Banking on virtual reality
By now, it should be fairly obvious that virtual reality (VR) is the next big thing in the video gaming industry, but is it going to be nothing more than just a passing fad? We spoke to Nelson Rodriguez, the Marketing Director of the Global Games Industry
Should video game developers concentrate their efforts on producing virtual reality content instead of conventional games? Is there a market that’s sizable enough for developers to thrive solely on VR games?
The market for virtual reality (VR) games is still developing. The install base for all headsets, including the more affordable mobile-oriented devices, is small compared to all other ways to play games. However, that is changing rapidly.
From a business point of view, VR games are still a financial risk right now, so it is important to consider funding models in the short term. Key hardware makers are all investing in content, which means there might be a way to mitigate risks through those platform funds. Ultimately, what matters most is the experience that video game developers are trying to build – VR or otherwise. The medium of the game should give developers an opportunity to do something powerful with it.
How can brands and companies leverage on virtual reality in terms of advertising?
Advertising in VR represents both risk and potential. On one hand, users direct their own experience and view, which means the typical interruption and overlay models will not be natural fits for VR. On the other hand, immersion in VR allows for deeper brand integration.
Imagine sitting in the driver’s seat of a car you have been considering to buy, or walking onto the balcony of a cruise ship suite you recently reserved. It would be optimal, without a doubt, if those ad experiences were native to the games they are built into.
Considering that VR is still catching on in most countries, is it still financially viable for advertisers and video game developers to invest their resources in the medium? Is there a possibility that VR will fail to catch on?
VR is not going away. I just played a game demo from Insomniac Games that deeply immerses and engages the player during the gameplay. We are just starting to see some definitive experiences on hardware that is still maturing. When the headsets get lighter and wireless, and with higher resolution, we can expect to see higher adoption. There are concerns that VR will not catch on as quickly as the enthusiasts would like. There’s a risk of disillusionment and I myself have been be very conservative about VR, but I am starting to see games that will be hard to resist.
What about augmented reality? Pokémon GO has shown the monetization potential of augmented reality, so how else can brands use the technology to their advantage?
Augmented reality (AR) monetization can be considered an old concept – sponsored reviews using geolocation have been around since the early days of smartphone app stores. Back in 2011, my team conceptualized an advergame that would encourage players to visit retail locations to help drive preorders. As computing power increases, and geospatial data becomes more robust, there will be significantly more opportunity with AR advertising.
Do you think augmented reality is more lucrative to advertisers than virtual reality due to its wider reach – in the sense that anyone with a decent smartphone is able to enjoy AR, while a dedicated headset is required for people to indulge in VR content?
Augmented reality’s potential goes well beyond advertising – not only is the hardware ubiquitous (every phone is an AR device), AR is also more accessible for most users as it does not require users to be separated from the world around them. While VR transports the user at a high attention cost, to a simulated world, AR simply overlays simulation onto the user’s real life. This has great potential for training, technical support and medicine, et cetera – there is so much that AR can make possible for every user. Advertising will find a natural fit there.