How The Coronavirus Tested The Resilience of The Virtual Reality Industry
CEO at ARVI, the leading developer of VR gaming products
I am Michael Dementii, CEO at ARVI, the leading developer of VR gaming products. I offer to take a look at the VR domain though the prism of coronavirus and analyze the effect the pandemic will have on the industry.
The idea of doom and a deadly pandemic coming to life through the movies of Ingmar Bergman, Terry Gilliam or Steven Soderbergh has always stirred our imagination. Yet it’s been distant, somewhat surreal and attractive to writers at all times. Visualize, they said, and your wildest thoughts may come true. And, for over the last three months, the reality has indeed been nothing but scary.
Our horror movie we are a part of is called ‘Covid-19’. The virus outbreak paralyzes the world, spreads like fire, eats up countries and takes lives. The human race responds to contamination with isolation and lockdown. Businesses with physical branches, offices, requiring public gatherings and interaction, shut their doors. Huge events, conferences, and film festivals are postponed indefinitely. Schools and teachers are quarantined. Streets are empty.
When the real world shuts down people still have their safe haven — virtual dimension. Can’t help but wonder how the pandemic will change things for VR. I invite you to reflect upon that.
The toll on global business
Covid-19 hit the overall business sentiment globally, and so it did with consumer behavioral patterns. It all began in China. The genesis of the virus happened to be in the country known as the world’s greatest exporter.
The pandemic ruthlessly suspended the Chinese manufacturing en masse, thus, no huge and well-established business was spared. Basically, the supply chains have been disrupted, and this has a domino effect on the entire performance of the companies.
So, who suffers the most? Due to quarantine, around 50% of the businesses in entertainment industry had to reduce their staff or even close down, and there is no way of knowing for how long. Apparently, travel and HoReCa businesses have been severely affected.
Hilton and Marriott chains have closed their hotel properties in China and beyond, expecting between $25-50 million losses by the end of this year. Here, we can also add cruise lines and airlines to the mix. The shares of the most prominent market players are down to around 80%.
Investors are now prepared
to receive quarterly revenues $200-300 million lower than expected before the outbreak. Due to the fact that the travel industry is a key contributor to the global economy, we have stepped into the next financial crisis.
Because of economic ties, China has dragged down the entire Asia Pacific region — Singapore, South Korea, and Vietnam. The US services sector, the world’s largest consumer market was hit in the stomach. Oil prices reached the absolute record since 2001 — they haven’t been that low in 19 years.
Stock prices are down in major markets, bond yields are lower. All in all, the magnitude of the disaster is obvious, as businesses and workers put it — “It has all gone to hell”
. Panic and despair aside, let’s approach the situation pragmatically.
Technologies have been considered the magic wand for the business world for years. They’ve been the locomotive of change, digital transformation, which has, in turn, given birth to new meanings, and experiences. To figure out whether tech can save the day now, we should probably analyze what mess coronavirus has made in IT.
What happens in the tech
Again, the supply chain is the area of major concern for the technology industry as well. Since Chinese factories and plants ended up with partial and then complete closure, this has led to global giants closing their stores.
Apple is experiencing a significant iPhone supply shortage because of Foxconn, its China-based manufacturing company, closed its production. In view of this, global smartphone production will go down
10% in Q1 this year. As a logical consequence, the shortage leads to decreased shipments.
Other than that, the virus caused the cancellation of the world’s most crucial technology events. Conferences such as Mobile World Congress or Global Marketing Summit have traditionally gathered the brightest minds of the industry, the most important companies.
These events are the meccas for innovation, and now these happenings, which are vital for the tech domain, are postponed until better times. Because of this, the industry may miss out on valuable partnerships and prospects.
However, the dwellers of the tech world are survivors, and crisis usually points to where the opportunities are. The circumstances have formulated certain trends, such as the high demand in a new tier of communication, new interactive experiences.
In this context, the 5G technology will be decisive for providing a seamless and high-speed connection. The need for transformation and working in remote mode highlights virtual reality and vast opportunities it bears within.
The virtue of VR: it can be anything
Where the real gets shaken, the virtual environment comes to the fore. A dimension that Covid-19 cannot shatter. VR is a powerful resource that can take many forms, can be well-translated into various industries, lots of processes and operations. Apart from being pure fun, today it is literally a lifeboat.
The power of VR was known long before the pandemic came along. In 2018, the global VR headset market was estimated
at $5.02 billion. Statistics reflect one important fact: the majority of business owners and entrepreneurs are already using VR or plan to use it in their enterprises any time soon.
Over twenty industries all over the world are reaping the benefits of VR. More specifically, in the automotive industry engineers unleash their imagination and are free to experiment with vehicle design. Dwellers of retail sectors take online shopping to a new level via VR department stores.
In real estate, you can browse property offers without leaving your households and comfy couches. Sports, entertainment, gaming — those areas have been familiar with VR for years. 360 market is expected to grow exponentially, blurring the line between real and surreal.
Today, the world finds itself in circumstances where virtual reality is much more than a pleasant addition — it’s an avatar for the business or even an entire domain. Let’s take the travel industry, one that has been affected. If the work can be done remotely, then traveling can be done virtually.
Virtual tourism gives a quarantined person a chance to walk the ancient Maya city far and wide, see the key historical monuments, national parks, and a 360-degree video gives this immersiveness and makes you believe you are really there.
The education industry has been using VR mostly for training purposes. Med students, as well as engineers, mechanics and aerospace trainees, have been harnessing the advantages of VR for learning and upgrading. As far as secondary education is concerned, virtual reality inserts gamification into studying and stimulates creative thinking: everything you cannot do in real life is possible in VR.
Moreover, virtual reality platforms have been elaborated for kids with special needs, mental issues or other disabilities. Healthcare specialists can explore human anatomy and gain valuable insights through VR sessions. Interestingly enough, virtual reality is used as pain relief
People suffering from mental illnesses, depression, PTSD or anxiety see VR as a gamechanger
for them, and successful practices are quite common. Doctors in Dubai are applying
VR glasses as part of smart ambulance framework to monitor their patients while transporting them in an ambulance.
Telehealth support groups on the basis of VR are gaining popularity, and these therapeutic applications for people with different conditions can be helpful today probably more than ever.
During this social isolation period, enterprises can apply VR for virtual meetings, virtual offices for remote teams, interactive product presentations, experiential training, and whatnot.
It’s quite obvious — VR is not going to die. It’s been alive and kicking for years, and sadly, the corona ignition is the milestone for VR, opening an array of opportunities.
Since we are in trouble these days, and there’s no aspect of our lives that hasn’t suffered, we should use the untouchable resource that we have — virtual reality. Both businesses and their clientele have a chance to stay connected and survive this crisis, because, this too shall pass.
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