In the past two years, the metaverse has really been a hot topic, which should thank to the development of technologies such as artificial intelligence, Extended Reality (XR), 5G and so on. Conversely, the increasing popularity of the metaverse has also attracted many tech giants to enter the metaverse space and advance technological developments. Like XR, which has been an high-profile technology recently for it combines VR and AR. 

But now, in the context of cost reduction and efficiency, Internet technology giants seem to be gradually losing patience with the XR industry. The XR business has been "targeted" and has become a lamb to be "cut" because of its high investment, low profitability and long cycle. In the face of the cooling industry situation, what is the next step for XR?

Are Tech Giants Fleeing XR?

The so-called extended reality (XR) is actually a collective term for various new immersive technologies such as virtual reality (VR), augmented reality (AR) and mixed reality (MR).

VR can bring people into virtual environments. AR can superimpose rendered images onto the real world. For example, AR can improve navigation. Compared to 2D maps, augmented reality can superimpose directions on the road that the driver sees through the windshield, allowing the driver to steer accurately based on simulated arrows.MR seamlessly blends the real world with rendered graphics, creating environments where users can interact directly with the digital and physical worlds together.

From gaming to virtual production to product design, XR enables people to create, collaborate and explore like never before in a computer-generated environment. The nature of XR also makes it a surefire way to achieve a metaverse.

Four years ago, Microsoft demonstrated its commitment to the metaverse by acquiring the cash-strapped VR social platform AltSpaceVR. 2021 also saw Microsoft CEO Nadella threaten, "As the virtual and real worlds merge, we are creating a whole new platform layer - the metaverse."

However, in 2022, as Microsoft's XR headset HoloLens development for many years, still slow progress, Microsoft chose to cooperate with Samsung consumer XR project had been met with the anger of internal staff. HoloLens head Alex Kipman also left in June 2022. Not long ago, Microsoft announced that it would completely shut down AltSpaceVR in March this year. according to the verge, the team behind AltSpaceVR will also be laid off. Not only that, but the team behind the MRTK framework, a cross-platform toolkit built by Microsoft to integrate VR\AR experiences, which was scheduled for a new release next month, is also being laid off.

Whether it's hardware or software, the metaverse business can no longer support Microsoft's ambitions. Microsoft's enthusiastic investment in XR has finally broken Microsoft's heart. In addition to Microsoft shutting down AltSpaceVR and scaling back its meta-universe ambitions, other tech majors have made almost identical decisions.

In early January, Tencent's XR business line made adjustments to some of its projects and many businesses were called off, while just six months ago, Tencent poured into its XR business line with the desire to enter the metaverse.

After Tencent, recently, news also came out of Racer that it was going to abandon its VR panoramic video business. Racer's metaverse/panoramic video project leader - Ma Yingwu - also left the company along with it. Recently in the creator's WeChat group, Racer's operation team wrote: "After the mission of Racer's panoramic operation team to help on the horse and send a ride is completed, it will have to say goodbye to everyone." In the future, the creators of panoramic videos on the Racer platform will also be scattered to various categories, and will no longer be given individual support, but will be operated on a "regular basis". But the panoramic video is still in the "newborn stage", and it is probably no different from the abolition of individual support by Racer.

It is worth mentioning that Byte Jump almost simultaneously suspended the access of panoramic video function to Jieyin. The two big manufacturers have cut and delayed one for panoramic video. From Microsoft to Tencent, and then to Racer and Byte, the flameout of XR is visible.

The Cost Performance Issue

In fact, it is not difficult to understand the strategy of the big manufacturers to choose to power the XR industry and then enter the meta-universe, but the problem is that the investment is made, but it does not achieve the desired effect - something that every big manufacturer fears. In other words, the cost performance is the most fundamental reason why the big manufacturers have difficulty sustaining the XR business.

For example, Tencent XR department was established in June 2022, Tencent senior vice president, the actual game business operator Ma Xiaoyi as the general director, Tencent game studio NExT Studios head Shen Li as XR specific business leader. XR department currently has more than 300 people, but a number of Tencent XR employees revealed that XR department from its inception to date, almost The XR department has more than 300 people, but several Tencent XR employees revealed that the XR department has been almost "zero output" since its inception.

The XR department has more than 300 employees, but several Tencent XR employees have revealed that the XR department has produced almost nothing since its inception. At Sina's "Yuanli Awakening" conference in 2022, Ma Yingwu said that on Racer's platform, the number of panoramic video creators is more than 10,000, the number of videos has reached 100,000+, and the number of plays has exceeded one billion.

However, many industry insiders also know it well: it occupies a lot of server resources, but the improvement of experience is far from proportional compared with traditional flat videos. Moreover, for content creators, a set of equipment to support XR live, the earliest calculation requires more than 100,000, even if the price has fallen in recent years, for the average creator, is not a small burden. As netizens wonder, "Short videos for cell phones are fun enough, so why should I spend extra money and time to adapt to a new form of entertainment?"

Moreover, despite the good achievements of panoramic video. However, these achievements should be attributed to the basic technical strength of Racer in the end, not because of the attractiveness of panoramic video itself. User habits have not yet been fully cultivated, and relying on panoramic video for cash to support revenue is also full of uncertainty.

In fact, since the "first year of VR" in 2016, "cost performance" has become a big problem for the whole virtual reality industry: for enterprises, input and output are often difficult to be proportional; for consumers, it is often thousands of dollars in both East Asia and Europe. For consumers, in both East Asia and Europe and the United States, the PC VR headset can easily cost thousands of dollars, as well as the budget requirements of at least the same high-performance PC host, all potential VR enthusiasts are discouraged to try; plus even at the expense of buying the equipment, the complete experience requires at least 3 square meters of space to install Outside-In positioning device site requirements, and a considerable part of the VR concern has dampened the enthusiasm.

You know, any emerging technology products, only across the commercialization of the divide, in order to really get the public's acceptance, detonate the market, and become the impact of the next ten years, or even twenty, fifty years of disruptive innovation category. This means that for any technology products, it is not only to do in the product hardware easy to use, comfortable experience, but also need to break through the original product scene boundary, so that it really becomes a "broken circle" products.

But now, for VR, AR and MR, they do not have the ability to "break the circle", and there is still huge room for improvement in terms of cost performance.

The Commercial Era Is Not Yet Coming

It is undeniable that today, the entrance to commercialization of metaverse has been opened, however, various technologies under the concept of metaverse, such as XR track, are still some distance away from the real commercialization era.

On the one hand, the supply of key technologies and high-end products is insufficient. Taking virtual reality as an example, the standard system of virtual reality devices is not perfect, and the product and system evaluation index system is not yet sound, in addition, there is no standard specification for the performance and quality of virtual reality products, and the compatibility between hardware, system and content is poor. Since the standards between virtual reality devices and between devices and applications have not yet been established, industry-level virtual reality hardware and software standards as well as standards for logo resolution, data exchange and secure communication between industrial Internet devices and products have not yet been introduced, therefore, industry application parties still lack trust in the large-scale use of virtual reality products.

Among them, only on the improvement and optimization of display performance, VR equipment to achieve the ideal performance of large field of view, high definition (PPD) and lightweight and compact at the same time under the existing technical conditions still exist technical difficulties.

For example, to achieve the retina screen effect of VR display, the unit angle pixel density to reach 60PPD, in order to ensure this parameter, but also to achieve the normal human 110 degrees and above the field of view, the means used is the use of optical lenses to enlarge the field of view, in the small space of VR equipment, basically equal to about 2 inches of display components to achieve more than 6K level of total horizontal pixels.

In addition, a more superior display, computing, communication performance, requires higher energy consumption, whether part of the performance in the local or cloud, computing power and communication capacity to improve the need for more energy consumption.

On the other hand, there is a lack of content and services, and the application ecology is not perfect. Explosive and benchmark applications that can meet consumers' needs have not yet appeared, and consumer-oriented virtual reality development content lacks cashing channels, which has not yet formed a good industrial ecology and positive cycle. In terms of industry application, the existing application cases are mostly customized solutions, there is no clear industry application idea, and there is no condition for large area popularization in the industry, and the progress path of multi-industry integration application is not clear.

Obviously, some current secondary but very critical, and will directly affect the user experience, and then determine the user's willingness to use the problem, such as electronic components of the heat for the wearable device is very tricky, high computing power, high communication bandwidth will bring more serious heat, equipment heat and heat dissipation will become the key research areas of subsequent product development.

Although the metaverse technology is still in its infancy and XR technology has a long way to go, people's desire to create virtual worlds is indeed growing. Metaverse or XR technology is a right but difficult path. With the entry of various giant companies, the XR industry will move forward in a twist and turn, and finally enter our lives fully and set off another information revolution.