Why 2016 Will Be the Year of Virtual Reality Companies

Virtual reality has been a science fiction pipe dream for decades.virtual reality companies

Inventors first attempted to produce virtual reality headsets in the late 1980s and early 1990s. The efforts were short-lived and ultimately doomed by the lack of technological sophistication at the time.

That is all about to change, and this change will mark a huge shift in the $220 billion consumer electronics industry and our daily lives.

Growing Rift

First, some context.

The big catalyst that makes 2016 the Year of Virtual Reality is the release of the Oculus Rift virtual reality headset. We have known about Oculus Rift since 2012, when Oculus VR founder Palmer Luckey launched a Kickstarter campaign to raise the funds necessary to build the early models of the product.

Oculus Rift is a head-mounted display, or what’s known as an HMD. When you picture someone in a science fiction movie putting on a virtual reality headset and then reaching out to touch objects that aren’t physically present, you’re picturing an HMD.

Facebook (NASDAQ: FB) recently began accepting pre-orders for Oculus Rift, which is due to be released in the final days of March and will sell for $599.

Oculus Rift is certainly not the first HMD, but it is going to be the one that you hear about and maybe even purchase for yourself.

That’s because Facebook bought Oculus VR for $2 billion back in 2014 – and you can bet Facebook will flex its marketing muscle to get this product into the hands of consumers.

More Than Fun and Games

The original virtual reality fantasy was for gaming, allowing users to fully immerse themselves in a “world” rather than simply a screen. For video games with an “open-world” map that allows gamers to explore an entire region, virtual reality seems like a perfect application.

But virtual reality and virtual reality companies are so much more than gaming.

GoPro (NASDAQ: GPRO) has produced two different camera assemblies for shooting virtual reality footage.

One features 16 GoPro cameras facing outward in a circular array. It’s capable of shooting 360-degree ultra HD video. The second array features six cameras arranged in a cube. It’s capable of shooting spherical video.

Both of these arrays feature video stitching software that syncs the footage together to make editing a breeze. It’s technology that GoPro gained via the acquisition of Kolor in 2015.

GoPro has also developed a partnership with Google holding company Alphabet (NASDAQ: GOOGL) to distribute virtual reality content. Though Alphabet doesn’t currently have a virtual reality HMD on the market, it has been working on Google Cardboard, a low-cost alternative to an HMD that allows a user to slide his smartphone into a cardboard frame and use it as a rudimentary virtual reality HMD.

I can assure you that GoPro isn’t investing in virtual reality camera arrays and content distribution because it wants to get involved with video games. Instead, it wants to use its small, tough and high-quality cameras to bring you action sports and much more in ways you’ve never seen before.

Even now you can view virtual reality videos on YouTube, though the experience isn’t nearly as cool on a computer screen as it is with a smartphone or HMD, where you can turn the device to rotate the camera’s perspective.

Ad Advantage

Virtual reality is an advertiser’s dream.

I recently explored the inside of the new all-electric Chevy Bolt thanks to a video that popped up on my Facebook page. Imagine “traveling” to faraway places by putting on a headset and seeing them in high-definition and being able to look around and explore the area.

Virtual reality could also change the way we interact with technology in general. Imagine showing up to work and putting on your virtual reality headset instead of staring at a set of screens all day.

Virtual reality is coming, and the release of Oculus Rift is the spark that will ignite this industry. Facebook, Alphabet and GoPro are all poised to win big, but there will be others. Gaming companies, chip manufacturers, advertising agencies … the list goes on.

2016 will be the Year of Virtual Reality, and this brave new world of visually immersive content will change the consumer electronics industry forever.

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Published by Wyatt Investment Research at