Opinion: Virtual reality will be a trillion-dollar marketplace within five years — here’s a good example why


I’m sore from playing on my Oculus Quest 2 over the past couple of weeks.

This new virtual reality headset from Facebook
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is still blowing my mind — even more so since I last wrote about it two weeks ago. We’ve ordered our third, because my wife wants her own.

I can’t believe that virtual reality has already enabled me to look at a real-time stock portfolio and charts while listening to Spotify
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watching an NFL game and streaming a Netflix
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documentary about space. I found an app on Oculus that lets you run a real-time multi-screen control of a Mac or PC. It even comes with a virtual keypad.

As you can see from the low-res screen shot of my activity below, there’s a lot you can already do on this thing, and it’s only the second pitch of the first inning in what I call The Virtual Reality Revolution.


(Photo: Cody Willard)

To be clear (unlike that photo), it’s still not easy to control those screens or type inside the Oculus headset in this cutting-edge “Immersed” app, but you can see that it’s close to ready for prime time. Give it another year or two, and I can’t imagine how many of you will be working daily, or at least occasionally, in a VR setting.

You know I’m always trying to get in front of the next, most obvious — but just burgeoning — trillion-dollar market place. Welcome to VR.

If you consider that Oculus is probably worth no more than maybe $20 billion-$30 billion (Facebook is worth $776 billion, so Oculus might account for about 5% of that value), and Kopin Corp.
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and a few other pure-ish plays on VR are worth a few billion dollars, we’re talking about a marketplace that Wall Street has totally overlooked.

Facebook is now positioned to dominate this industry, and unless Sony
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or Alphabet
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or somebody big gets serious about catching up to what appears to be a critical-mass lead, a lot of these VR spoils are likely to end up Facebook’s. Can Oculus’ hardware, software, platform and store generate enough value to move the needle for such a large company? The answer is yes — the leading VR platform will easily be worth several hundred billion dollars.

Before I go, I have a Deep Thought for you: I took as a screen shot on my iPhone while I was livecasting the video stream of what I was seeing in my Oculus Quest headset. What you’re seeing is a derivative of reality that is, at least, five or six levels away from reality. “Virtual Derivative Reality” is perhaps what this working environment inside the VR headset should be called. It will be a trillion-dollar marketplace within the next half decade.

Cody Willard is a columnist for MarketWatch and editor of the Revolution Investing newsletter. Willard or his investment firm may own, or plan to own, securities mentioned in this column.



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