The reality of AR/VR business models

April 2016

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There is nearly as much confusion as there is excitement about Augmented and Virtual Reality. While VR could be big and AR could be bigger and take longer (VR $30B and AR $90B for combined $120B AR/VR revenue by 2020), there are more questions than answers out there. Business models are one of the big questions, and AR/VR hardware sales, eCommerce sales, adspend and mobile data/voice could drive over 80% of all AR/VR revenues. Things might look a little different to what you expect.

Digi-Capital ARVR Business Models

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AR/VR investment hits $1.1 billion already in 2016

March 2016

Digi-Capital AR-VR investment Q1 2016 to date

Augmented Reality and Virtual Reality investment reached $1.1 billion in the first 2 months of this year. This is the first time that AR/VR investment has topped a billion dollars in any year (let alone 2 months), and shows incredible growth compared to the $700 million invested during all of 2015. (See analysis of last year’s investment here)

Nearly $800 million came from the monster Magic Leap round, but another $300 million went into AR/VR solutions/services, VR hardware, advertising/marketing, distribution, video, peripherals, apps and games. Even without Magic Leap, investment is up 20% in Q1 2016 compared to the $250 million invested in Q4 2015. Plus there’s another 4 weeks left for investors to boost AR/VR this quarter.

Some of the other investments in 2016 so far include:

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