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Why I'm Bullish on Virtual Reality and Sad About It

Updated: Aug 27, 2023

What is virtual reality?

According to AI, Virtual Reality (VR) is “a simulated environment that can be experienced through a headset or other device. VR users can interact with the environment and objects in it, and they can feel like they are actually there.”

In plain english, it’s an alternate world where anything is possible, everything is addictive, and nothing is real.

If you are more of a visual learner, below is a commercial for Apple’s recently released VR headset:

Why am I bullish?

A few reasons why I am bullish on VR:

  • Travel revenue is expected to reach $854.80 billion in 2023.

  • Revenue from devices, TVs, and tablets is expected to reach $610.77 billion in 2023.

  • Social media revenue is expected to reach $231.1 billion in 2023.

  • Video game revenue is expected to reach $196.03 billion in 2023.

  • Revenue from attending sporting events is expected to reach $28.97 billion in 2023.

  • Revenue from concerts is expected to reach $28.1 billion in 2023.

  • Movie / box office revenue is estimated to be $23.5 billion in 2023

These are only a few of the markets that VR will partially disrupt and they are worth a total of $2 trillion in annual revenue. A few key phrases from this last sentence are, “only a few of the markets,” “partially disrupt,” and “$2 trillion.” If VR earns only 1% of the example markets above, that is still $20 billion in annual revenue.

Let me provide a two quick examples:

  1. Taylor Swift is currently on tour with a single ticket selling for $1-5k, and although I don’t expect VR to replace her concert experience, I do expect that some shows will be live streamed using VR for a fee. This will be the next best thing to attending in person and will similarly affect sporting events and movies.

  2. Next, let’s discuss the number one revenue item above: Travel. I don’t expect people to stop traveling, but I imagine that some will travel less when they can visit a location virtually or have an “in-person” talk with a distant relative without the hassle of actually traveling.

Why am I SADLY bullish?

Have you been out to dinner lately? If so, you’ve likely seen countless families and couples staring endlessly at their phones and not speaking to each other. If that’s happening in a public place, I shudder to think what goes on at home.

Meme of person wearing VR goggles walking into wall

We spend 3 hours per day watching TV, 2.5 hours on social media, and 1 hour playing video games, for a total of 6.5 hours on devices. Based on data, these three activities are ranked 21, 32, and 22, respectively, from a happiness perspective. On average we are only awake for about 16 hours, which means we are spending at least 41% of our time, not including work, on screens, “enjoying” relatively joyless activities.

List of happiness activities (source Mappiness)

The amount of screen time will only increase with the release of VR devices, and as a result, our level of happiness will decrease, which is why I am sadly bullish!

Disclaimer: The information in this post is provided for your convenience only and is not intended to be treated as financial, investment, tax, or other advice. The information is intended to be educational and is not tailored to the investment needs of any specific individual.  It is also not intended to be relied upon as a forecast and is not an offer or solicitation to buy or sell any securities or to adopt any investment strategy.  The opinions expressed are those of the author.  Reliance upon the guidance and information in this presentation is at the sole discretion of the individual.

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