How we see the development of the AR/VR market

5 min readJun 2, 2021

We have been engaged in AR/VR development since 2014, and we consider it a promising direction for work. And as time shows, we were right — in 2020 the market for AR/VR solutions grew by 16% and reached 1.4 billion rubles. At the same time, experts believe that there is still no mass demand.

We have some thoughts about the development of the AR/VR market. And we decided to talk about it with you.

Why we are investing in virtual and augmented reality products, how the Coronavirus has affected this market, where we are looking for personnel, and why we are focused on the Western market — find out more in our new post below.

Here’s what our founders Alexey Kulakov and Alexey Markin think about this.

AR/VR is an expensive bonus feature

Alexey Markin: So far, AR/VR (augmented and virtual reality), in most cases, is perceived as an expensive bonus feature. Because, of course, the cost of developing such a solution is high, but the penetration of these technologies into mass use, on the contrary, is low.

Today AR/VR is an intermediate stage before MR (mixed reality), two components of the future single whole. MR is where it all needs to come together.

At the same time, we see more requests from foreign clients. And during the Coronavirus crisis, people realized that VR is a great opportunity for telepresence and bringing people together. It is not only about how people meet and do something within workflows. The usual types of interaction such as exhibitions, networking, and other things are also migrating towards VR.

Alexey Kulakov: There is more interest in AR/VR because people got more experience. But, if you look at what stage the technology is at, then it is clear that these are still single cases, and even if they pay off, then these solutions are not suitable for everyone and everything. There is no mass demand yet. And it will not appear until we have mixed reality glasses with several characteristics:

— they are light,

— cheap,

— you can walk down the street in them,

— this is exactly the mixed reality, and when you look through them, there is no sensory gap,

— they are available to the mass consumer.

As soon as this appears, everything will change.

But even now, we can see serious investments from Facebook and Apple. These are global players who produce hardware and software and create an infrastructure for interaction — this is very important.

At the same time, there are already many situations when VR is not just an expensive bonus feature (although, it continues to remain for many cases). For example, we have a project that we did for Huawei — VR simulators for 5G network installers and people working in logistics. This really saves the company money because it is expensive to shut down a 5G tower and train employees on it. It’s easier to create an activity simulator.

Then, again, in Coronavirus times, when it is impossible to get together offline and you need to teach people, this is a great solution.

VR also becomes an excellent solution when part of a product (especially a new one that is just entering the market) is to create a specific experience of interacting with it. VR makes it possible to pre-sell this experience in such a situation, and now we have a completely understandable sales tool, but in rather narrow niches.

The main customer of AR / VR development and selection of the contractor for the project

Alexey Markin: Of course, the main customer is large corporations. Because they understand the application and economic benefits of these technologies for themselves, and they have budgets for such projects.

For us, these are rather large foreign corporations, big brands.

As with many other industries, clients look at:

— portfolio,

— the ability to work with your head,

— the level and quality of the pre-sale and meeting the client’s request.

Share of profit of AR / VR in the business and prospects

Alexey Markin: We started looking at AR/VR back in 2014 when there was cardboard instead of virtual reality headsets. Now we are more focused on the foreign market and see great potential in it. The share in the profit is still small — after all, our main profile is digital production. But the prospects are gigantic. So we will keep doing this.

Competence and competition with game development

Alexey Kulakov: For us, the situation looks like this: we have been investing in this area for quite a long time and managed to put together a team of professionals and develop a portfolio. The main thing is that it must be relevant to client requests.

And then we run into the question of personnel. And there are indeed problems here. Because we need:

— intelligent producers,

— Unity and Unreal Engine developers,

— cool 3D modelers.

And these guys are in high demand for serious game development. And the available recruiting market is narrower than for the regular web or mobile development, for example.

HR market with AR / VR competencies

Alexey Markin: We need specialists of the middle level and above, and these are exactly those who are wanted in game development.

Alexey Kulakov: Of course, our strategy is always based on teaching juniors. But the situation does not always allow us to do this in this exact direction.