After 20 years of AR/VR innovations, why now is the right time?

The advent of augmented reality (AR) and virtual reality (VR) technologies has ushered in a new era of human-computer interaction. Over the past two decades, the AR/VR market has witnessed substantial growth, reaching a valuation of over $18 billion in 2020. Yet, despite early optimism, widespread consumer adoption has remained elusive.

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As we enter 2025, the landscape for AR/VR is shifting dramatically. Instead of focusing on the mass consumers, the industry is turning its attention towards professional and industrial applications, driven by advancements in usability, accessibility, and reduced costs.

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In the following article, Dirox will explore the specific ways in which AR/VR is being deployed and the future prospects of this transformative technology.

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1. A Brief History of AR/VR Innovations

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AR & VR have been a subject of fascination and innovation for decades. Their potential to transform how we interact with the world and each other has captivated researchers, developers, and consumers alike. However, the journey of AR/VR has been marked by both significant strides and setbacks.

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Early Innovations (200s-2010s)

The seeds of AR/VR were sown in the early 2000s. VR systems at this time were often expensive, bulky, and primarily confined to specialized labs or industries. Nevertheless, pioneers like the Oculus Rift and HTC Vive began to introduce more immersive experiences, sparking interest and anticipation.

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Meanwhile, Google Glass, while premature in its mass market aspirations, demonstrated the potential of AR to overlay digital information onto the real world. These early efforts laid the groundwork for more sophisticated applications to come.

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XR Developments (2010s-2020s)

The 2010s saw a surge in XR (extended reality) development. Companies like Microsoft with the HoloLens and Magic Leap aimed to seamlessly blend virtual and physical worlds, promising a future where AR/VR would become a ubiquitous part of daily life. However, challenges in usability and affordability hindered their widespread adoption.

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Mobile AR, on the other hand, experienced a significant breakthrough in 2017 with the introduction of Apple's ARKit and Google's ARCore. These platforms empowered developers to create a wide range of AR experiences, from fun games to practical tools.

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However, limited monetization options and a lack of killer applications hindered long-term growth. As a result, AR development slowed down, and many companies began to question the long-term viability of the technology.

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From 2020 to 2023, social AR platforms like Snapchat and Instagram emerged as a promising avenue for AR/VR innovation. The COVID-19 pandemic accelerated the adoption of AR/VR as people sought new ways to connect, work, and learn remotely. 

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By integrating AR features into their social media experiences, these platforms demonstrated the potential of AR to enhance user engagement and create new forms of social interaction.

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Despite these advancements, AR/VR innovation has faced a plateau in recent years. As social media platforms increasingly focus on artificial intelligence and other technologies, AR/VR has taken a backseat. While there have been incremental improvements in hardware and software, the industry has yet to achieve the transformative breakthroughs that were once anticipated.

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Looking Ahead: Future Prospects

Despite the current challenges, the potential of AR/VR remains immense. 

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As technology continues to evolve and costs decrease, it is likely that we will see a resurgence of interest and innovation in this field. 

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Whether it is through advancements in hardware, software, or content development, AR/VR has the potential to revolutionize a multitude of industries such as entertainment, education, healthcare, and manufacturing.

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2. Recent Failures from Tech Giants

Despite being a concept once celebrated as the next frontier of the internet, AR/VR have faced a series of setbacks from some of the biggest tech companies. From Meta's ambitious VR push to Google Glass's early demise, these failures highlight the persistent challenges in making AR/VR a mainstream reality.

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Meta's Metaverse Miss

Meta, formerly Facebook, placed a significant bet on VR-driven social experiences, envisioning a fully immersive digital universe. Its metaverse platform, Horizon Worlds, has only a lukewarm user base of around 300,000 monthly active users as of February 2023. High costs, with the Meta Quest 2 VR headset priced at around $400, hardware limitations, and a lack of compelling content have hindered its progress. 

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The ambitious goal of making VR a household necessity has exposed the gap between expectations and the current technological capabilities.

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Google Glass

Google Glass, introduced in 2013, was a pioneer in the AR space. However, it faced numerous challenges, including privacy concerns, limited functionality, and an unclear target audience. The device failed to capture the public's imagination and was eventually discontinued in 2015.

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Apple Vision Pro

Apple's Vision Pro, while praised for its sleek design and high-resolution display, has been hindered by its exorbitant price tag of $3,500. This high cost has limited its appeal to a niche market of early adopters and professionals.

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Apple's pitch for immersive experiences has not resonated with a broader audience, underscoring the ongoing struggle to make AR/VR accessible to the masses. In 2024, Apple is now anticipating only around 450,000 sales, far lower than their first-year target of 800,000. 

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Sony PlayStation VR

Even within the gaming industry, VR has not achieved the widespread success that many predicted. Sony's PlayStation VR (PSVR), despite its initial popularity with 200 games currently available, has faced challenges in maintaining momentum with only over 5 million units sold. Considering the PlayStation 4’s sales of 117.2 million units, PSVR was adopted by less than 5% of the user base.

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Sources have revealed that Sony is cutting funding for VR games with only two PSVR 2 games currently in development. Taking into account the state of the games industry with constant layoffs and studio closings, the prospect of AR/VR as a mainstream pastime is quite gloomy.

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The Road Ahead for AR/VR

The setbacks faced by these tech giants underscore the significant challenges that remain in making AR/VR a mainstream reality.

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While this technology has the potential to revolutionize various industries, it requires significant advancements in hardware, software, and content development to overcome current limitations. 

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As developers and companies continue to refine their approaches, the future of AR/VR remains uncertain, but one thing is clear: the path to mass adoption will be longer and more arduous than initially anticipated. This creates the need to clearly define the risks and opportunities that AR/VR are facing.

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3. A Redefinition of AR/VR Needs: Shifting from Consumers to Professionals

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The initial hype surrounding AR/VR as the next big consumer trend has cooled down. 

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While the potential for immersive experiences in gaming, social interactions, and entertainment is undeniable, the true value of AR/VR lies in its ability to solve real-world problems and enhance professional workflows.

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The focus of AR/VR development is shifting from consumer-oriented applications to professional use cases. Industries that can benefit from immersive experiences and detailed visualizations are increasingly adopting these technologies. By focusing on specific needs and delivering tangible value, AR/VR is carving out a sustainable niche market.

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Architecture and Engineering

In industries like architecture and civil engineering, AR/VR is revolutionizing the way projects can be designed and visualized.

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Architects and engineers can use VR to walk through 3D models of buildings and infrastructure projects, identifying potential design flaws and optimizing layouts.

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For instance, “The architect can render stereo 360 panoramic images directly from the BIM software such as Autodesk Revit or using a visualization tool like Autodesk 3ds Max with V-Ray and publish the images to the web using third-party services like VRto.me or IrisVR Scope,” says Kim Baumann Larsen, an architect and CEO of the AR/VR design and consulting firm Dimension Design.

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On site, AR can overlay digital information onto physical construction sites, aiding in project management and quality control.  AR can overlay digital information onto physical construction sites, aiding in project management and quality control. For example, construction workers can use AR devices to view blueprints and installation instructions directly on the site, reducing errors and improving efficiency.

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Healthcare

In healthcare, AR/VR is proving its effectiveness in all aspects from surgical simulations to therapy.

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Surgeons can practice complex procedures in AR/VR, improving their skills and reducing surgical errors. By offering real-time data overlays that improve accuracy and lower the chance of complications, AR/VR is completely changing surgical operations.

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For instance, 3D models of knee joints, eyes, , and many other parts are available to surgeons. Surgeons even use haptic feedback gloves made possible by augmented reality to mimic the buzzing of saws and drills. All of these help with surgery preparation, analyzing realistic patient models, and accessing current anatomical data and references. It also gives medical staff the opportunity to practice with rare conditions to enhance their expertise.

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A study on medical training found that VR learning results in 80 percent retention a full year after training, while only 20 percent of information is retained only one week after traditional training.

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VR-based distraction techniques can also help alleviate pain and anxiety during medical procedures. Therapeutic VR can divert patients from physical suffering by immersing them in virtual settings, which lowers pain perception and enhances the patient experience overall.

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A study found that VR can reduce pain by up to 50% during medical procedures.

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Education and Training

The Cone of Experience theory, developed by Edgar Dale, states that people retain 90% of what they do and experience, 20% of what they hear, and 10% of what they read. 

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“Doing and experiencing” is what sets AR/VR apart from other technologies. The interactivity of VR allows students to absorb and remember information longer with more accuracy.

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For example, students can conduct virtual experiments, and learn about different cultures in a way that is more engaging and memorable than traditional learning methods.

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Especially, VR-based simulations can provide hands-on training for various professions, from pilots to factory workers. For example, pilots can practice flying planes in VR simulators, and factory workers can learn new skills in a secure and controlled environment, reducing costs and enhancing safety.

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With this shift towards specialized applications,industries are expected to witness AR/VR becoming a useful tool for professionals across various fields, displaying tangible value for niche markets. And as technology continues to advance and costs decrease, we can expect to see even more innovative and impactful uses of AR/VR in the years to come.

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4. A Mature Market: The Road to Stability

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After years of hype and experimentation, AR/VR has reached a point of maturity. Companies now understand where AR/VR can truly shine—by catering to professionals, not the masses. The technology has found its place, supported by advances in both hardware and software, making it more reliable and accessible.

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Refining the Target Audience

The days of expecting every consumer to embrace AR/VR are long gone. Instead, the technology is being refined for professionals in fields where it can add real value.

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Architects, engineers, doctors, and business trainers are now the primary beneficiaries of AR/VR, leveraging its potential to enhance productivity, improve decision-making, and streamline workflows. This targeted approach ensures that the focus remains on practical, actionable outcomes rather than entertainment-driven experiments.

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Design and Usability

The hardware landscape has also evolved significantly. 

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Gone are the days of bulky, uncomfortable headsets. Even though the pursuit of lightweight, compact devices often clashes with the need for high-performance hardware, most of today's AR/VR devices are lighter, more comfortable, and capable of delivering higher-resolution displays and more immersive experiences.

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 This evolution in usability has opened the door to more widespread professional use. Devices like the HoloLens 2 and Magic Leap 2, designed with professionals in mind, combine precision with ease of use, making them suitable for extended periods of wear.

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Cost Reduction and Accessibility

The cost of AR/VR devices and software has also decreased significantly, making the technology more accessible to a broader range of industries. 

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While consumer adoption may have plateaued, businesses are investing heavily in AR/VR solutions, especially for B2B applications, recognizing the potential return on investment in terms of productivity and efficiency. 

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The bigger VR manufacturing grows, the lower the costs become. Additionally, a growing number of affordable software tools and development platforms are empowering developers to create innovative AR/VR applications. As costs continue to decline and the technology becomes more user-friendly, we can expect to see even greater adoption across various sectors.

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The Future of AR/VR

As AR/VR continues to mature, we can expect to see even more innovative applications emerge. The integration of AI and machine learning will further enhance the capabilities of AR/VR, leading to more intelligent and personalized experiences.

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While the consumer market may still be in its early stages, the professional market is thriving. By addressing the specific needs of industries, AR/VR is expected to revolutionize the way we work, learn, and collaborate.

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Conclusion

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AR/VR technology has reached a turning point. 

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The years of trial and error have led to valuable lessons about what AR/VR is truly good for—and where it belongs. Instead, AR/VR has found its true potential in professional industries, from healthcare to architecture. 

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We know the target audience, we know how to design intuitive and effective hardware and software, and we have made the technology affordable enough to drive real-world impact.

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In the next phase, AR/VR will continue to grow in specialized sectors, delivering on its promise to transform how we work, learn, and interact in professional environments.

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The future is not about mass adoption but meaningful application, and that is where AR/VR will thrive!

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Contact Dirox today to learn how AR/VR can leverage your business!

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