Insights EDU

The Coming Realignment: Strategies to address the future of Extended Reality

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Skye Priestley | Director of Business Development | Yarn Coporation

11 Dec 2020 | 6 min read

Are VR Headsets Just Fancy Gaming Consoles?

For the past decade, virtual reality (VR) and extended reality (XR) hardware has been aimed squarely at the gaming space, from the first demo of what would become the Oculus Rift by John Carmack in 2012, to the popularity of Beat Saber starting in 2018, to the more recent release of Half-Life Alyx earlier this year. But is VR destined to remain largely a gaming tool? And if it doesn’t, what changes will moving away from gaming precipitate?

One way to think about this is to compare the evolution of VR headsets with the evolution of console gaming platforms themselves. As in the console gaming world, headsets have been primarily dominated by a few large companies. Instead of Nintendo, Microsoft, and Sony for consoles, the VR space has had Oculus, HTC, and… well, Sony again. While some small, consumer focused headsets have also surfaced, as well as foldable smartphone kits like Google Cardboard, the VR world is currently dominated by these gaming-oriented headsets.

A couple sitting on a sofa, while the guy is wearing a VR headset enjoying extended reality

The current dominant use case Photo: @cottonbro

However, headsets are not consoles and the potential of VR exceeds gaming itself. New developments in augmented reality (AR) and extended reality (XR) are making this increasingly clear and the long anticipated arrival of glasses from both Facebook and Apple will likely draw this distinction even more strongly. The low price point for the Quest 2 and the mass marketing strategy that Oculus, in particular, is pursuing will likely succeed in spreading the use of VR to a larger mass audience at some point, probably in the near future. When these users arrive, how will they change the VR landscape and the model by which consumers currently participate in it?

A forest view through glasses as a glimpse to possibilities of extended reality

An imagining of a future use case: viewing calming imagery through VR glasses Photo: Bud Helisson (@budhelisson)

Predicting the Future of Extended Reality

It’s no easy task to predict exactly what form the extended reality market will take in the future. The products and services being marketed even today are too diverse and sophisticated to be captured by a single sales model. However, by drawing a simplistic analogy between VR headsets and televisions, we can more accurately understand how the market may organize itself around a set of distinct participants.

Specifically, a larger group of users owning VR headsets may use them for more passive forms of entertainment, much as most televisions are used today. This is one of several applications already envisioned by many companies working in the extended reality space, as shown, for example, in this recent Qualcomm ad. This new application for VR would change the product landscape by introducing pressures towards hardware and media standardization. This would move headsets away from a console gaming model, in which software is specifically designed for a given hardware platform. Instead, there would be a pivot towards a television or mobile phone model where universal media are shown on largely identical sets of software running on competing hardware platforms.

Concrete examples exist in how people currently enjoy television and movies. While the legacy model of tuning into a broadcast still exists, most viewers watch these media through services like Netflix or Hulu (the software platform) which can be accessed from a wide array of devices (the hardware itself). The market is therefore split into four distinct participants: the viewer, the media itself, the software platform, and the hardware. Companies compete within each of the three producer categories, but the largest pressure is the demand of the viewer for a convenient, standardized method by which to access their preferred media.

A panorama of New York

In quickly changing markets, foresight is invaluable Photo: Leon Seierlein (@leonseierlein)

While the VR hardware market is still young, these pressures will undoubtedly surface as the customer base expands outside of the performance-focused gamer category. Lighter performance requirements relative to what headsets are capable of will pave the way for standardization. As hardware platforms become more standardized, the proprietary distribution network in which companies create the hardware and control the distribution of software will weaken in favor of dedicated hardware companies. Software platforms that function across all hardware and compete for prestige media, and media production companies that are largely distanced from hardware concerns, as they create content based on a set of standardized requirements. This is similar to the current distribution model for 2D media.

The Growth of VR Media

Of course, VR media are not the same as traditional media. However, most of the current roadblocks to the more widespread consumption of VR media are societal and commercial rather than technological. For all of known history, technology has advanced at a slower pace than social adaptation to it. Only in the 19th and 20th centuries did technological progress begin to bump up against the capacity for societies to integrate and socially process the changes new technologies represented. Today, we are beginning to see instances in which technological progress is constrained by the inability of society, specifically of consumer markets, to swiftly reconfigure how we engage with the world in response to how technology allows us to engage with the world.

This manifests in several ways: for electric cars, we have a dearth of charging stations, nostalgic preferences for internal combustion engines, and existing ICE support infrastructure that must be overcome. For vaccination, we have, ironically, the ubiquitous success of vaccines in the past and a general consumer wariness about putting the products of science into our bodies. For social media, we have antiquated laws and the difficulty of defining truth in a highly connected era. And for VR, we have a lack of headsets and a lack of media production companies that are able to produce VR content. One challenge in particular is emblematic of these difficulties: we don’t even have a word for the sort of non-linear, 360 media experiences that VR headsets allow. What’s the word for the piece of media that transports you to a given place, time, experience, product, or point of view and then leaves you to explore according to your own desires? It’s not a video, but it’s also not a game or an app. “Experience” is too bland and ambiguous. We literally lack the vocabulary to advertise the future!

A sculpture in museum one day could be viewed in a virtual museum in extended reality

Legacy media Photo: Juliet Furst (@julietfurst)


For our product, Driftspace, this lack of a useful word for a non-linear VR media experience led us to repurpose the word “drift” as a noun and verb for this kind of experience—reminiscent of Twitter’s repurposing of the word “tweet” to name a previously unknown format: a short-form post on their newly invented micro-blogging platform. Whether this is the term that will take hold or not (we certainly hope it is!) is impossible to say. Whatever language ends up being invented, however, there is no doubt that massive changes are poised to occur. New generations of consumers who feel at home navigating extended reality environments will begin to make up a larger and larger proportion of the market. As a result, our current models for media consumption will become increasingly obsolete and relegated to the same niche markets as the media of the past, e.g., sculptures and poetry. An optimal strategy is not narrowly focused on the current market structure, which is organized in response to the fleeting importance of gaming to VR, but on the much larger opportunity that is waiting to be spoken into existence.

About the author:

Skye Priestley is a translator, technologist, and thinker who lives and works in Portland, Maine. He currently serves as the Director of Business Development at Yarn Corporation, a startup building a product, Driftspace, that aims to empower individuals and organizations to create and share VR experiences.

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