The $1.06 Billion Industry with True Potential

This article published with permission from InvestmentU.com.

Forget the airplane tickets and vacation selfies. Family getaways are about to go virtual.

At least, that was the theme of Marriott International Inc.'s "Travel Brilliantly" ad campaign in September. Using virtual-reality booths powered by Facebook's Oculus Rift virtual-reality headset, the hotel chain invited guests to step into different worlds. The London skyline and Hawaiian beaches were just a couple of destinations on the virtual menu.

The 8-city tour highlighted the growing possibilities of virtual reality and the effect it could have on other industries. Data analysis firm MarketsAndMarkets estimates the virtual reality industry, along with augmented reality, will be worth $1.06 billion by 2018. But there’s more to the fledgling VR market than that.

Imaginary Worlds, Real Profits

It may just serve as an exciting marketing gimmick, but the benefits of virtual reality are becoming serious investment fodder. It’s why Facebook acquired Oculus in July for $2 billion. And its benefits are becoming apparent, especially in the travel industry.

“We feel there’s limitless possibilities with this technology,” Marriott spokesperson Sara Steffenauer said. “In the future, it could be a way for people to test out their destinations before they book their travel.”

Thus far, virtual reality has been a niche dream of hobbyists and gamers. As technology has improved, tech heavy-hitters have taken notice, too. That includes Samsung, which partnered with Oculus to develop the consumer-oriented Gear VR headset.

When released, the Gear VR headset will turn a Galaxy Note 4 cellphone into a nexus point for virtual worlds.

Samsung’s not the only big-name company putting dollars behind VR projects. Sony Corporation is also gunning for future VR profits with its own system, Project Morpheus. Like Samsung, Sony reps haven’t said exactly when the headset will be released.

But when it does, it will have a direct effect on the $21 billion video game industry.

Phil Spencer, the head of Microsoft's Xbox division, publicly acknowledged that the company is also investing in a VR system.

More Than Gaming

While much of the VR industry chatter involves games, virtual reality is also being eyed by the movie industry. In an interview with Reuters, Iribe said virtual reality can be used to drop viewers into movie landscapes.

Movie companies, including Walt Disney Co. and Twenty-First Century Fox, have already expressed interest. If it catches on, VR could find an important place in the $11 billion U.S. film industry, or even global ones, like the $2.7 billion Chinese film market.

On a (Slow) Roll

Analysts expect the first consumer-level VR headsets to hit shelves in about two years. Today’s early models simply aren’t refined enough for mass production.

Current VR video displays have a tendency to cause motion sickness and overheat. Some simply don’t have enough computing power. But VR is on its way. And it will bring more than just interactive movies to eyeballs. For example, 3D Systems Corporation recently bought out 3D surgery simulation company Simbionix for $120 million. It seems there may even be room for VR in the U.S.’s $3 trillion healthcare industry.

Once the fledgling VR market hits its stride, industries will change. As the only company with a rough market offering date of 2015, look to Samsung to lead the pack. But for an industry that’s still on the drawing board, it’s still anyone’s game.

The information contained in this article should not be construed as investment advice or as a solicitation to buy or sell any stock. Nothing published by Physician’s Money Digest should be considered personalized investment advice. Physician’s Money Digest, its writers and editors, and Intellisphere LLC and its employees are not responsible for errors and/or omissions.