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Could India shape the future of immersive AR, VR technology?

The fusion of India's diverse talents and AR, VR technology can serve as a catalyst for unprecedented growth and technological supremacy

An attendee tries a virtual reality (VR) headset during the Vibrant Gujarat Global Summit in Gandhinagar, Gujarat, India, on Thursday, Jan. 11, 2024.
An attendee tries a virtual reality (VR) headset during the Vibrant Gujarat Global Summit in Gandhinagar, Gujarat, India, on Thursday, Jan. 11, 2024. (Bloomberg)

It's 2024 and Spielberg's imagination on screen has come to life. The last few years have been all about ‘imagination tech’, straight out of shows and movies like The Peripherals and Free Guy. Imagination has been a key driver of innovation, from the rise of artificial intelligence (AI) to the metaverse, and now spatial computing.

Let’s zero in on the case in point. Remember the movie Spy Kids 3-D: Game Over, where the toymaker designs a wearable device to augment reality itself into a game? It’s happening now, and it’s happening fast. To date, Meta, Sony, and Pico have been leaders in the field, with Apple most recently stepping into the arena with its new Vision Pro device.

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Augmented reality (AR) and virtual reality (VR) have been around for some time and had several false starts. However, today we have come a long way from these being fringe technologies to becoming the next big thing and being leveraged across industries for various industrial and entertainment purposes. According to a report by Statista, the global AR & VR market is estimated to reach $38.6 billion in 2024, and is projected to grow at a rate of approximately 10% CAGR. In 2024, these technologies are being used to improve surgical outcomes, provide safety training to heavy machinery operators, train Formula 1 drivers, provide immersive gaming experiences, and many other applications.

For the gaming population of the world, AR and VR are offering a deeper level of emotional connection, transforming players from passive observers into active participants in interactive narratives via what VR natives call a sense of “presence”. Despite the bulky tech and challenges of VR, we are seeing a curiosity about VR games with green shoots of consumer adoption translating into real revenues, for example. In addition to Beat Saber, recently The Walking Dead video game crossed $100M in revenue with VR as a primary platform.

Beyond pixels: Where gameplay becomes reality

The gaming sector in India is booming. With a market size projected to reach $7.5 billion by FY28, India has rapidly established itself as a global hub for consuming and creating world-class games. The demand for engaging gaming experiences is at an all-time high with a rapidly growing smartphone user base and a young, cheap data, and tech-savvy population.

The lines between pixels and perception are blurring faster than ever before. VR and AR are crafting unparalleled experiences, transporting players from flat screens to hyper-immersive landscapes. Games like Beat Saber, The Walking Dead and Half-Life: Alyx showcase the immersive potential of VR, while Pokemon Go and Niantic's AR offerings famously demonstrated how AR can seamlessly blend the virtual and real, creating captivating experiences and socio-cultural phenomenons.

VR and AR are also fostering a new era of social interaction. VRChat has hundreds of thousands of users interacting together in virtual environments. Multiplayer VR games allow players to connect with friends and strangers across the globe, forging digital bonds in shared virtual worlds, like in Ready Player One.

However, the possibilities extend beyond pure fun and games. For instance, Indian startups like AutoVRse have worked on cutting-edge technologies that enabled experiences like worker safety training for heavy industries and enterprise use cases. AutoVRse recently launched their SAAS product “Vrse-Builder”, which is a suite of technology products that will allow enterprises to create, manage, and deploy VR use cases seamlessly at scale, with a focus on safety and process training for heavy industries.

Ultratech Cement, India's largest cement manufacturer, has already used this product and tech stack to upskill over 18,000 factory workers in 8 months. VR is being leveraged as a key technology to provide credible alternatives to offset manual training which can often cause physical injury, costly mistakes and physical harm on oil rigs, nuclear reactors, heavy industries and replacing the need for expensive simulators. Additionally, they have built an internal state-of-the-art “skunkworks" gaming lab, which innovates to create real-time, multi-player VR experiences and finetunes concurrency and latency to improve the enterprise product.

As an early-stage venture capital investor, we see more and more innovative use cases emerging across the gaming and interactive media landscape with companies leveraging frontier technologies in spatial computing, mixed reality and VR to build from India, for the world.

Salone Sehgal is founding general partner at Lumikai.
Salone Sehgal is founding general partner at Lumikai. (Courtesy: Lumikai)

Rocky road but a massive opportunity for India

The VR/AR revolution, while blazing with potential, navigates a nascent terrain filled with challenges. Hardware limitations can still be restrictive, with earlier headsets often bulky and expensive, deterring mass adoption. Although more recent lighter headsets are addressing this problem at a rapid pace. Access to consistent high-speed internet, affordable pricing and technical literacy may constrain mass adoption. Overcoming these obstacles lies not just in technological advancements but in efficient technology implementation and a commitment to inclusive design.

The Indian government, recognizing the immense potential of AVGC, has established the Animation, Visual Effects, Gaming, and Comics (AVGC) Promotion Task Force. This crucial step paves the way for supportive policies like tax breaks for VR/AR development, talent-skilling initiatives, and the creation of a dedicated VR/AR support infrastructure. Imagine dedicated VR arcades popping up in metros and tier-2 cities, democratising access to immersive experiences.

India’s exploding interactive media landscape

India's interactive media landscape is transforming. This transformation transcends mere demographics – India's burgeoning gaming market, comprises 568 million gamers, has the second-largest number of online gamers in the world and already clocks in more revenues than the Indian box office. Gaming has evolved to become a cultural phenomenon and captured the current zeitgeist of a young demographic who are digital natives.

Gaming is a vast and deep industry, with its reach and influence spanning several industries. Globally, gaming technologies often act as a vanguard of innovation and seed creative exploration into pushing the boundaries of technology to real-world use cases. For instance, Hong Kong International Airport leveraged Unity’s game engine to develop a digital twin of its main terminal to plan construction, streamline operations and simulate passenger footfalls.

VR technology, originally developed for gaming, was used extensively during the production of James Cameron’s Avatar: The Way of Water to help the filmmakers visualise and design the film's complex environments and characters. Unreal Engine, originally created by Epic Games, is already being used by real estate developers in Australia and the US to accelerate urban master planning via its “V2i Realtime” portfolio of tools.

These possibilities make it ever more important for India to recognise the far-reaching implications of gaming as an industry which can be instrumental for technological supremacy. As India embraces digital transformation, with its vibrant, dynamic entrepreneurial community, robust start-up ecosystem, strong technology talent, thriving gaming culture and first principles thinkers, it has the potential to play a pivotal role in shaping the future of immersive AR and VR technology, not just for itself, but for the entire world.

This approach not only promises to bolster India's position as a global tech leader but also offers a pathway to enhance education, healthcare, and various other sectors, bringing a profound positive impact on the lives of its billion-plus inhabitants. The fusion of India's diverse talents and AR/VR technology can serve as a catalyst for unprecedented growth, inclusivity, and prosperity.

Salone Sehgal is founding general partner at Lumikai, India's first gaming and interactive media VC fund. The views expressed are those of the author.

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