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VR will be big but AR will be four times bigger by 2020, says Digi-Capital

Tim Merel's looking into the future at #PGCSanFran

VR will be big but AR will be four times bigger by 2020, says Digi-Capital

Despite virtual reality seemingly dominating the conversation in mobile, gaming, and tech spaces, Tim Merel - founder and MD of Digi-Capital - believes the future (and the money) is in augmented reality.

The reason lies in the broader markets and applications for AR compared to VR.

In his Pocket Gamer Connects San Francisco 2015 talk, Merel said that VR can only be used in stable "controlled environments" because of the nature of the headsets.

On the other hand, AR can be used anywhere, because the technology isn't invasive or obstructing.

Additionally, VR use is limited mostly to console and PC games, 3D films, and other niche enterprises.

These are still large markets, with tens of millions of users, but compare that to AR, which extends to smartphones and tablets in terms of application and could thus rake in hundreds of millions of users, in markets beyond just entertainment.

AR can be used anywhere, because the technology isn't invasive or obstructing.

Advertising, the internet, video streaming, business, social media, and more all have the potential to embrace AR tech, according to Merel.

Show me the money

On the revenue side, Merel said that in the medium term, this would result in a much larger market for AR.

"In the next year, VR is going to lead, probably going into 2017, but as technology advances, we're expecting AR to become much larger and occupy about 80% of the market by 2018," he said.

In financial terms, Merel reckons that by 2020, this will see an VR market (games, hardware, film, theme parks etc) of $30 billion, while AR (AR hardware, eCommerce, data, voice, film/TV, enterprise, adspend, consumer, games etc) will be worth $120 billion.

As far as general games software revenue, Merel forecasts a jump from $88 billion in 2015 to $110 billion by 2018.

For mobile games revenue, that's from $29 billion in 2015 to $45 billion by 2018.

"We think that iOS will actually end up being in the minority of revenues for developers globally by 2018," said Merel.

Staff Writer

Chloi games, and Chloi writes, and at some point she made the dangerous decision of merging the two. Now she spends her time formulating words about weird games she finds, playing Dark Souls, and also playing Dark Souls.

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