These arcades offer familiar activities like bowling, bike racing machines and the ever-popular air hockey. But in recent years, many have expanded their lineup with VR ‘4D’ rides that simulate roller coaster experiences.

Overall, the feedback about these VR rides is quite disappointing. Customers complain that the jolts and twists of the roller coaster hit your body first, with the VR visuals lagging two seconds behind — shattering any sense of true immersion, leaving you wanting your money back.

Such shortcomings highlight the challenges facing the broader immersive market in India, which is still developing. Significant barriers like limited consumer awareness, infrastructure challenges and relatively low penetration of high-end AR/VR hardware exist. This is one of the reasons why Apple didn’t luanch Vision Pro in India.

Local Firms Focus On Affordable Innovation

Local companies aren't interested in directly competing with premium brands like Meta or Apple, as those companies are competing at a different level of product and price.

“Such projects (like Apple Vision Pro) require extensive research and development, and significant capital investment, along with the ability to abandon them if they fail to find a market fit. Given how rapidly technology is evolving, it’s more practical to develop products like the Meta Quest, which strike a better balance between pricing and technology and have already demonstrated strong market potential,” Satya Molugu, Managing Director and founder of India’s leading AR/VR manufacturing company Irusu, told The Secretariat.

Affordability remains a big issue. For example, Meta Quest 2 would cost somewhere between Rs 30,000 and Rs 40,000. Whereas a JioDive headset would cost anywhere between Rs 900 and Rs 1,200.

“We are focusing on delivering more value to our consumers, removing high cost entry barriers and also through our XR (Extended Reality) Apps, which most of them are free to use with our VR devices,” said Molugu.

XR is an umbrella term that covers all technologies like AR, VR and MR.

Irusu offers a range of VR products and accessories aimed at both casual users and enthusiasts. Their VR headsets, such as the Irusu Play VR Ultra and Monster VR, are designed for smartphone compatibility and immersive experiences, with prices ranging from Rs 999 to Rs 3,999. Definitely not as eye-watering as, say, an Apple Vision Pro which costs approximately Rs 2,87,000. 

Of late in India, AR/VR has tickled the fancy of segments beyond gaming, driven by its rising adoption in education, retail and healthcare. Revenue projections for the next five years in India are on an upward trajectory, fueled by growing demand for AR and VR hardware. 

One of the biggest challenges of Indian companies remains competing with Chinese manufacturers, who have state-of-the-art production facilities and years of experience in building such products. 

“Bringing that level of expertise into Indian manufacturing requires us to work with unorganised vendors and streamlining them to meet our standards, which is a significant challenge. Keeping costs low while producing something that’s better than Chinese alternatives adds another layer of complexity,” explained Molugu. 

But, Molugu remains optimistic even as India’s hardware ecosystem remains in early stages. He believes significant strides are being made in software development and building application ecosystems. 

With the right mix of strategic partnerships and increased investment in hardware R&D, Molugu believes India is well-positioned to develop a competitive, advanced AR/VR product in the near future — one that could mix affordability with innovation.

AI Fueling Global Immersive Market

The global market for immersive headsets is expected to grow steadily in the coming years, thanks to improvements in AI, better screens, faster processors and improved tracking. While shipments are projected to drop by 1.5 per cent in 2024, the market is set to bounce back with a 41.4 per cent growth in 2025, due to new tech and more affordable options, as per International Data Corporation (IDC).

“We believe AI will complement, rather than replace AR headsets. Headsets provide a more immersive and dedicated experience, while AI phones may offer more casual, on-the-go AR interactions. In the foreseeable future, AR headsets will continue to offer deeper, more engaging experiences that mobile phones simply can’t replicate,” Molugu commented. 

“Even though the growth curve is going down, it’s still in the black and continues in double digits. It is slowing, because the base is also growing. New and more affordable MR options will drive 2025, while 2026 will see more ER launches,” said Jitesh Ubrani, research manager of Worldwide Mobile Device Trackers, at the IDC.

Worldwide shipments of AR/VR headsets continued to decline in Q2 of 2024, falling by 28.1 per cent year-on-year to 1.1 million units. Despite challenges like high prices and excess inventory, Meta led the market with a 60.5 per cent share, followed by Sony, Apple, ByteDance and XREAL. 

New MR headsets like Quest 3 and Vision Pro have enhanced quality, but high prices are still a challenge. Expected affordable models from Meta could help boost sales. AR headsets are also anticipated to experience significant growth, though not as rapidly as MR.

Rumour has it that Apple may launch a cheaper version of its Vision Pro in 2025, with whispers suggesting its US$ 3,500 price tag could be slashed by half.

VR shipments are projected to decline slightly, suggesting a potential shift in consumer preferences towards more immersive MR and AR experiences.

Although the immersive segment hasn’t been able to garner as much excitement as, say, a new model of the iPhone or Samsung S series, but in the long haul, that might be a possibility.

“On a long enough horizon, AR glasses will start replacing phones. There already are many uses for AR/VR, where phones are a perfectly adequate solution and will continue to improve. However, we still foresee phones and headsets working together in the near-mid term,” said Ubrani.

In many workplaces, it’s not uncommon to see one headset being used for an AR/VR experience, while other employees enjoy the same experience on their phone or tablet, he added.

Many AR features — filters, lenses, games — are already integrated into apps like Snapchat and Instagram. AR is also helping people’s shopping experiences — for example, letting users virtually try on sunglasses or a t-shirt before making an online purchase.

“While AR began on mobile phones and will likely remain on these devices for some time, we foresee that within the next decade, mobile phones themselves may become obsolete. In their place, we expect to see far more advanced wearable XR (Extended Reality) devices that combine both AR and VR functionalities, offering seamless integration of the digital and physical worlds,” said Molugu.

Innovation For The Sake Of Innovation?

Despite flashy tech, the biggest issue that persists is the limited usefulness of AR/VR hardware. This is one of the reasons why consumer demand remains low. Many see these products as gimmicks driven by Silicon Valley’s nostalgia, and need to maintain stock valuations.

Also, scepticism remains high as critics argue that smart glasses solve no real problems and raise privacy concerns, such as doxxing through facial recognition.

And herein lies the rub: Who exactly asked for this? Because it seems no one did.

(This is the second and last instalment in a two-part series exploring whether AI glasses can push AR/VR beyond niche markets. Read Part 1 here: https://thesecretariat.in/article/ai-immersive-glasses-still-a-hard-sell-in-the-real-world)