THE VIRTUAL REALITY BREAKOUT
WHY THE EXCITEMENT?
"I’ll never forget that moment" "The experience could not have been more authentic" " I've never felt emotions like this in a video game — until I tried VR" "I laughed hysterically" "This was the best twenty dollars I have spent in a long time" "It was one of the most extraordinary experiences I have ever had" "This is going to change everything"
Those are real comments by authors of online articles about virtual reality.
Virtual Reality can be so realistic that it literally fools the body/mind into thinking the virtual world you are experiencing is real and is in real time. It can be a profound experience. Any real world setting can be virtualized either via software (like a video game) or via 360 degree photography. And, it can be live. Here's a recent article about what VR is like: http://phys.org/news/2016-03-virtual-reality.html
People ask what the killer app will be. Like with TV or the smartphone, there probably won't be ONE killer app. There will be many killer apps, and it will vary by personal taste: Would you want to stand on stage with your favorite band in front of thousands of screaming fans -- live, and even sing a riff all by yourself backed by the band? There will be a VR app for it. You wanna stand at the edge of a mountain cliff, and then dive off and fly in a flying suit? There will be a VR app for it. You wanna drive in Nascar at around 200 mpg? Kiss your celebrity crush? Tour museums, travel to exotic places, sit next to presidents? There will be an app for it. Killer apps because it will be more like actually being there than watching from a distance. You are the camera. The possibilities are endless.
It is happening now, and in various ways simultaneusly - gaming, movies, music, travel, education, and - yes - porn apps are already being made.
The big tech and media companies want in on it. Facebook bought Oculus for $2 BILLION in 2014. Google invested $542 million in Oct 2014 in Magic Leap (AR & VR), and in Feb announced the largest VC 'C' round in internet history of $793 million. Google is working on a VR operating system. Apple acquired Metaio and FlybyMedia. Intel has made a number of investments - they just announced on March 9 the purchase of Replay Technologies for (sources believe) $150-$170 million It's not for a niche market. Disney led a $65m funding round in Jaunt, a VR content company. These companies are taking VR seriously. As are big individual investors -- the list of angel investors in virtual reality companies has gone from around 100 to over 1000 in the last year.
PROJECTIONS - Huge Growth in 2016!
SuperData predicts growth from $660 million in 2015 to $3.7 billion in 2016 and that it will be bigger than TV in 10 years. http://venturebeat.com/2015/11/23/mobile-is-the-gateway-for-virtual-reality-becoming-a-15-9b-industry-by-2019/ http://districtvr.com/vr-will-be-bigger-than-tv-in-10-years/ . Digi-Capital projects $30 billion by 2020. SuperData predicts $40 billion. That's huge growth and it starts THIS YEAR with an 560% increase.
WHEN WILL IT TAKE OFF FOR INVESTORS?
Investors are interested in IF and WHEN it is going to take off. In a very real sense, it already is taking off. Related stocks may take off sooner that some think and here's why: Virtual reality is about to be thrust into the public eye in a big way with major releases expected very soon by some of the largest technology companies:
RECENT AND NEAR TERM COMMERCIAL RELEASES
A major push by multiple big players is happening pretty much simultaneously, and very soon:
Facebook: The widely anticipated launch of their Oculus Rift headset was on March 28, as pre-ordered units start shipping.
HTC: Their highly acclaimed Vive was released in homes in April.
Google: On Feb 6 the Financial Times indicated that Google is planning to release a more substantial virtual reality product akin to Samsung's Gear VR. It is expected we will hear more about that from Google in May, and the hardware will come in the early fall.
Microsoft: Hololens went on pre-order on Feb 29 for developers, shipping began March 30. https://blogs.windows.com/devices/2016/02/29/announcing-microsoft-hololens-development-edition-open-for-pre-order-shipping-march-30/
Sony: PlaystationVR (formerly project Morpheus) release was announced on March 15 as being in October for $399. Over 230 developers are working and 50 games will be available this year. More at http://blog.us.playstation.com/2016/03/15/playstation-vr-launching-october-for-399/
Apple: While nothing has been announced, some see evidence of strong interest by Apple, in recent comments by CEO Tim Cook, patent filings, and hirings: http://www.macrumors.com/2016/01/26/apple-ceo-tim-cook-on-virtual-reality/
Intel is very interested in the technology, making a number of aquisitions: http://wallstreetforensics.com/why-vuzix-is-primed-for-a-takeover-offer/
Samsung has their GearVR, already in the marketplace, which is in partnership with Oculus.
Microsoft is working with Oculus to bring gaming to XBox fans. They also have Hololens, which in addition to Augmented Reality may have VR applications, and is mentioned above.
The major Hollywood Studios have recently become very interested in virtual reality and in September Disney invested into virtual startup Jaunt during their $65m round in late 2015: https://www.linkedin.com/pulse/hollywood-studios-embrace-virtual-reality-derek-e-baird
CONTENT, PRICING, QUALITY
As with many new technologies there are concerns. Critics mention a lack of content, high pricing, and poor quality experiences.
A comprehensive report out on March 22, 2016 says:
"We are pleased to say that the content is finally here and has some solid momentum and includes gaming and non-gaming content. Oculus will launch with 30 games; PSVR with 20
Supporters say the content is growing very quickly:
"Of the 2000 North American game industry professionals who participated in the survey, 16 percent said they're currently working on a game for a virtual reality platform. That's up from 7 percent last year, which is a big leap, and the biggest gain for any platform this year. Fifteen percent said the next game they make will come to virtual reality, compared to just 6 percent last year." http://motherboard.vice.com/read/most-game-developers-believe-in-virtual-reality-but-arent-developing-for-it
There are already hundreds of apps for Google Cardboard. Here are some of the top ones: http://www.wareable.com/google/the-best-google-cardboard-apps
There are a number of startups working with VR content: Jaunt, NextVR, Vrideo, Wevr. One of the best, with high quality content is VRSE, which has partnered with Apple, The New York Times, NBC, Vice, United Nations, U2, and AnnaPurina http://vrse.com/ http://venturebeat.com/2016/02/13/chris-milk-vr/
As with most new high tech ventures, pricing on the best quality units is high enough to limit the appeal. However, Google Cardboard headsets are dirt cheap as just $5 for simple ready-to-make viewers. Nicer looking viewers for Cardboard go for a very affordable $20-30. These use a smartphone so are available easily for mainstream usage. You get what you pay for - The Oculus Rift is said to be very high quality, but sells for $599, while Google Cardboard is of lower quality - yet many are still finding very cool apps for it. In the middle is Samsung's GearVR which sells for about $100 and uses specific Samsung phones.
Usage and awareness is growing rapidly among consumers:
In late 2015 the New York Times shipped over a million Google Cardboards to its subscribers.
"On January 27, 2016, Google announced that in the platform's first 19 months, over 5 million Cardboard viewers had shipped, over 1,000 compatible applications had been published, and over 25 million application installs had been made. According to the company, users viewed over 350,000 hours of YouTube videos in VR during that time and 500,000 students took a VR field trip through the Expeditions program." https://en.wikipedia.org/wiki/Google_Cardboard
For more about the growth in usage, see this recent USA Today article: http://www.usatoday.com/story/tech/news/2016/02/15/sports-illustrated-swimsuit-issue-have-virtual-reality-feature/80346296/
PORN (reporting - not advocating!):
No discussion of VR really is complete without mentioning the potential for porn, as it has long been seen as having a large role someday. Well, that day appears to be arriving, with sites popping up as consumers...well, consume content. 10-20 million viewers are expected industry wide by the end of 2016. I'll let you read more yourself: http://thenextweb.com/insider/2016/02/05/a-deep-dive-into-the-business-of-virtual-reality-porn/#gref http://www.cnbc.com/2016/01/19/virtual-reality-porns-next-tech-breakthrough.html
Here's a video showing some consumer reactions:
It may well be that porn will play a major role in mainstream adoption of other content that is suitable for all audiences.
MICROCAP & PENNY STOCK INVESTMENTS IN VIRTUAL REALITY:
Here's the good news. While you won't find much from simple Google searches, there are a number of microcap companies involved one way or the other in virtual reality. Some are quite interesting:
VUZIX - symbol VUZI.http://vuzix.com Maker of glasses/headsets for both AR and VR. In January 2015 Intel invested $24.8m and acquired a 30% stake. Partners with Jaunt, a VR content provider Disney invested in in September, 2015 during a $65m round. A large OEM (Google, Apple, Microsoft?) has purchased over $200,000 worth of waveguide display engines just to evaluate Vuzix’s waveguide technology...More reading about VUZI, their tech and buyout odds here: http://wallstreetforensics.com/why-vuzix-is-primed-for-a-takeover-offer/
SPECTRA7 MICROSYSTEMS - (TSXV: SEV, US: SPVNF). http://spectra7.com They trade on the grey market, with avg vol in last 30 days (3/5) of 45,000. Float reported as of 2/23/16: 116m shares
Per their website, "Spectra7 makes the electronic products we use everyday dramatically thinner, lighter and higher performance. These products include ultra-thin 4K Panels, ultra HD displays, head-mounted displays for both Virtual Reality and Augmented Reality, Drones and Data Centers." They have 47 patents and are in over 50 products. In October 2014 they announced an order to be in over 500,000 VR headsets. Lots of great Prs:http://spectra7.com/news ,
According to Sophic Capital, while the company has remained silent, according to their report, Spectra7 provides a key component that powers Oculus headsets!
"The component is Spectra7’s VR7100 processor, which 'reduces the size and weight of HDMI interconnects while supporting 4K 60FPS video' according to the product brief. iFixit’s teardown folks were far more explicit: “Hot stuff!” they commented" http://sophiccapital.com/wp-content/uploads/2014/11/Download-Full-Virtual-Reality-Report-Here.pdf
They say in another report: "Spectra7’s interconnect chips will likely find homes in HMDs. Some HMDs will succeed; others will vanish; and Spectra7 Microsystems will win regardless of which HMDs consumers purchase". More info here: http://www.cantechletter.com/2015/12/small-cap-discoveries-for-2016/
On Jan 16, 2016 (only 16 days in!) the Company also announced that it has already received customer orders for the first quarter of 2016 that exceed the $1.6 million in expected revenue for the fourth quarter of 2015. “The year 2016 is off to a great start as new product design-ins begin to convert into volume orders”, stated Tony Stelliga, CEO of Spectra7. “We believe that 2016 is going to be a break-out year across a variety of product categories that could use Spectra7’s patented technology.”
D-BOX Technologies (TSXV: DBO US:DBOXF) http://www.d-box.com D-BOX Technologies Inc. designs, manufactures and commercializes cutting-edge motion systems intended for the entertainment and industrial markets. This unique and patented technology uses motion effects specifically programmed for visual content which are sent to a motion system integrated into either a platform, a seat or any other product. The resulting motion is perfectly synchronized with the on-screen action, thus creating an unparalleled realistic immersive experience. Used in Movie Theaters, Home Theaters, Gaming, Simulation & Training, and Themed Entertainment.
D-box is directly involved in the emerging Hollowood expansion into more immersive experiences. They have 96 employees and the head office is located in Longueuil, Canada with American facilities in California. For qtr ended Dec 31, 2015, had $8.2m revenues - up over 65%, with net profit of $397k. Growing rapidly as they continue to expand into movie theaters in America through their relationship with Cinemark with 80 screens in 40 theaters planned for 2016-17. On the heels of a recent partnership with Sony Pictures Entertainment(SPE) in the context of the launch of the Goosebumps movie, D-BOX, in collaboration with 20th Century Fox films took part of the Martian virtual reality experience with Oculus Rift. A good read can be found here: http://www.d-box.com/?wpdmdl=16324 and some good press releases are here: http://www.d-box.com/corporate-page/news-and-press-center/
PULSE EVOLUTION CORP - PLFX. Well known project with the Michael Jackson and Tupac Holograms. Recent investment by Simon Fuller.
TAPINATOR - TAPM. Their gaming products are well-suited for Virtual Reality.
UBIQUITY - UBIQ Past PR's have indicated virtual reality involvement in 'immersive advertising'.
VIRTRA SYSTEMS - VTSI Simulation training primarily for govt/military/law enforcement.
MAD CATZ INTERACTIVE- (TO: US: MCZ) Gaming controllers. Several very popular products. Recent major layoffs. Prior CEO indicated VR responsible for increased fly stick sales.
FLEXPOINT SENSOR SYSTEMS - FLXT Makes flexible sensors used in a variety of industries, including wearables. Recent PRs state their products are being used for VR.
INFINITY AUGMENTED REALITY - ALSO AR software platform, but also involved in virtual reality.
THE GUITAMMER COMPANY - GTMM. The smaller American counterpart to D-Box Technologies, with immersive entertainment for movies. Prior projects with firsthand haptics in coordination with sports-related action (ie racing, NHL hockey) suggest interest in virtual reality.
SOME REAL CHEAPIES (buyer beware!):
COROWARE - COWI http://coroware.com Business Consulting Services: R&D engineering services; business process workflow; software architecture, design and development; content management; console, PC and online game production; marketing coordination and management. Robotics and Automation: Custom engineering such as visualization, simulation and software development; and mobile robot platforms for university, government and corporate researchers.
Far from a one-man team, Coroware older filings show some 30 or so employees - 21 are engineers, and LinkedIn shows 50-200 http://linkedin.com/company/coroware-inc-
The excitement here is an unvalidated (as of March 5) working relationship with Microsoft on their highly secretive Hololens project, which has potentially enormous implications for both Augmented and Virtual Reality. They announced in Dec 2015 a $3.5m plus contract with a Fortune 100 company. Soon after the CEO posted this on facebook: http://imgur.com/a/TdeOo
More here at relatively busy board: http://investorshub.advfn.com/CoroWare-Inc-COWI-2096/
REELTIME.com - RLTR Provider of virtual realty content. Claim to offer a highly advanced platform.
GEONOVUS - (CSE: GNM, US: GMINF) - recent acquisitions indicate moving into VR content space
INNOVATIV MEDIA GROUP - INMG New Broadway Cinema in place to use DigiTheater process to produce VR content adaptations of stage shows
RISING INDIA - RSII expressed an interest in getting into VR
NEXT GALAXY - NXGA owns CEEK platform, recent departure of management (devastating for shareholders) citing lack of funding and agreement for them to use CEEK for a very small royalty
SIMLATUS - SIML - newly aquired company with advanced broadcast equipment and software, and intends to move into the AR/VR space. An upcoming 1 for 500 RS has been announced, but then removed..
STEREO VISION ENTERTAINMENT - SVSN recently acquired Star Gardian, which has a leg in VR - appears to be content.
NOVINT - NVNT - assigned a haptics patent to Facebook. No communication from the comapany for a number of years.