Categories: Stock Market
Topics: Alternative Investments

Investing in VR & AR Stocks in 2023

Virtual Reality & Augmented Reality   

Investor Focus: Accelerated Growth Ahead in the VR/AR Marketplace

Virtual Reality (VR) and Augmented Reality (AR) are two of the most talked-about technologies in recent years… a trend that’s poised to accelerate in the coming decades. 

These technologies have been widely adopted in various industries including gaming, entertainment, education, healthcare, and military, among others. 

In this Special Report, we’ll take a close look at VR and AR — their applications, advantages, and challenges. 

We’ll also explore ways to invest in Virtual Reality stocks and Augmented Reality stocks. 

Let’s start with Virtual Reality. 

What is Virtual Reality (VR)?

Virtual Reality (VR) is a computer-generated simulation of a three-dimensional environment that can be experienced through a headset, usually with a screen or screens that cover the user’s eyes.

VR headsets are equipped with sensors that track a user’s movements allowing them to interact with the virtual environment. 

VR can create a fully immersive experience that simulates the user’s physical presence in a computer-generated world.

Applications of VR:

VR has been widely adopted in the gaming and entertainment industries where it allows users to experience and interact with virtual worlds. 

Virtual Reality also has advanced applications in the field of education where it provides an immersive learning experience for students. 

VR can also be used to simulate dangerous and hazardous situations, which can help in training emergency responders and military personnel.

Perhaps most intriguing, VR is also being used in the healthcare industry for treatment of patients with anxiety disorders, phobias, and PTSD and, as well, to help train medical professionals in various procedures including surgical.

Put plainly, the potential of VR is truly limitless due to its incredible reach across an array of industries. 

Concerns in the VR space:

Of course, with every innovative technology there exists challenges.

One such challenge that I can personally relate to is the potential for motion sickness — also known as cybersickness — while using VR. This is especially true in the over-50 crowd along with those who already suffer from acute or mild dizziness or motion sickness. 

Another potential hurdle is the cost of the hardware required to experience VR. The average price of a VR headset in the United States is around US$430… and then there’s the added cost of games, consoles, etc. 

There are also concerns about the long-term effects of using VR such as headaches, eye strain, anxiety, and other health and cognitive issues. 

One such concern that’s worthy of discussion is VR sexually related content — aka, VR sex. It’s already a reality… which raises concerns regarding the potential negative consequences it could have on individuals and society as a whole.   

Some of those concerns include: 

• Addiction: As with any type of addiction, VR sex can become a compulsive behavior that leads to negative real-life consequences such as social isolation and neglect of real-life relationships, work, and other important aspects of life.
• Objectification: VR sexually related content can promote objectification and normalization of unrealistic sexual expectations, leading to negative impacts on an individual’s self-esteem and body image.
• Increased risk of sexual violence: Some experts suggest that exposure to VR sex could increase the risk of sexual violence by reinforcing harmful gender stereotypes and promoting non-consensual behavior.
• Legal and ethical concerns: There are also legal and ethical concerns regarding the creation and distribution of VR sexually related content, particularly involving access by minors and/or non-consenting individuals.

Similar parallels can be drawn from VR games that include violent themes, including first-person shooter games. 

A number of steps currently being taken to limit these potentially negative elements in VR games include:

• Content rating systems: Similar to traditional video games, VR games are rated by content rating systems that provide age-based guidelines for appropriate content. Of course, these are just guidelines. 
• Industry-wide guidelines: Industry organizations, such as the International Game Developers Association (IGDA), have developed guidelines for VR game developers to promote ethical and responsible game development practices.
• Self-regulation by developers: Some developers have taken steps to self-regulate their VR games’ content by avoiding graphic or gratuitous violence and sexual content.
• Enhanced user control: Many VR games offer options for players to adjust the level of violence or sexual content or to turn off such content entirely.
• Increased oversight by regulators: Regulatory bodies such as the Entertainment Software Rating Board (ESRB) and the Federal Trade Commission (FTC) have increased oversight of VR games, ensuring compliance with industry guidelines and content rating systems.

It is important to note that the effectiveness of these measures depends on the willingness of developers, regulators, and players to adopt and enforce them. 

Ultimately, responsible game development and consumer awareness and education are essential components of limiting sexually explicit and overtly violent themes in VR games.

Next up is Augmented Reality or AR. 

What is Augmented Reality (AR)?

Augmented Reality (AR) is the integration of digital information into a user’s real-world environment. 

The main difference between AR and VR is that AR uses a real-world setting while VR is completely virtual. AR users can control their presence in the real world while VR users are controlled by the system. 

Or put another way, AR enhances a user’s real-world environment by providing additional information and digital content while VR provides an immersive experience that simulates a user’s physical presence in a fully computer-generated environment. 

And while VR requires a headset device, AR can be accessed via smartphone, tablet, or smart glasses. 

Depending on the type of system being used, the hardware’s camera scans a user’s surroundings and then seamlessly overlays digital information onto that person’s real-world environment.

AR relies on sensors to understand the environment around it and can be used to enhance the user’s experience by providing additional information or digital content.

Using a combination of GPS, accelerometers, and gyroscopes, AR apps can figure out the exact location of the user, including which direction they’re facing.

From there, the technology can superimpose digital content on top of the real world setting.

Applications of AR:

AR has advanced applications in the entertainment industry where it allows users to interact with digital content in the real world. 

As just one example, movie-goers can visit a simulated world inside a theater that transports them to their favorite films. Rather than passively watching a movie, viewers can explore detailed 3D sets, communicate with characters and objects, and experience the environment as if they were actually in the film.

Music festivals such as Coachella are currently collaborating with AR companies and 3D software developers to enhance the concert-going experience for not only the people at the festival but also for those watching from home. 

And similar to VR, Augmented Reality is also used in the field of education where it can provide an interactive learning experience for students.

It’s also used in the healthcare industry to provide medical professionals with real-time information during surgical and other procedures.

AR Concerns:

Just like VR… there are many challenges in the world of Augmented Reality. 

One of the major challenges of AR is the limited field of view. AR requires a clear line of sight to the digital content, which can be challenging in certain environments. 

Another challenge is the accuracy of the digital content overlay, which can be affected by the lighting and other environmental factors.

Taken altogether, VR and AR are transforming a number of industries. And while there are still challenges to be overcome, these technologies have the potential to revolutionize the way we live, work, and learn… especially for the younger generation. 

Investing in VR and AR stocks: 

For investors, the potential for stock market gains in the rapidly emerging VR/AR space is robust. 

The VR and AR markets are expected to grow significantly in the coming years as a result of increased demand across the gaming, entertainment, healthcare, and education industries. 

Combined, the VR/AR market is projected to grow from US$37B in 2022 to US$115B by 2027. 

As one might expect, the VR/AR landscape is presently dominated by a handful of large-cap players, including:

Meta Platforms (NASDAQ: META): The social media giant behind Facebook owns Oculus VR, a leading VR hardware and software company. Oculus produces the Oculus Rift and Oculus Quest headsets and has a strong presence in the gaming and entertainment industries, which ties in neatly with Zuckerberg’s metaverse world. 

Sony Group (NASDAQ: SONY): The multinational conglomerate produces a range of electronics including the PlayStation VR headset — a popular choice for gamers. 

Alphabet Inc. (NASDAQ: GOOG): The parent company of Google owns Google Glass, an AR headset that was originally marketed to consumers but has since been targeted towards enterprise applications.

NVIDIA Corporation (NASDAQ: NVDA): The hardware giant’s GPUs are used in many VR applications, and the company is also developing its own VR technologies such as VRWorks and Holodeck.

Apple Inc. (NASDAQ: AAPL): Apple’s ARKit platform is used by developers to create AR applications across a wide range of industries for Apple devices. 

Microsoft Corporation (NASDAQ: MSFT): Microsoft produces the HoloLens AR headset, which has applications across numerous industries including healthcare, education, and manufacturing.

Snap Inc. (NASDAQ: SNAP): Snap is the social media company behind the Snapchat app, which offers a host of AR features including filters and lenses. Snap is also expanding into other industries with AR functionality such as gaming and e-commerce.

Vuzix Corporation (NASDAQ: VUZI): On the smaller market cap side, Vuzix is a manufacturer of smart glasses, which are used in a range of industries including healthcare, logistics, and manufacturing. The company is also expanding into the consumer market with its Blade AR smart glasses.

In Closing... 

The VR/AR market is expected to grow significantly in the coming years and decades with various industries adopting these technologies. 

Investment in the VR/AR market is substantial with tech industry leaders such as Meta, Sony, Alphabet, NVIDIA, Apple, Microsoft, and Snap investing heavily in the space. 

The VR and AR hardware market is expected to grow at a compound annual growth rate (CAGR) of 27.6% from 2022 to 2028, driven by increased demand from various industries including gaming, entertainment, healthcare, and education. 

The VR/AR software market is also on pace for substantial growth over the coming years and decades. 

All of this adds up to the potential for lucrative gains in the space as these technologies become an increasing component of everyday life.

If you’re older, like me, you sort of understand that these technologies are mostly a younger generation thing… but, of course, that’s where the vast majority of today’s trends are set.

In other words, you don’t need to strap on a VR headset and trip all over your furniture to participate in the immense “non-virtual” gains that are surely ahead in the VR/AR investment landscape.
 

Mike Fagan
Editor, Daily Profit Cycle