Davey Jose, Thematic Analyst, Disruptive Technologies, HSBC
Virtual reality reaches a tipping point
COVID-19 lockdowns have led to a greater role for virtual reality (VR) in the way many people relax, learn and work. We think use of the technology will continue to rise, even as some countries begin to ease coronavirus restrictions.
A growing number of musicians now offer immersive VR experiences in place of gigs, for instance. Customers can stream broadcasts to their headsets and enjoy the sensation of being in the front row while in the comfort of their home. Other cultural events, such as theatre and comedy, could soon follow, especially if people feel less confident about gathering in public places.
Streamed films, television programmes and sporting fixtures have been broadcast with VR options over the past few years. In a post-pandemic world, we think VR live sport stand to gain in popularity.
As well as showing sport, VR gives an alternative way to play them. Rhythm and dance apps can offer an aerobic workout, while dedicated sporting apps can help you work on technique.
But this technology is not just for entertainment. It has the potential to supplement and enrich lessons at home or in the classroom. VR apps already exist to help young people learn about everything from the solar system to the human body. Tokyo’s National Museum of Nature and Science was among the institutions to start offering VR experiences during lockdown. Others, such as the Anne Frank House Museum in Amsterdam, were already making free virtual tours available long before coronavirus.
VR can also help reshape the world of work. Some firms have experimented with online 3-D and VR conferences during lockdowns as a way of providing a greater degree of immersion and interactivity than 2-D teleconferencing. Virtual 3-D, VR-based offices could offer a new way for people to make and maintain social connections with their colleagues – and may prove valuable in industries where working from home may be here to stay.
But hurdles stand in the way of more widespread adoption. Aside from their cost, current VR headsets have a fixed vision distance, which some people find hard on their eyes after prolonged use. ‘Varifocal’ lenses, currently under development, could be more comfortable and help boost take-up.
The rise of VR also raises environmental and social implications. On the one hand, it could reduce the need for travel by making immersive VR-based teleconferencing easier. One technology company estimated that switching to VR for a single six-day conference earlier this year helped to save 5 million miles of travel. This could be positive for mitigating climate change. On the other hand, increased use also means higher demand for electricity to power and cool servers, putting increased strain on energy networks.
The potential social benefits of VR technology include extending a lifeline to older or vulnerable people who are unable to go outdoors, helping them meet friends or see the world. But for society as a whole, we do not yet fully understand the potential long-term consequences of moving further away from face-to-face human contact.
If current trends continue, these may be questions we have to confront sooner rather than later. We think current conditions could be a tipping point, potentially making the virtual world a reality of daily life for many more people.
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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Davey Jose
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