By WallStreetDaily.com

The first cell phone, the Motorola DynaTAC 8000X, hit store shelves 33 years ago.

Measuring 13 x 1.75 x 3.5 inches and weighing 28 ounces, the DynaTAC 8000X was an absolute beast of a phone.

No wonder it’s forever memorialized in popular culture as the “brick phone.”

Carrying an equally hefty price tag of $4,000, Motorola’s brick hit store shelves with a resounding thud on March 13, 1984.

The first week of sales were miserable.

Worse yet, the brave souls who bought the DynaTAC 8000X mostly hated it. (The chief complaint was a battery that lasted for about an hour.)

Immediately, the vultures began circling. And when Motorola’s first quarter of sales came in soft, the “overhyped” cellphone revolution was deemed a bust.

Of course, as history proves, 99.99% of the country missed a “rocket ride” aboard the most important innovation of our generation.

And oh how quickly we forget…

The same erroneous mindset is now plaguing the virtual reality (VR) industry.

VR headset sales are falling short of expectations, and suddenly analysts are out for blood.

But don’t be fooled by the anti-VR rhetoric.

Let me explain…

Time to Cut the Cords…

VR still faces a number of barriers to full commercial adoption.

And a major hurdle is the amount of equipment required to enjoy the VR experience.

Right now in order to use the upper echelon of VR devices, you need a peripheral device to provide all the computing power.

For instance, a PlayStation VR headset can’t be used by itself. You need a PlayStation 4 to power it. And the Oculus Rift headset requires a high-end computer to function.

So whenever you try to enter a virtual world, you’re literally tethered to the real world.

Not ideal when VR is all about an immersive experience.

Similar to the giant brick cell phones, mass adoption won’t occur until the technology is streamlined, portable, and affordable.

And the next generation of virtual reality devices promises exactly that.

Get ready for wireless headsets, seamless controls, and much sleeker form factors.

When these next-gen devices launch, you’ll find me waiting in line at a major retailer — along with hundreds of other consumers.

True Immersion is Coming

True virtual reality is a very complex technology, requiring deep interaction with the user’s brain to become realistic in all but the simplest simulations.

And granted, the currently virtual reality experience can be underwhelming, especially after a few repeated immersions in the medium.

But it’s important to note that the first primitive virtual reality headset for consumer use was introduced by Sega in 1991. We are thus only 26 years into VR development.

Compare that to the timeline for the film industry — a much simpler technology with far less subtle interactions with the human brain.

The first motion pictures were issued in 1894. After 26 years, in 1920, movies were still silent, jerky, and monochrome. There were also mainly short, without fully developed storylines.

As an art form, movies were not taken seriously.

There is thus much more to be done — probably over several decades — before VR has reached its full development.

In the short term, it will need a higher “refresh rate” and better graphics cards. That simply requires a few years of Moore’s Law to take hold.

And further advancements in “Augmented Reality,” in which we stay in our own universe but have information about its contents flashed before us, will help spur VR development in the coming years.

The most difficult problem to solve is leg movement.

VR users must remain stationary. With a VR headset on, you can’t see where you’re going. So any real movement could result in the user crashing into real-world walls.

The problem is, that makes most VR experiences disorienting. It also diminishes user experience, since you can’t feel fully “present” in a different world if you’re standing still.

In the very long term, a working brain-computer interface will make VR completely seamless and utterly immersive. Using the movie analogy, we are probably still 20 years from a VR equivalent of “Gone With The Wind.” But it’s coming.

Blame Marketers, Not Gamers

VR’s failure to launch so far is being blamed on the technology’s limited appeal. It’s just a niche product that only excites gaming fanatics goes the argument.

Hogwash!

The sluggish sales out of the gates isn’t an indictment on the technology’s ability to captivate the masses. It’s a result of minimal marketing.

Anticipation of the Oculus Rift, Sony PlayStation VR and HTC Vive ran so hot — for so long — that the companies felt no need to massively promote the product launches. And they didn’t.

Go figure, there’s a direct correlation between marketing spend and sales volumes.

With Microsoft recently doubling-down on VR efforts and virtually every major tech company funding VR divisions, I don’t expect them to keep making the same mistake.

It’s not just going to take more marketing, though. It’s going to take more targeted marketing.

As it stands, most consumers think of VR as a fun, gaming experience — and nothing more.

Sadly, they’re largely oblivious to the technology’s wide-ranging applications in education, training, entertainment and healthcare, to name a few.

Long-time readers know that we’re keen on the healthcare potential for MindMaze — a four-year-old company that combines virtual reality and motion capturing with neuroscience. The goal is “to help victims of stroke, amputation, or spinal injuries regain motor function faster than with traditional physical therapy.”

Once they get a clue, sales volumes should increase notably from the amazingly small base.

Or more simply, we’re still early in the growth curve here.

So stay the course. The VR tech trend — and, in turn, the investment opportunity — is most definitely not dead!

Ahead of the tape,

Louis Basenese
Chief Investment Strategist, Wall Street Daily

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