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Report - The VR/AR Opportunity by Newzoo

Ben Walshe
Ben Walshe
April 9, 2019
4 minute read time.

Having just attended GDC 2019, I finally understand why augmented reality (AR) games are so much fun. I never got into anything that hit the mainstream gaming market like Pokemon Go, but at Google's booth they had a square area that was completely empty during their setup. It caught the eye immediately as you travelled down the escalator into the Moscone Convention Center in San Francisco, as their booth was right below it. On the day of the Arm booth setup I was intrigued about what it could be. I saw a few staff floating around Google's booth on the way back to the escalator, and I worked up the courage to go ask. Quick as a flash they had the Pac Man + smartphone combo in my hands. It turns out that my surroundings had been turned into a maze, and I was now Pac Man. Reflected on the big screen beside the walking area was the full iconic Pac Man map. Before I knew it, I was collecting pellets, fruit and running from ghosts for a full 20 minutes. When I finished, I looked around to see a queue of people had formed waiting to play the game.

The thing I always failed to realise about these AR style games is just how fun and immersive they are. For 20 minutes I darted around the area avoiding the killer ghosts. I didn’t notice the people watching me, or probably how stupid I looked had the big screen not been mirroring my movements. AR gaming could be a game changer in the same way that the Wii was a game changer for consoles. You are only limited to your imagination and your surroundings, which for developers opens up a world of opportunities.

The new reality for mobile gaming - the AR/VR opportunity

The new Arm-commissioned report from the market intelligence agency Newzoo explores immersive experiences in mobile gaming, before delving into the current landscape for AR and virtual reality (VR), and future opportunities involving these technologies for mobile gaming. At this point, I don't think we need another explanation on the differences between AR and VR. However, the report proves that the key trends and outlook for both these markets are really interesting, but different at the same time. As Arm's Ian Pilkington noted in his Android Authority article, VR has a number of challenges and limitations on mobile, whereas AR appears to have 'boundless potential'.

Chart consumer spend on mobile games in 2021

The mobile gaming industry is the fastest growing segment in the gaming industry.

By 2022, the AR/VR market size is predicted to be $192.7 billion, with a significant part of this market growth likely to be driven by gaming. Since 2016, there have been significant investments into AR. In addition to Apple’s investment in ARKit and Google’s into ARCore, over $6 billion has been raised by AR/VR businesses in 2018, with the largest investments going to AR companies. These software development kits are relatively new and improve with each release. This means developers and companies alike are still learning how to best develop for AR.

Going mainstream

VR and AR both have massive potential in gaming, but maybe with a different audience focus. VR gaming is most likely to be enjoyed by high-end PC users, whereas AR has far more potential for mainstream success through mobile. Over 2,000 apps mention ARCore or ARKit on their respective application stores. Of course, we all know the main game that brought the AR trend to mobile. Pokemon Go has been sensationally popular since its release on mobile in July 2016. It's mopped up over 10 times the revenue of the second place game, and a staggering 100 times over the third place game. Showing that with a well thought-out, social and fun game, AR has fantastic potential.

Highest revenue AR Games

Pokemon Go has been incredibly successful

Moving away from gaming, Microsoft’s recent HoloLens 2 is specifically target at businesses, but the use of a Qualcomm Snapdragon 850 processor in the hardware shows that the limitations of tethered cables are being lifted by the increasing power, performance and battery life of Arm-based mobile devices. Who knows, you might even find yourself in a job where a Hololens might be used, be it a production line, or in protective training situations. At the same time, the development of the HoloLens 2 and consumer wearable devices (check out Ian Pilkington's insight on future AR wearables from CES 2019) show how hardware innovation for AR is accelerating at a rapid rate. Being able to support this innovation with engaging content will be crucial for the future success of AR and VR.

Enough of the talking. You can download the report below to gain a further insight into what the challenges for AR and VR are, and the opportunities that are available in both areas when it comes to game development. 

Download Newzoo Report

Anonymous
Mobile, Graphics, and Gaming blog
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