virtual reality content.

Examples: Intel, Unity

Research Institutions: Organizations performing groundbreaking research related to virtual reality.

Example: Stanford University

Media: Virtual reality specific media outlets covering news, interviews, projects, podcasts, etc.

Example: Upload VR

Content (Cinematic): Companies that produce cinematic or experiential (non-game) virtual reality content.

Examples: Blue 44 Productions, Innerspace

Content (Gaming): Companies that produce virtual reality games.

Examples: Epic Games, Harmonix

Content (Healthcare): Companies that create games, videos, and applications, which have the explicit purpose of improving consumer’s health  and wellness.

Example: DeepstreamVR

Content (Social): Companies that primarily produce content that is enjoyed in a peer-to-peer social network in VR.

Example: Altspace VR

Content (Live/Action, Sports & Music Entertainment): Companies that create sports and musical content which can be either pre-recorded or live broadcast.

Examples: Jaunt, Fox Sports

Content (Enterprise): VR service or agency creating content for profit (architecture, real-estate, financial modeling, marketing campaigns, etc.)

Examples: Digitas, Patron, Mountain Dew, Arch Virtual

Content (Education): Companies engaged in producing virtual reality content to be educational.

Example: Expeditions

Content (Journalism): Companies who produce news, documentaries, and other journalistic virtual reality experiences.

Example: VRSE

[banner image courtesy of]

Howie is a senior research analyst for Greenlight VR. Greenlight VR is the industry leader in market intelligence for the global virtual reality economy. The company tracks more virtual and augmented reality companies than any other market data company — to date, over 1 million data points on thousands of companies. To learn more, visit

To get updates on Future of Virtual Reality posts, sign up here.

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Howie Leibach

Howie is a senior research analyst for Greenlight VR. Greenlight VR is the industry leader in market intelligence for the global virtual reality economy. The company tracks more virtual and augmented reality companies than any other market data company — to date, over 1 million data points on thousands of companies. To learn more, visit
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Discussion — 11 Responses

  • Kevin Estes August 2, 2015 on 10:28 am

    If I had money to invest, I would place a small bet on VR, because the growth potential is so high. Of course it may be too soon for a VR boom. But a boom is surely coming within five years.

  • Brian Weiner August 2, 2015 on 1:05 pm

    The Illusion Factory is a 36 year old company. We started working with VR a couple decades ago but the technology was not right. Now we are full speed on a slate of ambitious VR projects and our proprietary Augmented Reality Television Projects. This paradigm shift is past the point of wondering…. it is inevitable now. Many, many new opportunities on the horizon for forward thinking companies to innovate in this space. We created to house all of our VR/AR related activities. Great article… keep up the outstanding work!

  • Quantium August 3, 2015 on 4:13 am

    Alec Reeves, the inventor of PCM in the 1930s, asked on a BBC Horizon program in 1965, why move bodies when all people really need is to move minds.

    Now the world is under a real and pressing threat from climate change, yet most of its people are busy trying to be where they are not. On a clear day, the sky can be nearly white with vapour trails, and the roads clogged with stationary traffic waiting for their turn at roundabouts. Apart from the few electric cars, they are all emitting pollutants and carbon emissions.

    Airports and traffic jams are no fun. Reeves wrongly predicted that people will not put up with them. Maybe immersive VR is the solution that will make his dream come true.

    • Richard Davey Quantium August 12, 2015 on 7:13 pm

      That’s a little over the top Man come back to reality virtually will ya? The climate game is up all created my man by man to move the over-ton
      window in a direction that would shape us to their harts desire:(

  • Siege August 3, 2015 on 6:33 am

    Ah. Climate alarmists always come to spoil the fun. Let me put it this way, technology will soon make our global civlization emission free, therefore there is no need to take steps the will slow down our technological development to curtail emissions.

    Cheap energy is a must for technological development. The best course of action to achieve a clean future is to generate as much cheap electricity as possible today. That means coal, oil and natural gas.

    • Quantium Siege August 3, 2015 on 7:15 am

      And part of that development is immersive VR, which is what this thread is about. Reeves’ original prediction about the expansion of telecomm was made before climate change had been considered. It was to deal with the ennui of traffic jams and hub airport waiting rooms. At that time there wasn’t even three hour check ins, instigated after the abuse of Islam on 9/11/2001.

    • Richard Davey Siege August 12, 2015 on 7:14 pm

      Yo I am with ya siege:)

  • Quantium August 3, 2015 on 7:26 am

    Here is a very speculative article about virtual worlds from 1996:

    Reality has proven rather different!

  • JustinLutz August 4, 2015 on 8:42 am

    Awesome post Howie…very informative! VR has seen several periods of expansion/excitement only to see that excitement fade when the technology failed to meet expectations. This time I believe hardware and manufacturing advancements have finally caught up to the point where it is becoming increasingly obvious that VR is here to stay. Here’s another article on the state of consumer VR as of Q1 2015.

  • Richard Davey August 12, 2015 on 7:17 pm

    I have an Idea for VR I want to disrupt the real estate market! I need to join in conversation with those who write code? let me know! Richard

  • Howie Leibach August 13, 2015 on 2:28 pm

    Thanks for all the positive feedback everyone! VR is certainly an emerging technology primed for disruption. It’s the perfect time to get involved so if you’re feeling inspired, don’t hold back. The community is still small, passionate and friendly….but probably not for long.

    In terms of fundraising, more has occurred in VR in the first half of 2015 than in all of 2014 combined! VC’s are beginning to warm up to the reports they read (e.g. Digi-capital estimates VR will be a 30 Billion dollar industry by 2020, ABI Research projects that 43 million virtual reality devices will ship by 2020). Of course, 2016 will be an EXTREMELY telling year. If the consumer-facing headsets are well-received, these initial estimates should hold true. We’re less than 1 year away!