Augmented and virtual reality are the new hotness, as VCs and corporates get in on the act. While Facebook’s multi-billion dollar acquisition of Oculus got everyone’s attention early last year, it’s only in the last 12 months that investments accelerated.
The current bubble debate has polar opposites with Bill Gurley saying we’re in the middle of a tech bubble, and Marc Andreessen saying there’s no such thing. Tech adviser Digi-Capital’s new Mobile Internet Report Q3 2015 shows that the mobile market sided with Bill in the last quarter. Mobile internet stocks were down 15.7% in the 12 months to Q3, and the average valuation dropped in Q3 from $9 billion to $8 billion for the 105 mobile internet unicorns.
Digi-Capital has completed the first technical benchmarking across AR/VR head mounted displays (“HMD”) globally, and would like to thank the AR/VR CEOs and CTOs who made this possible. No single company achieved best-in-class across all benchmarks, and some lesser known companies achieved some of the best scores. There are almost as many approaches as there are systems, with engineering tradeoffs depending on target market and application. In terms of market readiness, VR is ahead of AR today.
There 26 benchmarks across 7 critical success factors of mobility, vision, immersion, usability, flexibility, wearability, and affordability. The full benchmarking gets into the technical weeds, so highlights are below. Remember, these are individual best-in-class benchmarks from different companies’ products, so don’t expect them in a single magical device just yet.
The first 9 months of the year were brutal for games deal makers, with total deal value (i.e. dollars) across investments, mergers and acquisitions (M&As), and IPOs down 82% on last year. Of that decline, games investments fell the least at 35% below last year, games M&As deals dropped 74% and the games IPO market evaporated.
It’s been party time for mobile, with massive growth and disruption helping VCs to raise huge funds, entrepreneurs to raise massive rounds, and valuations to skyrocket. With 89 mobile internet unicorns now worth almost $1 trillion, it’s no surprise that folks from Silicon Valley to Shanghai are asking what’s going on with return on investment (“ROI”). While there are many ways to measure ROI, let’s look at the ratio of exits to investments, the total amount invested, and ROI across all 27 mobile sectors for the last 5 years. The analysis is extracted from Silicon Valley based tech advisor Digi-Capital’s quarterly Mobile Internet Report.