The use of AR/VR: What does it mean for Sport & Entertainment? And what VCs and Investors are looking at?
We are living in a digital world where new experiences are being created every single day.
Artificial Intelligence, machine learning, virtual reality, augmented reality etc. The world is evolving faster than we thought many years ago. But what is interesting to see is that people’s traditions and habits don’t change at the same pace. If we focus on the sport and entertainment industry, although many investments are made in new technologies and innovative startups to move the industry forward, we can acknowledge that still many leading organisations have outdated business models and fail to capture maximum upside from innovation. In this article we will focus on Augmented and Virtual Reality as it is one of the best examples of an awaited success that struggles to happen. For many years we have been talking about it and how it will drastically change the industry but in 2020 it remains quite discrete even though the COVID age seems to speed things up.
So what do AR/VR mean in the sports industry? How is it already used by some organisations? And what VCs and investors are looking at? We will give you some pieces of the answer and insights about these technologies that will definitely embrace the new sport era!
A step ahead for Augmented Reality (AR)
If AR is still considered as a sophisticated technology to implement, many improvements have been done in recent years and the result is obvious: Augmented Reality has penetrated into lots of industries, including sport where it was often overlooked. Nowadays Augmented Reality is changing the way fans are experiencing sports. Main organisations and broadcasters are using it to display overlay statistics and pieces of content that enrich the viewers' experience. As an example, the DFL successfully integrated Augmented Reality graphics into aerial during Bundesliga matches for the first time in October 2019. Here the AR comes as a magnificent technology to empower the use of datas and the new forms of “Fan Engagement” created by traditional TV broadcasters, media, sponsors etc.
But it is now possible to let each fan create their own gaming experience by using the camera on their smartphone and customising their screen with graphics displayed in real time over the pitch. This is what the french based company Immersiv.io is doing: “Our ARISE solution for example, allows the fan to take control of his own game experience by clicking on his smartphone screen to display real time statistics (like instant speed, heatmap, duels...) directly on the field.” said Emanuelle Roger, the founder of the company. She added “Nowadays fans want access to customized live content, they also want to have access to new types of information to better analyze the performance of their favorite players. There is a huge number of collected datas during live sports events, and making this data available to all fans is a real new feature.”
Putting aside consumers’ habits and experiences, Augmented Reality is mostly used for officiating and on-pitch decision making; and the best example we can sort out is certainly the Hawk-eye company. The leading innovator in sports technology was first used in crickets back in the early 2000s and is now implemented in 25 sports and covers about 30 000 events per year, from tennis tournaments to the MLB that recently introduced Next-Gen Baseball tracking. And when it comes to player performances, AR is also playing a considerable role, improving training sessions and injury recoverings by bringing additional datas and tools for strategies, game understanding etc.
VCs and Investors are very comfortable to invest in AR because it is still perceived as an emerging technology and the business targets a large market opportunity. Indeed the bigger the market size, the greater the investments. AR does not require any specific hardware or software to run, as it is being used every day in millions of smartphones, and even if you are not familiar with it, you have already heard about mobile applications like Snapchat or Pokemon Go. Both are using AR technology and have conquered the world. Pokemon Go has been downloaded more than a billion times and has generated over 3.5 billions revenues since its launch. These kinds of figures do not go unnoticed.
Last but not least, VCs are looking for innovative products with competitive advantage. If AR isn’t solving crucial problems in our daily lives, it brings us new innovative experiences and it has penetrated into our consumption main habits. AR had proven that it could add value to the sports industry and investors understood it. The market is still growing and is supposed to reach USD 65.22 billion by 2027.
Virtual Reality is one step behind
Virtual Reality didn’t spread the world as it was supposed to do, or at least as it was announced back in the mid 2010s. Five years later we are always in a situation where VR is still perceived as experimental and struggles to enter in people’s habits. But all things come to him who waits and it’s likely that VR will fundamentally change lots of industries such as healthcare, military and perhaps the sports industry, in the age where COVID-19 has consequently impacted the activity.
When we think about VR in sports we see a technology that enables fans to get closer to the action and live new exciting experiences. If it has been the tendency for the past few years, it seems that now organizations are using more and more this technology to improve sports performances. In the United-States VR is used by NFL teams to practice without stepping on a football field, it is used by NASCAR racers to help them with trajectories and circuit recognitions, it is also used in basketball, in soccer, even in poker. Nowadays VR seems to be a more attractive solution for B2B business than for B2C.
Exploring the Virtual Reality B2C opportunities is coming-back to the fact that this technology will provide fans with new innovative experiences. In 2020 it seems that the market is more mature and many sports organisations are talking about using the COVID-19 pandemic as an opportunity to improve the fan experience and bring back Virtual Reality on the table. In fact in the past 2-3 years, sports organisations wanted to try and implement Virtual Reality. They experimented to create limited experiences for fans and premium activations to show that they were at the forefront of the innovation but ultimately, the technology was not made to be daily used or to drastically change the way sport is consumed.
VR is still in an experimental phase and that one of the possible reasons VCs and investors could be less enthusiastic about investing in sport VR tech startups. As VR relies on specific hardware and technologies that are not easily available, the market is still restricted and startups struggle to meet with their expectations. In 2018, the pioneer startup Jaunt VR stopped all its activities on VR and went through an important redundancy plan. Next VR, another startup that has worked with CNN, the NBA or Fox Sports was acquired by Apple after having financial difficulties.
If a VC’s Job is to take risks, the bet still seems dangerous as consumer adoption is a long way off due to technological limitations. Some improvements such as the 5G and the new Oculus Quest 2 by Facebook have recently shown that we might be in the right direction and as General Catalyst’s Niko Bonatsos said in Lucas Matney’s interview for TechCrunch: “this entire industry is dependent on the big players continuing to invest in hardware innovation”
Time will be right for VR startups when the technology will be easily accessible and when people will get used to it. And talking about the future, we have to be really enthusiastic about major innovations that are emerging step by step. As Emmanuelle from Immersiv.io told us: “In years to come, one can imagine that coupling data capture with AI will make it possible to reproduce entire matches in 3D, or to capture volumetric content (intel true view) to allow fans to display celebrations of their favourite players in real size in their living room or replays of the best game actions in 3D”.
There’s no doubt that the experience brought will change our approach to consume and enjoy sport events even if we have to be patient. 'It’s still early, but it’s no longer too early'