Comment on AR will be startup dominated, VR will not by Jerry Neumann

In reply to <a href="reactionwheel.net/2016/07/ar-will-be-startup-dominated-vr-will-not.html;.

It's a good question and I wish I had time to clarify and expand the arguments. I don't usually whip off posts in 20 minutes, but that is all I've got right now. I'll approach it from a different direction:

Because the uniqueness of VR is its immersiveness, the quality of immersion will be a key driver in what users perceive of as the quality of the experience. Competing on this dimension will become (as it did with PC gaming) a race towards realism, and we know that's expensive.

The uniqueness of AR is its interactivity with the environment. Competing on this dimension is more of a UI and customer-understanding problem and creativity and deep knowledge will be rewarded. Because creativity and insight can't be bought, large companies won't have an overwhelming resource advantage over startups.

Re the form AR takes: if there's a high-value, lower-volume application then it would make sense to build ad-hoc hardware and since I believe AR will have more of these, I think there will be more ad-hoc AR hardware. Hardware will probably be based on standardized components and eventually become commoditized (like PCs), but there is a long-ish window to build hardware companies. (The reasoning around high-value, low-volume might apply to VR also, but probably primarily in defense applications, where very low volumes can be sustained because budgets are so large. On the other hand, the ability for a newcomer to enter the defense market has nothing to do with quality of product and everything to do with politics, so not a good place for startups...unless your CEO is the person who can get something through the DoD purchasing process.)

Re the App Store and commoditizing your complements: I would never invest in a company that makes its money from monetizing an app, would you? Some have done well, of course, but the expected value over the universe of app makers is clearly negative. (I haven't paid attention to internet video, so can't comment there.)