The key to unlocking mainstream demand for all forms of immersive reality applications – whether virtual (VR), augmented (AR) or mixed reality (MR) – is widely expected to be the emergence of fifth-generation (5G) networks offering more reliable connections, faster bandwidth and lower latencies. What’s more, those applications can be delivered to smartphone screens via the cloud, specialized wireless headsets, or even edge computing devices, to handle the number crunching, bring latency down even further and increase performance, particularly for 3D rendering and multiplayer gaming environments.
While AR overlays digital imagery onto the real world, VR immerses a user in an imagined or replicated world common to 3D games. MR, on the other hand, defines where physical and digital objects co-exist in real-time. Collectively all three are often included under the umbrella term extended reality (XR).
5G bandwidth is expected to offer data speeds of anywhere from 300Mbit/s to 1Gbit/s initially, but outdoor tests conducted by Mitsubishi Electric and NTT DOCOMO in Japan have achieved up to 27Gbit/s. Sub-5 second latencies will eliminate any lag that might negatively impact or interrupt gameplay or user interaction making XR a far more seamless experience for participants.
It’s not just slow 4G networks which have held back mainstream XR adoption to date, however. A lack of low-cost headsets, smartphones and titles have also proved handicaps, with the power needed to run graphically intensive titles not coming cheap. For the best XR experience, devices need to have strong image display and audio capabilities – a minimum of 2560×1440 resolution for example, as well as powerful CPUs/GPUs, large complements of RAM and good battery life – something that few affordable devices currently offer.
In its report Ready, steady, game! Is AR the next level of gaming published last year, telecommunications infrastructure provider, Ericsson, concluded that a smartphone or tablet would not be acceptable to AR/VR gamers for much longer. Rather, it expects participants will come to prefer alternatives such as AR glasses that provide better graphics and a more immersive experience and that can also be worn in public, without drawing too much attention.
The way that 5G networks are architected too should prove a catalyst by enabling cloud-hosted titles to stream game footage to end-user devices rather than expecting the local client hardware to do the hard work. That should drastically reduce the total cost of ownership (TCO) involved in VR gaming in terms of the equipment the player has to buy before (s)he can participate, dramatically expanding the potential user base in certain regions of Asia (for example) where disposable incomes are low.
In its Cloud AR/VR whitepaper published in April 2019, the GSMA sets out its vision for cloud-hosted systems, concluding that telcos and mobile network operators (MNOs) will have a pivotal role to play in driving large scale adoption of XR not only by providing the connectivity and infrastructure to enhance the experience, but also acting as content aggregators and discovery platforms.
Forecasts by investment bank, Goldman Sachs, estimate that the provision of AR/VR related hardware, software and services will grow into a market worth just under US$30bn in 2019 to reach US$95bn by 2025, led by gaming which represents around 27% of the total, and followed by live events (9%), entertainment (8%) and retail (4%). IDC’s predictions are more cautious, suggesting global AR/VR spending will be worth no more than US$19bn in 2020, though still up a healthy 78% in 2019.
Whatever the numbers turn out to be, the APAC region is tipped to lead much of that activity in terms of both innovation and end-user demand – China alone is expected to spend US$5.8bn on AR/VR in 2020 according to IDC.
State-owned telco China Unicom is already partnering with online entertainment company iQIYI to make the most of that opportunity, with plans to establish a 5G research and development centre dedicated to testing AR/VR devices and applications as well as optimizing network infrastructure for delivery. iQIYI is also working with China Telecom and China Mobile to develop VR ecosystems that span film, television, gaming, social network and interaction.
Following trials last year, NTT DOCOMO plans to launch an 8k VR event streaming service over its 5G network in March this year . The new service will offer pay-per-view access to sports events, theatre and music productions, enabling users of 5G smartphones and VR headsets to watch by choosing their own 360-degree camera angle in real-time.
SK Telecom in South Korea has developed a similar 360-degree live VR broadcasting service, while Japanese telco KDDI is partnering with Facebook (which owns the Oculus Go, Rift and Quest headsets) to develop a real-time VR/AR-enabled sales system that allows customers to use computer-generated images to see how they look wearing selected cosmetics and clothes on their smartphones before they commit to buying.
Softbank too is collaborating with 3D intelligent avatar developer ObEN to develop prototype VR based social and communications software destined to enhance the live shows and sporting events it broadcasts over its network using the Oculus Go VR headset, while also playing games.
The key for telcos and MNOs looking to monetise AR/VR delivery is to align their applications, content and services to mobile phones or link them directly to 5G networks rather than see them tethered to PCs or other static devices over which they have no control. However, an alternative approach from HTC sees the Chinese smartphone manufacturer set to launch a 5G hub which effectively acts as a mobile hotspot (as well as a media streaming device and digital assistant) that promises to stream VR content directly to the Vive Focus headset. That too could give telcos and MNOs a route into monetizing AR/VR content delivery within the home broadband market, where subscriptions and add-ons are paid conveniently through direct carrier billing (DCB).
With the combination of fast, reliable 5G connectivity, affordable client devices and a library of compelling titles and content to choose from, choosing the right billing platform will be instrumental to the success of device manufacturers and game developers looking to find buyers in multiple countries in Asia and further afield.