The Oculus deal has single-handedly reignited a broad interest in virtual reality, or VR. But as venture capital firms sign checks and engineers and software developers devise systems, the industry must still find exactly what it could sell and who might buy.
The idea of immersive technology that would effectively let users enter a digital world has been around since the 1960s. The concept became more broadly known in the 1980s with the science fiction movie "Tron" and with VPL Research, the first company to sell goggles and gloves that connected to a computer.
The expected uses of VR have been long and diverse. Gaming, of course, but also in such areas as social media and telecommunications to portray body language; fashion to build online shopping experiences; telemedicine and robotic surgery; and education.
And while many of these applications are in current use, most tend to be niche implementations. Many reasons account for that, including the cost of the hardware, the sensation of wearing equipment and an historical problem with VR-induced motion sickness in many users.
But there's also the question of the perceived need for the technology. Want to communicate? You can make a video call over the Internet. Play a game? Millions are apparently happy with social gaming on a smartphone, although many hardcore gamers likely look forward to an ever more complete experience.
Facebook CEO Mark Zuckerberg effectively acknowledged this with a focus on the potential use for "a new communications platform."
After games, we're going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles in your home.The nausea problem is reportedly under much better control, and prices will come down with larger-scale manufacturing. But for the industry to really take off, it'll still have to convince people that they really want and need a VR experience .
For example, Google's Glass goggles have received mixed reviews, including complaints about the product being disorienting and capable of causing headaches.
Still, there can be little doubt that, under the right circumstances, aspects of virtual reality can be big. Look at the popularity of Microsoft (MSFT) Kinect, the fast-selling motion-driven interface for the Xbox gaming console family.
Seeing $2 billion paid for a VR company has whet the appetites of many. Some other startups are getting investment or acquisition offers. The question is which of these companies will see products actually come to market and become popular. New platforms are always coming out. Whether people will suddenly adopt them after decades is yet to be seen.