A review of where the virtual reality market is and what's happening with the key players (Oculus, Microsoft, Sony and HTC). A view on the implications for marketers and their content and storytelling strategy plus a explanation of the mass market opportunity that exists today in 360 video through YouTube.

1. Here comes Virtual Reality! What’s
happening & the impact for marketers
July 2015

2. With E3 now behind us, we felt it
would be useful to review where the
VR offer really is and what it means
to marketers over the next few
years .
We have had the chance to
experience the bleeding edge of
virtual reality and see how the
games industry is pushing the frontier
of VR/AR, embracing this new format
in story telling.
Where VR is heading should be of
interest to all marketers as they think
about their content, story telling &
marketing strategies.

3. Oculus, the re-creator of the VR industry
were showcasing their first consumer Rift at
E3 & also providing a first look at the latest
innovation, Oculus Touch.
Sony have been building their VR story
around PS4 with Project Morpheus and at
E3 offered hands-on experience.
Microsoft are in VR in a couple of ways.
With their announced enabling partnership
with Oculus (taking in Xbox) as well as their
own offer, HoloLens.
HTC were conspicuous by their absence
from E3.
Over the next few pages we provide a
quick snap shot of their offers.
Key players in the VR space
Oculus
Ri)
Sony
Morpheus
Microso)
HoloLens
HTC
Vive

4. Facebook owned Oculus pretty
much kickstarted the virtual reality
industry back into life and since then
have showcased a number of
d e v e l o p e r m o d e l s a n d
demonstrations (DK1, DK2 and
Crescent Bay) as well as its wireless
partnership with Samsung in the form
of the GEAR VR.
This E3 was different however, hot on
the heels of the San Francisco press
conference this was the first chance
to really see the Rift in action along
with its Xbox controller and desktop
motion monitoring device. More
importantly it was a chance to get
hands on with the Rift gaming
content.
oculus

5. Oculus Rift requires a high-end PC
with enhanced graphics cards
(Nvidia GTX 980) and therefore if you
are not a hardcore gamer you’re
probably into a c. £1,000 investment
for a PC to power the Rift.
There were a number of great titles
a v a i l a b l e t o t r y i n c l u d i n g
EVE: Valkyrie, Edge of Nowhere,
Lucky’s Tail and Chronos. For us
EVE: Valkyrie was the standout
example of the realised potential of
VR gaming, a completely immersive
experience where you fly a heavily
armed space fighter and dogfight
your way around the galaxy.
oculus
Eve:
Valkyrie
gameplay

6. Oculus Touch was the first demo of
Oculus’s new style “input device”.
Two handheld controllers which fit
naturally and snuggly put your hands
& gestures into the VR space. They
were truly impressive, feeling
absolutely natural and allowing one
to point, thumbs up, flick and catch
without a second thought.
Inside the demo we were able to
play in the “sandbox” experience
pushing toys around, shooting ray
guns and catapults, not to mention
the shrink ray which suddenly made
the user a few inches tall.
oculus

7. What was shocking about the
experience was the total immersion;
having been lucky enough to try a
few VR demos in the past, this was
the first truly 100% total immersion.
The room we were standing in, the
controllers, the headset were all
forgotten as the VR space was
explored with another person (who
could have been the other side of
the world), enjoying the space
together, socially, totally free of the
world we’d been in moments
before.
20 minutes felt like 2 as we played
together and explored the VR
environment.
oculus

8. Morpheus works on the PS4 and
utilises all its graphic and gaming
capability and will, we suspect,
quickly take it to its limits.
The Morpheus headset is a futuristic
looking glowing white visor complete
with LED details which works as part
of the head tracking system.
At E3, Sony’s Project Morpheus
experience used a slick app based
booking system to gain access to
the experience.
Sony Morpheus

9. In-game control is through the PS4
controllers and also through the
wireless “Move” controllers where
the game/experience permitted.
Putting users hands into the game
but without real gesture.
A number of game experiences
were on offer at E3 including London
H e i s t : G e t a w a y a n d R i g s :
Mechanized Combat League - both
first person shooters and impressive
along with softer experiences (tech
demos) such as Summer Lesson.
Sony Morpheus

10. Microsoft’s foray into VR/AR (aside
from providing some deep
integration with Oculus through
Window 10 and Xbox Live) takes the
shape of the HoloLens.
Microsoft showcased it on stage at
their Xbox briefing at the beginning
of the week, showing a compelling
Minecraft demo where the presenter
was able to see his Minecraft game
come to life on the table in front of
him and then play with other users
within the space, seeing the game in
a completely new way.
Microsoft HoloLens

11. The live experience for HoloLens was
linked to the Xbox mega title, Halo5.
HoloLens is AR rather than VR and
allowed the user to see the real
environment through a perspex visor.
The virtual (digitally crafted images
and experiences) overlaid onto the
real environment along with a
convincing audio layer.
At E3 as one walked through the
Halo5 briefing centre the imaginary
commander from the game
instructed and directed players
through the physical space as well
as the game objectives. Glorious 3D
maps prepared you for a foray into
Halo5.
Microsoft HoloLens

12. Microsoft HoloLens
The HoloLens experience was unlike
anything experienced before and
provided a holographic wire-framed
type view of content.
Importantly this experience was an
augmentation with the real world,
wonderful things happening in the
spaces people are familiar with and
as such was a unique experience.
One that will no doubt develop with
more content and hardware
developments.
HoloLens still feels very experimental
and at an early point in its
development cycle. We are looking
forward to seeing more in the
consumer space but suspect this is
going to be some way off.

13. HTC’s Vive product, created in
partnership with Steam is due to be on
sale in late 2015 and therefore was
surprisingly absence from E3.
The early demos have been extremely
well received. Vive will give players the
chance to move around their physical
room, interrogating the virtual
environment they are in (assuming they
have the physical space to do so). It will
also provide input through handheld
controllers.
No news isn’t always bad news but
there does seem to be a lack of
i n f o r m a t i o n c o m i n g t h r o u g h
surrounding the content & game titles
that might appear with it debut release.
HTC Vive

14. The key take out from all the
demonstrations on show at E3 is that
VR has certainly arrived and over the
next 2-3 years will really start to move
into the household and become
part of people’s gaming and video
consumption at home.
Aside from the platforms outlined
here, there are at least another 10
developing.
It is fair to assume that by the end of
2016 there is likely to be an installed
base in the region of 1-2 million units
and that this figure is likely to grow
three fold during 2017.
VR & AR all around

15. Gaming will be the
driver for this adoption
closely followed by
film.
Ridley Scott is reported
to be previewing a VR
short as part of his
Martians release at the
end of this year and
there are numerous
reports of studios
planning to use VR to
preview/tease films in
2016.
VR & AR all around

16. The impact for marketers
VR is teetering on the edge of
becoming a major new story telling
medium through CGI and pure film
content.
The market is going to grow fast with
the focus of the big players, Oculus,
Mircosoft, Sony and HTC and there is
no doubt that millions of VR
consumers will be ready, willing and
able to step right into and interact
with the developing narrative from
2016.
By 2018 there could be as many as
10-15M VR users worldwide.

17. The impact for marketers
Ahead of that 360
o
video is going to
gain massive traction and provide a
much lower tech entry point (via an
enabled mobile device). Leaders
such as RedBull & Bjork are already
exploring the medium.
YouTube recently opened up its
platform to 360
o
and Facebook will
opening up feeds to 360
o
very soon.
With Youtube now drawing over a
billion users, 360
o
video represents a
fantastic way to learn and leverage
immersive story telling within a
mainstream audience.
Subscribe to our slideshare channel
for our guide to 360
o
video which will
be released shortly.

18. To date brands have successfully
used VR as part of their experiential
activity (Mercedes recent activation
at Goodwood or TopShop’s virtual
catwalk at London Fashion Week).
Now is the time to start creating
mobile and at home storytelling
experiences that can catch the
immediate wave of 360
o
video as
well as the developing VR consumer
audience.
Begin to reimagine and articulate
your brand’s story into an immersive
mobile experience that will then
t r a n s i t i o n i n t o t h e a m a z i n g
possibilities that VR offers as the
installed base develops.
Start now; immersive story telling VR /AR & 360
o
video

19. A communications agency for the
Experience Age
Creating ideas and telling stories that will travel
within a mobile-connected, experience-hungry
audience. From idea to execution.

20. Contact
Richard or Chris @ Fundamental London
+44 207 193 9199
hello@fundamental.london
www.fundamental.london