Augmented Reality (AR), Breaking, Business, Entertainment, Gaming, Mobile, News, startups, Virtual Reality (VR), Wearables

Perkins Coie Survey Reveals Obstacles to VR and AR World

Talk about the expansion of VR and AR content is great but the question beckons… How big is the access to funds needed to accelerate the production of VR/AR content? Perkins Coie tried to provide an answer with the survey among industry executives. The survey reveals some interesting, if not troublesome signs. Perkins Coie LLP is a legal firm providing a full array of corporate, commercial litigation and intellectual property legal services. It was ranked #42 among the highest-grossing U.S. legal firms and named one of the “100 Best Companies to Work For” for 14 consecutive years by FORTUNE magazine, 2003–2016.

They teamed up with Upload VR, one of VR community drivers (read: co-working space, network mixer between entrepreneurs and VC’s and one of the leading VR news sites). The survey results show the most significant obstacle among a range of challenges facing AR/VR, shown in these two questions:

What is the biggest challenge facing the AR/VR industry as a whole?

  • Inadequate content offerings (37%)
  • Consumer and business reluctance to embrace AR/VR innovation (23%)
  • Technological limitations (20%)
  • Other (9%)
  • Lack of financing (5%)
  • Regulation and legal risks* (4%)
  • Reluctance of mobile carriers and other device manufacturers to partner on AR/VR solutions (2%)

Which of the following legal risks are of concern to your company in developing AR or VR technology or content?

  • Technology and IP licensing (19%)
  • Product liability / health and safety issues (18%)
  • Intellectual property infringement (16%)
  • Consumer privacy / data security (15%)
  • Compliance with platform requirements in publishing content (14%)
  • Rights of publicity* (11%)
  • Export control issues (8%)

At the same time, over two thirds of all AR/VR startup founders (80%) identified the lack of an established market as the greatest concern they hear from potential investors. You can also watch the 360 degree video on YouTube:

“Just as content was the fuel that launched many successful technology products, our respondents clearly believe that high-quality and robust content is key to moving the AR/VR industry forward,” said Kirk Soderquist, Co-Chair, Interactive Entertainment practice at Perkins Coie. Larger consumer base dictated 89% of respondents to say VR and smartphone manufacturers will focus on developing mobile VR technologies in the next two years. In terms of the sectors expected to see the most investment directed to AR/VR technology or content in the next 12 months, results are quite interesting:

  • Gaming (78%)
  • Movies and Television (40%)
  • Live events (34%)
  • Education (30%)
  • Healthcare or medical devices (24%)

“While most of the buzz has been around VR, particularly in gaming and 3D films, AR is expected to gain further traction in the years ahead,” said Don Karl, Co-Chair of Interactive Entertainment, Perkins Coie. “Respondents completed our survey before the Pokémon GO phenomenon, but already saw the potential for AR to attract a larger number of consumers by combining the virtual and real worlds and offering more practical uses and low-cost games and apps.”

In addition, two-thirds of respondents expect the AR market to surpass VR in revenue, with 82% saying it will take at least three years. Respondents were also asked to identify specific obstacles to mass adoption of AR and VR technology.

  • User experience (e.g., bulky hardware and technical glitches) was the greatest challenge cited for both VR (38%) and AR (35%).
  • Cost is a challenge for VR (35%) and AR (25%).

When surveying the potential investors in the space, 22% expect to make investments between $6-10 million over the next year – a range that was selected by no investors for the previous 12 months – showing that the market is slowly moving from angel and seed stage to a more mature Series A level. “Still, the survey results reinforce that many of the funding rounds for startups are still relatively small,” said Jason Schneiderman, Partner, Perkins Coie Emerging Companies & Venture Capital Law practice.

To view the complete report, visit: