Over the last week, it has become clear that Google is taking a step back from VR. After pushing hard on its Google Cardboard and Google Daydream platforms, the company revealed during its I/O conference that it will not be focusing on its headsets and software.

But how accurate is this? Does Google fully believe that the future is AR, rather than VR? And if so, what can we expect for the future of Google?

Why is Google not focusing on VR?

Google has taken a step back from its bold promises in 2016 and 2017, saying that Google Daydream is the next logical step for VR. The company pushed the product hard, ensuring their Google Pixel can work with the headset and investing heavily into award-winning studios. For years, it seemed like Google was laying the groundwork for becoming a major player in VR.

The reason for this, it seems, is that Google is focusing on other areas of VR. “Our focus right now is much more on services and the bright spots where we see VR being really useful,” said Clay Bavor, Google’s VR/AR lead to CNET. Instead, they are in “deep R&D” with the next stage of VR, focusing more on utility and form factor. But with the nature of R&D, plans may change over the next few years.

Google will not step away from VR fully. YouTube VR is still a popular platform for hundreds of thousands of people, and Ownchemy Labs will still create content for other VR headsets. That said, what is certain is that Google is betting big on AR over VR, at least for now.

Why is Google focusing on AR?

During the I/O conference, the company barely mentioned VR. Instead, AR took centre stage. The company announced 3D models which can appear in Google Search, meaning people truly understand specific topics. The example shown is a human arm and its muscle movements on a desk.

This is part of a larger race to develop phone AR. Facebook is pushing to create more content, expanding its Spark AR platform so that more developers can use it. Deep in Silicon Valley, developers are finding more and more ways to improve the software on phones. Additionally, mobile phones are far more accessible than VR headsets, so the business opportunity is much clearer.

The benefits cross between consumers and businesses. For users, sophisticated AR can draw people to their apps, increasing engagement and, potentially, the scope for brand deals. After all, Instagram Stories is widely used by several generations for young people. For businesses, powerful AR can benefit enterprise applications.

By making a solid platform, both companies hope to solve the chicken-and-egg problem of content versus hardware. By having high-quality content, people will be drawn to the service. Therefore, providing powerful tools to make the software can lead to massive benefits to both companies.

Is AR more profitable than VR?

In the end, companies act depending on where they think the money lies. For HTC, that points towards high-end enterprise-level VR headsets, whereas for Google, AR is the way to go. In recent years, AR seems to be a smarter bet.

According to ABI Research, the total value of AR in education will be approximately US$5.3 billion by 2023. While education is not AR as a whole, its a litmus test on its potential; and by this measure, it is a massive market opportunity. It also makes sense; training people by integrating virtual objects in the real world has been proven to be effective. In the military, it has been used for years in flight cockpits as a stream of relevant information.

Facebook recognises the same as well, with rumours that they are developing their own AR glasses. As the quality of eyesight depletes globally, then there is an opportunity for technology companies to offer something which people need. This is a step beyond a sleek phone; it is providing a necessity which millions of people need. Investing in AR glasses is a smart step forward.

At the same time, total revenues from VR in education is expected to grow beyond $640 million. Still significant, but a smaller slice of the pie.

Will Google come back to VR?

Possibly. The company has some fresh content, such as Job Simulator and Tilt Brush, which has legions of fans. Tilt Brush, in particular, has a niche community of passionate artists, and in turn, Google gives gifts to its most dedicated members. While small, the audience is there.

While in deep R&D mode, innovations may grow like weeds and cling to Google. While its partnerships are dying down (such as one with HTC0, new ones may spring in the future. With its focus on AR, Google may also be building on its Google Glass and making the next stage of AR glasses.

But for now, Google is focusing on AR. While VR fans may be disappointed, it is a sound business decision while they explore possibilities. In any case, HTC and Oculus are ready to continue the headset fight.


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Tom Ffiske

Editor, Virtual Perceptions

Tom Ffiske specialises in writing about VR, AR, and MR across the immersive reality industry. Tom is based in London. 

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