Why XR will not fail

You might have heard that Extended Reality (XR)—the umbrella term for virtual, augmented, and mixed reality—is struggling to live up to the hype. In the post-COVID landscape, the industry has faced significant financial hurdles, and lately, the tech world's attention has been almost entirely consumed by the rapid advancements in AI.

However, these short-term obstacles shouldn't overshadow the long-term potential of XR. In fact, I believe 2025 will be a pivotal year, as the industry begins to fully capitalise on the convergence of XR and AI.

This post will explore three key factors that demonstrate why XR will not fail: the growing acceptance of wearable technology, the transformative power of artificial intelligence, and the intense competition among major tech players.

Wearable technology

The growing acceptance of wearable technology is a crucial factor for XR's future. Consumers are increasingly comfortable integrating technology into their daily lives, as seen with the widespread adoption of:

• Fitness trackers which collect biometric data like heart rate and activity levels that can be used to personalise XR fitness experiences;
• Smartwatches which already incorporate features like mid-air gesture support and haptic feedback that are relevant to XR interactions;
• Hearables such as the Airpods Pro 2 which are essential for delivering immersive spatial audio to enhance XR experiences;
• Smart glasses which are showing a significant increase in popularity (as demonstrated by the Meta Ray-Ban partnership's success in Europe)

This growing comfort with wearables paves the way for wider adoption of more advanced XR devices like AR glasses, and the expectation is they will seamlessly integrate with other wearables (such as smartwatches for input and hearables for audio) to provide even richer and more personalised experiences.

Advancements in AI

Advancements in artificial intelligence (AI), particularly in computer vision and machine learning, are crucial for enhancing XR experiences. AI-powered object and people tracking, similar to the technology used in Amazon Go stores, is rapidly making its way into XR devices:

• Quest 3 showcases many different advancements now possible in XR. Leveraging improved computer vision and machine learning, it offers highly accurate hand tracking, Inside-Out Body Tracking (IOBT) for full-body motion capture, and Generative Legs for lower body estimation. Critically, it also features advanced room and object scanning capabilities for more seamless interaction with virtual content in real-world spaces.
• Apple Vision Pro revolutionises user interface interaction by combining precise eye tracking with intuitive hand gestures. The system tracks where the user is looking, allowing them to select elements simply by gazing at them. Subtle hand movements, such as pinches, flicks, and swipes, then provide the input for actions like clicking, scrolling, and navigating menus. This combination creates a natural and effortless way to interact with virtual content.

Beyond these examples in headsets, smart glasses are also incorporating a wider array of sensors. Sensors in the bridge of the glasses can be used to understand what is distracting the user, and inward-facing cameras can monitor aspects of health such as eating and sleeping patterns, potentially aiding in mindfulness and well-being.

NLP (natural language processing) enables seamless communication in virtual meetings by providing real-time translation of conversations, breaking down language barriers and fostering global collaboration. Smart glasses now have virtual assistants that can understand your natural language requests, such as 'Remind me to buy milk when I pass the grocery store' or 'Show me the fastest route home.' NLP makes these personalised and context-aware interactions possible

Generative AI models are empowering users to create dynamic and personalized XR content. Snap Spectacles provide a compelling example, allowing users to describe a scene or object—like 'a carrot jumping on a trampoline'—and then use generative AI to create a corresponding 3D model directly within the XR experience.

As AI technology matures, and even more advanced sensors are developed, XR devices will gain a deeper understanding of and interaction with both the physical world and the user themselves, opening up new possibilities for both immersive experiences and practical applications.

Healthy Competition

Healthy competition is a powerful driver of innovation in the XR industry. This competition is further intensified by the growing interest in spatial computing, which is attracting significant investment and driving companies to develop innovative hardware and software solutions.

Apple, Google, and Meta are all now heavily invested in developing use cases like productivity, immersive entertainment, and enhanced communication to attract consumers.

• Apple, with visionOS, is focusing on a tightly integrated hardware and software ecosystem designed for these specific experiences, leveraging its existing content library through Apple TV.
• Google, with its Android XR ecosystem and various software services, is aiming to provide the underlying platforms and tools that will enable these experiences across a range of XR devices, including both headsets and glasses.
• Meta is primarily focused on developing the core AR/VR hardware and platforms, as demonstrated by research projects like Aria (focused on near-term advancements) and Orion (exploring long-term HUD-based AR experiences), with a clear desire to establish its own operating system.

Several key partnerships are shaping the XR landscape:

• Samsung is collaborating with Google on hardware;
• Meta is working with Microsoft on software and Lenovo will build hardware with Meta's software HorizonOS;
• Apple has partnered with Disney and ESPN for content.

The strength of existing ecosystems, such as Apple's established content library and Google's Android platform, will undoubtedly draw users into the XR space. Meta's integration of its existing social media platforms with its XR offerings also provides a unique advantage. The variety of approaches, leveraging existing ecosystems and forming strategic partnerships, further fuels innovation in the broader XR space.

Other Hardware & Software Trends

Beyond these key trends, several other factors are contributing to a strong foundation for XR's future.

• The development of processing power is crucial, with dedicated chipsets such as Qualcomm's XR2 Gen 2 and AR2 and Apple's R1 demonstrating significant investment in specialised hardware. The emergence of MediaTek?as a competitor, with potential partnerships with major XR players like Meta, further strengthens the hardware ecosystem. Powerful GPUs?for both XR devices and PCs that drive high-end VR experiences are being driven by Nvidia, whilst their CloudXR?platform enables streaming of high-fidelity XR content to a wider range of devices, increasing accessibility.
• We are seeing significant improvements in device form factors. Devices are becoming smaller and lighter, making them more comfortable for extended use. Design considerations, such as external batteries (allowing for lighter head-worn components) and comfortable straps (facilitating comfortable use even when reclining), are also contributing to improved user experiences.
• Divergence between glasses and headsets is creating distinct product categories with specific use cases. This differentiation allows for devices optimised for either indoor or outdoor use, catering to a broader range of applications for specific contexts.
• Dedicated content creation tools for XR like Unity?are making it easier for developers to create XR experiences. Godot?also offers the option to develop in VR, allowing for a more immersive development process. Further democratising XR development, companies like Snap?and Niantic?are also investing in no or low code solutions to open up XR creation to a wider audience.

Conclusion: XR will not fail

While the XR industry faces its share of challenges, the evidence for a positive future is compelling.

• The increasing comfort with wearables is creating a receptive audience for XR devices, laying the groundwork for wider adoption.
• Advancements in AI, particularly in computer vision, machine learning, and NLP, are enabling more immersive, intuitive, and personalised experiences, transforming how we interact with digital content and the physical world.
• The healthy competition between major players like Apple, Google, and Meta, each with their unique strategies, partnerships, and ecosystems, is driving rapid innovation in both hardware and software.
• This momentum is further supported by the development of processing power, reduction in the form factor, acceptance of glasses vs headsets, and increasingly accessible content creation tools.

These converging trends suggest that XR has the potential to fundamentally change how we live, work, and connect, offering a compelling vision of the future.

Please let me know if you believe I have missed anything, and for more XR and Spatial Computing insights follow Chris Burgess .

#spatialcomputing #XR #VR #MR #AR