Issue: Volume: 23 Issue: 10 (October 2000)

What Became of Virtual Reality?

Ben Delaney

It never fails. I'm on an airplane, chatting with the person next to me. He asks what I do, and I say, "I do market analysis for the virtual reality industry." And he says, "Oh, like those games I saw on TV? I thought that died out, like artificial intelligence." At this point, I go on to explain how VR has actually grown up (as did AI), and how it's now part of the mainstream in manufacturing, training, architecture, medicine, and a lot more. The point I try to make is that the only thing about VR that died was the media hype, and no one really misses that.

I know this to be true because my company is studying the visual-simulation/VR industry, and we just published our third annual report on the state of the business, which is, in a word, good. For the study, we defined VizSim/VR very broadly, to be sure that we didn't miss new applications or technologies. We included the use of any 3D, real-time, interactive computer graphics to create a user-responsive environment, which includes everything from simple chat rooms to zillion-dollar military simulators. Here are some of the key findings from the survey.
In the past year, research overtook prototyping as the most popular use of VizSim/VR, and the museum/exhibition category ranked among the top 15 applications for the first time.

Market Growth: The VizSim/VR industry has continued the growth we documented last year. The total value of the market in 2000, which includes not just systems, but also software, services, maintenance, programming, integration, and many other factors, is valued at $24 billion. This total is up from around $15 billion last year, and is expected to increase to more than $37 billion in 2001. In total, there will be more than 9000 VizSim/VR systems sold this year, with an average value of around $140,000. Most of those systems are in North America, which has more than 76 percent of sales, and over 72 percent of revenue.

Applications: This past year saw an increase in the variety of applications. While most of the top 15 applications from last year are still among the most popular, a new focus, museum and non-commercial exhibitions, cracked the top-15 list as the 6th most-cited application. Elsewhere, VizSim for research edged up, supplanting virtual prototyping as the most-cited application. In the commercial arena, prototyping, design, medical training, and collaborative work were all among the top applications. The Internet, not surprisingly, is a big factor in VizSim, as everywhere else. Overall, about 22 percent of VizSim systems use the Internet for content delivery, and another 18 percent employ hybrid delivery systems, incorporating both CD-ROM and the Internet, or some other combination of media.

Room for Improvement: Every year we ask our respondents to rate VizSim systems and components on 18 different factors such as ease of use, vendor support, reliability, performance, and price. I find the results fascinating because they give us a snapshot of how well the industry is doing in terms of building what people want. Unfortunately, VizSim systems, when ranked as a single entity, are not very well thought of, with a 2.95 out of a possible 5.00 rating. While there was an overall 5 percent improvement, the systems still scored the equivalent of a "C" grade.

What to Expect: While we haven't done next year's survey yet, the following trends are likely to occur over the next 6 to 12 months:

  • Heavy and light industry will adopt VizSim/VR at a growing rate as visualization is tied more closely to computer-aided design.
  • High-profile applications in architecture, urban planning, and medicine will focus greater attention on the technology.
  • Consolidation will continue, but some deconstruction may also take place, as large developers spin off new visualization units.

The VizSim/VR industry has come a long way, and, contrary to the opinions of my airplane companions, VizSim is not dead, nor does it appear to be ill. Indeed, 2000 looks to be the best year yet for the VizSim business.

Ben Delaney is president and publisher at CyberEdge Information Services ( He has been reporting on the VizSim/VR business since 1991. He can be reached at