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Product Developers More Optimistic About AR than VR

Lack of budget was one of the primary obstacles to developing VR technology

October 26, 2016

US developers at companies in the virtual reality (VR) space or working on VR products are interestingly more enthusiastic about the long-term future of augmented reality (AR) than about VR, according to August 2016 research.

US Product Developers Who Are More Optimistic About the Long-Term Future of Augmented vs. Virtual Reality, Aug 2016 (% of respondents)

Product design company Yeti surveyed product developers in a variety of roles at companies including VR startups as well as firms across industries beginning to dip a toe into the VR space. Most were familiar with the VR development process, but about a quarter did not have VR developers on staff—and among those who did, most had only a couple, reflecting both the nascent state of the technology as well as the likelihood of outsourcing development.

Among this group, more than half said they were more optimistic about the future of AR than VR. A third said VR had better prospects.

VR and AR are two different technologies. VR is fully immersive, while AR overlays virtual objects and other digital information on top of the real world.

Perhaps fewer respondents were optimistic about the long-term future of VR because of the many obstacles they faced to developing the technology. Some 40% of respondents cited lack of budget as one of the primary obstacles to VR development. Lack of resources with the appropriate skillset, development bandwidth and technological limitations were other hurdles mentioned.

Of course, AR had a big win this year in the form of Pokémon Go, which may be making it more attractive to developers.

Obstacles to Developing Virtual Reality (VR) Technologies According to US Product Developers, Aug 2016 (% of respondents)

Regardless, investment interest in VR and AR remains strong. Indeed, since early 2014, more than $2.5 billion has been invested in VR and AR companies across more than 200 deals, according to calculations by venture-capital research firm CB Insights. Q1 2016 had the biggest funding round yet, exceeding $1 billion—in large part due to a $793.5 million Series C investment in secretive mixed reality startup Magic Leap.

An analysis by venture capital firm Digi-Capital from July 2016 came to similar conclusions, showing around $2 billion in VR and AR investments in the 12 months preceding Q2 2016, with another $849 million in acquisitions during the same timeframe.

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