MainMarket in brief


Main things about VR/AR today: new trends and different vision of established trends

August 20, 2020, 10:26 (UTC+3)|

In mid-August, ICT.Moscow launched the VR/AR knowledge base, which includes more than a hundred Russian and foreign practices for the implementation of virtual (VR) and augmented (AR) reality technologies since 2017. The analysis of the practices revealed several notable trends that confirm the growing interest of various industries in technology.

The experts who were interviewed by ICT.Moscow also show their interest in these technologies. Communication with them enabled us to understand the current state of the VR/AR industry, take a fresh look at the trends and consider some non-obvious aspects of its development. Representatives of companies that piloted projects in the field of VR/AR also spoke about the effects and prospects for further application of the technology.

COVID is not an obstacle to VR

According to PwC study presented in 2019, the market of immersive technologies will grow rapidly. In particular, it was predicted that the market size will grow to $1.5 trillion by 2030, and over $1 trillion in the augmented reality segment and $450 billion - in virtual reality. Valuates Reports’ latest forecast for the augmented reality segment also looks optimistic: analysts predict an increase in the size from $849 million in 2019 to $3.7 billion in 2026.

Representatives of the Association of Augmented and Virtual Reality AVRA explain, why the forecasts remained so positive even despite the crisis caused by the COVID-19 pandemic.

On the one hand, the development of areas related to events, marketing, and the creation of entertainment content was paused. But I think the growth of these segments will recover after COVID-19. On the other hand, education and industry areas continue to grow, since in the spring the availability of VR/AR technologies at enterprises allowed them to quickly continue working despite closed borders and restrictions on movement due to the possibilities provided by of VR/AR in remote communications, consultations and skills training.

It should be noted that VR/AR have a great potential in industry, education, medicine, tourism and the military. This applies to both business and consumer projects. Requests for project development fell this year due to the reduction of offline activities: business events and exhibitions, festivals, entertainment events. However, the demand for retail solutions with augmented reality, remote communication with both AR and VR, as well as platforms for communication, holding events and meetings has increased.

Ekaterina Filatova

CEO of AVRA Association

Ekaterina Degay, Head of Industry at AVRA and CEO of Formika Lab gives an actual example of positive effects in this area.

During the pandemic, a remote AR assistant was of great help druring the commissioning of complex foreign equipment. Earlier, it was very expensive to bring specialists from a foreign vendor, and during these months it also became impossible due to the ban on travel. AR has helped some businesses avoid downtime and understand that the technology can save significant amounts of money. Developers have invested in development over the past few years waiting for big deals in the future, now the time for those deals has come. And the accumulated competencies can be successfully monetized despite the crisis.

Ekaterina Degay 

Head of “Industry” at AVRA, CEO Formika Lab

The comments of experts are supported by the practices collected for the knowledge base: more than 25% of practices are from 2020. 14 of the the 30 cases selected for the current year are Russian. Moreover, there were Russian examples of solutions developed as a response to the COVID-19 pandemic.

Modum Lab developer from Saint Petersburg has created “Kollaborativnye prostranstva” (“Collaborative Spaces”) project, which enables employees to work remotely using VR. Dmitry Kirillov, President of the company, tells ICT.Moscow that he sees no impediments to the development of immersive technologies either in the context of the pandemic or in general.

The current market situation shows that there are no particular obstacles for the development of VR/AR. All problems are only in the heads, not in any restrictions. The market is growing, more requests are appearing, devices are becoming cheaper, more affordable, but everything is developing gradually. Any high-tech product cannot instantly appear in the hands of the user.

The market is being formed and is growing. There are large-scale projects in Russia and abroad. There are more and more government and commercial tenders for VR/AR, there is a market, and it is being actively filled with projects. It is obvious that VR/AR technologies will be further developed. The rest depends on the company: whether the team can apply the technology within the framework of a specific project, evaluate costs and revenues, enter the market and stay afloat.

Dmitry Kirillov

President of Modum Lab

Konstantin Negachev, co-founder and CEO of VRTechnologies, notes that now is the best time to invest in VR/AR projects.

There are still not many competitors, but at the same time there are many solutions that can be packaged into a product and scaled in the absence of competitors not only in Russia, but also abroad. Professional investors understand this very well, and, at present, there are no problems with raising capital, and no difficulties are expected.

Konstantin Negachev

Co-founder and CEO of VR Technologies

But then again, optimism still has to be careful. Denis Zakharkin, CEO of VR Concept, recalls that things are not so smooth in the VR/AR market.

It can be said that now the supply exceeds demand and this generates the feeling that there are more promises than really successful projects. But there are a lot of successful implementation projects - among large clients who are not ready to share the results until they receive real benefits. But sometimes it takes several years.

Denis Zakharkin

CEO of VR Concept

Some recent projects collected for the knowledge base are still at the launch stage, or they have been launched, but the results of piloting have not yet been announced. The reasons were explained by Ilya Flaks, Head of the LANIT Competence Center in the field of VR & AR:

The VR/AR segment is still very complex, the market is still being formed. Development costs a lot of money, and the output is still poor. The platforms are not as developed as we would like them to be, and, of course, the size of the audience and its activity are small.

There is not much money in the b2c market, and developers are waiting for the time of consumer VR. Another thing is the b2b segment, where the use of virtual reality technologies is growing every year. Areas of application are: training hard skills and soft skills, simulations, medicine, retail and real estate sales. In the b2b segment profits can be expected, and the number of players in the market is growing very quickly.

Ilya Flaks

Head of the LANIT Group Competence Center in the field of VR&AR

Rich application landscape

Ilya Flaks mentions that the areas of application of technologies are concentrated mostly in the b2b segment. This is confirmed by the technology application cases selected for the knowledge base. The most common areas of application of the technology in the world are medicine, education, culture and tourism, and industry. The situation with Russian cases is almost the same, but in the field of education one more case than in medicine was found.

It is important to understand that even if the case is related to medicine or industry, it all is often about training employees in certain skills (but there are also cases of using VR/AR in educational institutions). The case of the pharmaceutical company Biocad can be called an illustrative example.

We use VR/AR technologies to introduce new employees to laboratories and production, and to teach staff complex technological processes. This is a positive experience in all aspects: using VR/AR allows us to be flexible in terms of time and human resources. For example, organizing a tour around production facilities or a laboratory does not require any effort at all. The person just has to come to our corporate museum and take a virtual tour using VR glasses.

The application of the technology enables the new employee to simulate his actions in a virtual environment and study the process, learn the sequence of actions. It allows to optimize the time expenditures of the mentor, minimize possible errors and the risks of expendable materials loss during the period of training.

Anna Borisova

Senior HR partner in Production and Quality at Biocad

AVRA President Ekaterina Filatova notes that VR/AR practices will be more actively implemented if there is a wide 5G communications channel. She thinks it will contribute to the development of telemedicine, remote communication using VR, broadcasting of sports competitions, as well as more active use of augmented reality in tourism, navigation and communications.

Immersive technologies can also be useful for the development of urban infrastructure. For example, in April 2020, LANIT-Integration implemented a VR system in the main coronavirus center of Moscow for remotely coordinating the actions of doctors. Ilya Flaks explained what effects were achieved with the help of this pilot project and how it will be developed in the future.

The technology allowed medical staff and experts to reduce the risk of infection by minimizing contact with patients in red zones. The risk reduction effect was at the heart of the project. Is the gained experience positive? Sure. It allowed us to deeply study the problems of medical institutions and find scenarios for the application of the technology in medicine.

Currently we are adapting the system for use in surgery, rehabilitation, in research medical centers, for emergency services teams and ambulance teams. We already have the vision of technology’s application in military medicine and disaster medicine.

Ilya Flaks

Head of the LANIT Group Competence Center in the field of VR&AR

The technology will be also useful in other areas of urban development. The most promising application areas were listed by Eldar Fayzullin, Head of Cybersport and XR of DIT Moscow.

AR/VR technologies will be especially interesting for the development of culture and tourism. For example, it can be city-wide games and quests that will provoke the interest of the current generation in history and culture through game mechanics. In the urban economy you can create AR applications with game mechanics, that will explain how to save water, talk about ecology and preservation of natural resources to the city residents.

VR simulators with tactile feedback, which will prepare the employee for different scenarios and situations, training the neuroplasticity of the brain using game mechanics, can be implemented for the Ministry of Emergency Situations and the police. It will create a controlled and safe learning environment.

Eldar Fayzullin

Head of Cybersport and XR of DIT Moscow 

Technology for large companies

Russian cases collected in the knowledge base show that VR/AR technologies are implemented mainly by large corporations, retail chains and telecom operators.

Gazprom Neft is one of most notable Russian industrial companies working with VR/AR technologies. Four cases included in the knowledge base are related to the company. The head AR/VR Center of Gazprom Neft confirms that immersive technologies can indeed be used at a large enterprise for a wide range of tasks.

The use of technology makes it possible to accelerate processes - make decisions more efficiently, go through approval processes requiring the participation of a large working group faster and also get information faster in difficult conditions. The results of the implementation of AR/VR technologies vary depending on the area of use. These include economic factors (reducing the cost of training employees and equipment acceptance), as well as quality indicators (increasing labor productivity and work efficiency).

Vladimir Stishkin

Head AR/VR Center, Gazprom Neft

In terms of the possible usefulness of VR/AR for various industries, Ilya Simonov from CROC also highlights the industry and explains the reason why large companies are primarily interested in technology.

Today virtual reality is used not only in the entertainment industry, but also in the cultural, financial, retail and industrial sectors. In the industrial sector it is used to train employees of enterprises in a safe environment. Skills are practiced in classrooms using virtual reality helmets, not real equipment. The virtual environment allows to create trainings on working with equipment, as well as simulate emergency situations and reproduce other scenarios necessary for training. This reduces the likelihood of accidents in factories. 

Ilya Simonov

Director of CROC Immersive Technologies

VR/AR is not the first step

Presenting technology implementation practices in real industrial and business processes and possible barriers, the experts noted that the enterprises have to be prepared to implement VR/AR. And it is not just about financial preparation: the application of immersive technologies should to be based on a prepared technological basis.

Today many industrial enterprises are going through digitization, trying to optimize the production process with the help of various technologies. Let’s be honest: VR/AR in this chain is not the first step. A great deal of work has to be done in order to use AR effectively: a digital infrastructure should already be built, processes should be automated. Only then will it be really effective.

Also, there should be a leader of VR/AR-projects within the company, who has competence and faith in technology. He really has to be deeply into it. That’s about the management team. But it’s also important to think about about VR/AR in this chain is not the first step. . They should like AR-glasses, it should be more comfortable to work with glasses then without them. Without this, all the developments will be simply pointless.

Ekaterina Degay 

Head of “Industry” at AVRA, CEO Formika Lab

But it’s also important to think about about the operators: the technology should be friendly, understandable and useful for them. They should like AR-glasses, it should be more comfortable to work with glasses then without them. Without this, all the developments will be simply pointless.

Denis Zakharkin from VR Concept also speaks about it. According to him, in spite of the fact that the VR/AR industry has grown significantly in recent years and at the same time has fallen markedly in price, one of the main obstacles to its implementation in enterprises is the lack of high-quality independent VR/AR content. Consequently, preparatory work is required for launching projects.

The main obstacle, as always, is content. In the gaming market, these are high-quality, holistic game projects, and in the industrial sector - the presence of digital twins of manufactured or operating products (in construction - 3D models of facilities under construction). For business in order to implement VR faster, they need to implement 3D design (BIM and CAD systems), so they need to have 3D objects of buildings, cars, factories, etc.

Denis Zakharkin

CEO of VR Concept

By the way, the problem with software developments, that hinders the implementation of technologies in practice, is recognized by the developers themselves. 

The best design practices in virtual and augmented reality have not yet been developed. There is little research on the application of technologies with figures that tell us about how a person reacts and how to build virtual and augmented reality so that it is effective and user-friendly.

Also, on the market only few people have VR devices, so making content for the end user is not profitable. This results in users not wanting to buy devices. This vicious circle is being broken by technological giants (such as Facebook), who are investing in virtual and augmented reality, thereby contributing to creation of content. Consequently, VR becomes more attractive for users.

Yury Slatin 

CEO of LikeVR, a creative agency developing AR/VR solutions

Need more competencies

The problem with final content in VR/AR has been known for quite some time, but it is important to understand why this is happening. The developers also shared their thoughts on this with ICT.Moscow.

Today, there is no developed toolkit on the market that allows to create VR-projects quickly. That is why teams have to do a lot of work from scratch. So another skill valuable for a VR developer is the ability to make tools for automation and optimization.

Ilya Simonov 

Director of CROC Immersive Technologies

Konstantin Negachev from VR Technologies added that for high-quality development of VR/AR solutions, companies typically require their own competence center with a multi-professional and highly professional development team.

Today in the world market, for various reasons, there are not many really good operators, therefore the demand exceeds the capabilities of the developers. It certainly has an impact on quality and price. If you have a professional versatile team that can solve the whole range of problems in the field of immersive technologies, the income will be very good.

Almost all large companies have their own competence centers and teams that prepare solutions based on immersive technologies. However, this path of development is not a win-win, because in such competence centers it is very rarely possible to involve first-class full-cycle professionals who could solve problems of any level: from drawing and animating models to working with various tracking systems and developing realistic weight and dimension models and multimedia controllers. 

Konstantin Negachev 

Co-founder and CEO of VR Technologies

Another problem that developers regularly face is the low awareness of customers needs in the market. According to Stanislav Starykh, CEO of VR Professionals, it is the major barrier to the implementation of immersive technologies.

The only obstacle is the lack of the necessary knowledge and skills among VR providers. The technology itself is not required, it is needed to solve specific industry problems. You need to know not only VR, but also the specific industry for which the solution is being developed - its specifics, tasks, etc. The problem is that most VR companies do not have such knowledge. As a result, customers have to figure out why they need VR on their own. And then they spend a lot of time explaining what they want the developer to do.

Stanislav Starykh 

CEO of VR Professionals

Vitaliy Stepanov, head of the development and innovation department at Varwin, believes that this task - explaining what is required from the developer - is primarily the responsibility of the customer.

Among the main obstacles to the development and implementation of VR/AR technologies, I would name the low level of competence in the formation of tasks for virtual reality. It leads to development in VR for the sake of VR and has no beneficial economic effect when the costs of new technology are paid off by an effective solution to existing problems.

Vitaliy Stepanov 

Head of Development and Innovation Department, Varwin

The co-founder and CTO of Rubius Anton Kudinov noted that developers and integrators may also face difficulties in accessing VR/AR devices.

The manufacturers of the most interesting AR/VR devices did not complete certification in the Russian Federation, and all existing supplies are essentially of “gray scheme”. For pilot projects, it is a small problem, and for the full deployment of large-scale solutions in state corporations and large businesses, it is a stop factor in procurement. Unfortunately, I do not see the prospect of solving this problem until the Russian market becomes interesting enough for vendors in terms of the sales scale compared to the costs of certification.

Anton Kudinov 

Co-founder, Chief technology officer at Rubius

What’s next?

In spite of various difficulties, including the crisis caused by the pandemic, experts generally positively view the prospects of VR/AR development. In particular, they expect a significant increase in investment, and also rely on the 5G standard, which will allow the transfer of basic computing to the cloud infrastructure.

In many countries today there are no problems with the implementation of such projects, as they have already proved its effectiveness. Russia still has some uncertainty about these technologies, but this uncertainty is slowly fading away - you can see a lot of requests for work related to immersive technologies at different tender sites on a weekly basis. In terms of VR/AR development, the following steps should be taken:1) creating a tracking system that will allow to get the maximum user experience in small spaces;

2) developing a realistic system of user’s tactile senses; the user should be able to feel literally everything - from barriers and various objects to impact on his own body. Both of these points are likely to be implemented during this decade.

Konstantin Negachev 

Co-founder and CEO of VR Technologies

Those who started developing immersive technology solutions a few years ago, will be major players in the near future, if they continue to conduct research and experiments under a tight budget. (...) Investments will also be made and increased with a focus on augmented reality. Although I am sure the potential of VR has yet to be revealed.

Andrey Drobitko 

CEO of SketchAR

I think, the pandemic and progress in new equipment result in the situation when the technology becomes more available, and therefore more in demand. This will open up new rounds of investments, making them more meaningful and economically viable. 

Vitaliy Stepanov 

Head of Development and Innovation Department, Varwin

Over the next few years investments will be mainly focused on VR equipment. But it is those developing content and software who are the first to make money on technology. In the next 5 years, the helmets of a mixed reality are expected to appear - it is the most promising technology for the mass consumer. Now they are used as highly specialized solutions, which limits their distribution.

In 10-15 years, we can expect the spread of high-speed Internet, that will allow to significantly change the form factor of devices by reducing weight and size, due to the fact that all calculations can be transferred to the “cloud”. The golden age of this technology and mass distribution will begin, when a VR/AR device looks like ordinary glasses or even lenses.

Denis Zakharkin 

CEO of VR Concept

VR and AR are mostly about content, and this content is heavy. For its transfer and synchronization between a large number of users, large bandwidth capacity of the Internet and Internet channel with high standards are required, which is not yet fully provided. In short, 5G is required. And as long as the delivery of content does not fully work, it is not possible to perform all actions in “cloud”, to lower the requirements for user devices.

Yuriy Slatin 

CEO of LikeVR, a creative agency developing AR/VR solutions

Original (in Russian)


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