How is AR enhancing social interaction? Who’s doing What so far? 

ARtillery Intelligence’s latest report looks at how AR is evolving as a social communications tool. What’s the size of the opportunity and what do today’s market signals indicate? Preview the 3-part series below, subscribe to access it in full, or purchase a la carte.


Executive Summary

One of the biggest questions nagging the Augmented Reality (AR) sector is, what will be its killer app? And when will it arrive? The medium needs such an accelerant to legitimize and bring AR into mainstream acceptance – something it’s failed to do in the 18-months since Apple’s ARkit launch.

We’ve speculated in past Intelligence Briefings that killer apps will likely extend beyond the novel and “sexy” attributes that have thus far driven the industry’s speculation, imagination and design principles (e.g. games). It will rather be something more mundane that provides all-day utility, like visual search.

But another category will also vie for the position of AR killer app: social. Indeed, you could argue that a social AR killer app has already arrived and accelerated mass acceptance: social lenses. We see these as an important AR “gateway drug,” but only a glimpse into social AR’s true potential.

One thing missing from social AR lenses – though quite popular through Snapchat and Facebook – is meaningful social interaction. More “augmented media” than augmented reality, they’re created in isolation then shared with friends to be consumed asynchronously at a different time or place.

But true social AR will combine this time/place-shifted paradigm – which will still be valuable to achieve scale — with synchronous AR. This will rely on technically complex multi-player functionality, a key tenet of the AR cloud. But when it arrives, it will unlock new possibilities and use cases.

Simplified View: See report for full detail.

Moreover, the multi-player use case inherently accelerates usage and adoption through viral growth. It also has the potential to benefit from the fundamentals of network effect. With each node (user) added to shared AR experiences, the value and appeal of those experiences can grow exponentially.

Beyond the multiplayer angle, augmentation is generally a natural fit for social interaction. Extending from social lenses (face filters, etc.), next-generation graphical overlays will include real-time layers of information that people choose to share with others through live AR overlays as they walk around.

These shared titbits could be everything from mood to relationship status to stylistic accouterments. The latter opens the door for business models around the exchange of virtual style items. This builds on the concept of marketplaces for digital identity, manifesting today in communities like Fortnight.

Speaking of which, one construct for socially-oriented AR is – as Ubiquity 6 CEO Anjney Midha puts it – “an MMO for the real world.” This envisions layers of virtual worlds all around us which can be dynamically activated by users through AR interfaces, while managed and permissioned by creators.

But questions remain. Who will build this? What will the ecosystem consist of? Will there be open platforms for developers to create shared spatial experiences? We’ll tackle these questions in this three-part report (totaling 85 pages), including narrative analysis, original data, exclusive company interviews, and case studies.



Price: $699 

These reports are available by subscribing to ARtillery PRO. You can also purchase the three reports together (totaling 85 pages) for $699. This includes a briefing with the report’s author to discuss takeaways and answer any questions you may have.

 


Excerpt: Follow the Money

Another thing these gateway drugs have done is begin to validate business models. What AR features do consumers want to use? And what will they pay for? Pokémon Go and Snapchat have already begun to answer these and other strategic questions with large-scale market adoption.

Along with that has come real dollars. Indeed, anyone pointing fingers at Snapchat Lenses or Pokémon Go as being lesser forms of AR should remember that they’re the few AR formats to produce any meaningful revenue so far. In emerging sectors like AR, it’s about following the money.

Pokémon Go (which is not social AR) for example has brought in more than $2 billion in revenue to date. It did this through in-app purchases and brand-collaborations to drive local offline commerce. These are just a few potential business models that will develop and drive mobile AR revenues.

More to the social theme of this report, ARtillery Intelligence has projected $414 million in AR ad revenue in 2018, growing to 2.5 billion by 2022. Almost all of that was from branded AR Lenses. Early leader Snapchat has the lion’s share, but Facebook will catch up quickly given its larger global scale.

Simplified view: See report for full detail.

Proof Points

Beyond the dollars spent to reach AR users in social channels, how is that user behavior developing? For this question, we turn to the consumer AR survey that we co-produce with our data partner Thrive Analytics. Here, a large sample (n=2,198) is given the chance to report AR usage and sentiments.

Among all mobile users surveyed, 32 percent have used AR. And within that sub-segment, the largest share of users have used games. This is due to the prevalence and popularity of Pokémon Go. Indeed, it represents most people’s introduction to AR – the reason we call it AR’s “gateway drug.”

But second place in AR usage goes to Social apps (or social features within apps). This is due mostly to Snapchat selfie masks, which were named specifically in the survey question. High usage is also validated by Snapchat’s own figures, which report 70 million daily active users for AR Lenses. Continue reading.


Price: $699 

These reports are available by subscribing to ARtillery PRO. You can also purchase the three reports together (totaling 85 pages) for $699. This includes a briefing with the report’s author to discuss takeaways and answer any questions you may have.

 


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Methodology

This report highlights ARtillery’s Intelligence viewpoints, gathered from its daily in-depth coverage of the XR sector. To support the narrative, data are cited throughout the report. These include ARtillery Intelligence original data, as well as that of third parties. Data sources are attributed in each case.

For market sizing and forecasting, ARtillery Intelligence follows disciplined best practices, developed and reinforced through its principles’ 15 years in tech sector research and intelligence. This includes the past 2.5 years covering AR & VR exclusively, as seen in research reports and daily reporting.

Furthermore, devising these figures involves the “bottom-up” market-sizing methodology, which involves granular ad revenue dynamics such as campaign pricing and spending. More about ARtillery Intelligence methodology can be seen here, and market-sizing credentials can be seen here.

    


Disclosure and Ethics Statement

ARtillery Intelligence has no financial stake in the companies mentioned in this report, nor received payment for its production. With respect to market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers. It doesn’t perform paid services or consulting for such companies, thus mitigating bias — real or perceived — in market sizing and industry revenue projections. Disclosure and ethics policy can be seen in full here.


Subscribe to access reports, or purchase .

Price: $699 

These reports are available by subscribing to ARtillery PRO. You can also purchase the three reports together (totaling 85 pages) for $699. This includes a briefing with the report’s author to discuss takeaways and answer any questions you may have.