The Complete Guide to Virtual Reality and the VR Industry

Updated June 25, 2018 - Dom Barnard

With virtual reality, you can tour the universe in a spaceship, view a potential house before buying, perform a medical operation and create 3D art, all from the comfort of your own home.

Virtual reality (VR) simulates different environments using a headset and motion sensors and is being used in a wide range of applications, from education to journalism to well-being. In this guide, we’ll explore:

Current age of virtual reality

The popularity with modern VR began in 2010, when Palmer Luckey created the first prototype of a VR headset that would evolve into the Oculus Rift. Two years later, he launched a Kickstarter crowdfunding campaign and raised $2.4m, bringing VR into the public interest. Two years after that, Facebook’s CEO, Mark Zuckerberg, bought the company for $2bn.

Oculus Rift Kickstarter campaign

The Oculus Rift Kickstarter campaign raised $2.4m and introduced VR into the public image.

Several competitors have emerged since then, from the HTC Vive and Sony’s PlayStation VR to smartphone-powered headsets such as Samsung’s Gear VR and Google Daydream. Meanwhile, thousands of developers are making VR experiences, film-makers are exploring the potential for documentaries and animation, and Facebook and YouTube are creating 360-degree videos.

What is virtual reality?

Virtual reality is the term used to describe a three-dimensional, computer generated environment which can be explored and interacted with by a person. That person becomes part of this virtual world or is immersed within this environment and whilst there, is able to manipulate objects or perform a series of actions to determine what happens in the environment.

Virtual reality usually has these characteristics:

  • Believable: You feel like you're in your virtual world through what you see and hear.
  • Immersive: As you move your head around, what you see changes as well, just as it would in real life.
  • Computer-generated: VR worlds are usually created with complex 3D computer graphics that change in real time as we move.
  • Interactive: You can interact with different objects in the scene, whether it’s pressing a button or opening a door.

VR Headsets

The most important piece of virtual reality is the headset, a device like a pair of goggles that goes over your eyes. The more expensive, higher quality headsets need to be connected to a computer to run apps and games, while some cheaper ones use a mobile placed at the front of the headset.

Headsets work best when combined with a pair of headphones, and there are other optional accessories such as hand controllers, to enhance your simulated experience of being in another world.

Mobile vs Desktop vs Standalone

Virtual reality headsets fit into three broad categories, mobile, desktop or standalone.

Mobile VR headsets

Mobile VR headset

Mobile headsets are shells with lenses into which you place your smartphone. The lenses separate the screen into two images for your eyes, turning your smartphone into a VR device. Mobile headsets like the Samsung Gear VR and the Google Daydream View are relatively inexpensive at under $100, and because all of the processing is done on your phone, you don't need to connect any wires to the headset.

However, because phones aren't designed specifically for VR, they can't offer the best visual experiences, and are underpowered compared with PC or game console-based VR. In addition, there is currently no positional tracking with mobile VR. You can look around an environment from a single point, however you can’t look around objects. Recently, Google and other companies announced they are introducing mobile tracking in the near future.

Standalone headsets

Standalone VR headset

Enjoy high-quality VR anywhere you want with no cables, phone or PC. An all-in-one VR headset, or standalone, puts everything in the headband needed to convince you that you’re in another world. It is a single integrated piece of hardware, like a phone or tablet.

Standalones are wireless. It is helpful to understand, however, not all wireless VR headsets are standalones. Some systems beam information wirelessly from nearby PCs or consoles, and others use wired packs that clip to clothing or slip in a pocket. Some dreamers hope a true standalone with processor, graphics, display, storage and tracking all in the headband will offer additional modes to be more flexible.

Desktop based VR headsets

Desktop VR headset

Desktop headsets, both non-tethered and tethered headsets (currently the most common) such as the Oculus Rift, HTC Vive and PlayStation VR headsets provide a more immersive experience at a higher price point. Most of these headsets are tethered with cables form the headset to an external piece of hardware to power the headset.

The dedicated display, use of built-in motion sensors and an external camera tracker, drastically improves both image and sound quality, as well as providing head tracking.

The trade-off, besides the clunky cables, is the price. The least expensive tethered options are currently around $400, and with the Rift and the Vive, you’ll need a powerful PC to run them, while the PS VR requires a PlayStation 4.

VR Apps

Best VR apps and where to find them

VR devices have their own app stores, similar to smartphone app stores, where you can browse and download games and apps. Some of these stores are accessed using the device itself, while others – Gear VR and Oculus stores, for example – can be browsed on your computer.

For more about VR app stores, read Where to Find the Best VR Apps.

Popular VR Headsets

Sony PS VR

Sony PS VR
  • The Sony PlayStation VR headset brings powerful, compelling virtual reality, with motion control support, to the PlayStation 4.
  • Cost: ~$400
  • App store: PlayStation Catalog

HTC Vive

HTC Vive
  • The HTC Vive is a comprehensive PC-tethered virtual reality system that supports both motion controls and whole-room VR.
  • Cost: ~$500-700, you’ll also need a powerful PC
  • App store: Steam or Viveport

Oculus Rift

Oculus Rift
  • The Oculus Rift is a powerful, PC-tethered VR headset that's even more appealing now thanks a lower price and the inclusion of Oculus Touch motion controllers.
  • Cost: ~$400-600, you’ll also need a powerful PC
  • App store: Oculus Store

Google Daydream

Google Daydream
  • Google's Daydream View VR headset is a comfortable gateway to virtual worlds-there just aren't many to visit yet.
  • Cost: ~$70
  • App store: Accessible through the Daydream App

Samsung Gear VR

Samsung Gear VR
  • Samsung's Gear VR headset becomes much more usable with a handheld controller, but finding good virtual reality content is frustrating.
  • Cost: ~$70
  • App store: Oculus Store

Google Cardboard

Google Cardboard
  • Google Cardboard is the lowest cost headset, with the VR experience and virtual world powered by your mobile phone.
  • Cost: ~$10
  • App store: Google Play, Apple App store

Merge VR

Merge VR
  • Merge VR is high end VR headset, for both Android and iPhone VR apps. The marshmallow-soft material is comfortable, durable and cleanable.
  • Cost: ~$50
  • App store: Google Play, Apple App store

Read a list of all the VR Headsets under development.

Accessories for the VR headset

Aside from the headset, there are plenty of accessories and peripherals coming into the market.


There are already plenty of controllers on the market, mostly for mobile VR (as non-mobile VR now includes its own controllers). These controllers include STEM System, Control VR and iMotion. Research developer support for each device to work out if it’s compatible with your system before buying.

VR hand controllers for Vive and Oculus

Hand tracking

Companies such as Leap Motion and Ultrahaptics are using infra-red and ultrasound to detect hand movement without needing to hold onto a controller.

Ultrahaptics technology for VR applications

Ultrahaptics are using ultrasound to project sensations onto a hand.


Smell devices are being developed to add a 4th sense to virtual reality. Tokyo based Vaqso has designed an odour emitting attachment for VR headsets. About the size and shape of a candy bar, the device has space for up to three different odours and comes with a fan that can change the intensity of the smell based on what is happening on the screen.

Using smell senses while in VR

There is also the OSVR project by gaming hardware company Razer, which is trying to create open standards around VR so that people can mix and match different headsets and accessories.

OSVR Vision

OSVR is a movement founded to create a universal open source VR ecosystem for technologies across different brands and companies. Giving you the freedom to combine different brands of HMDs and Controllers to experience VR the way they want to.

Types of virtual reality

The most common VR experience come from downloading an app or software from an app store. Once the download has completed, you can run it in a compatible VR headset. For those who don’t want to wait for a (usually) huge initial download, web-based VR could be the future. It’s still in early development but enables users to access VR through the browser, just like a webpage.


Most of the high end VR experiences require a large download up front. These can be gigabytes in size and take several minutes to download. Once the app has download, typically form an app store such as the Oculus Store or Google Play, the experience is playable with a VR headset specific to that app.

Web-based (WebVR)

WebVR brings virtual reality to the web, making it easier for anyone to create, enjoy, and share VR experiences. With WebVR, you can open up a browser and get into VR just by clicking a link, no matter what device you have.

WebVR example using A-Frame

WebVR is built using JavaScript that accesses the WebGL platform built into modern browsers through the HTML5 Canvas element. WebGL allows browsers low-level access to your machine’s GPU for more advanced graphics rendering.

Popular frameworks for building WebVR experiences include:

  • A-Frame – entity-component WebVR framework, built on top of three.js
  • Babylon.js – WebGL engine, alternative to three.js
  • three.js – create and display animated 3D computer graphics in a web browser using WebGL
  • Vizor – easy WebVR content-creation tool & hosting service
  • Hologram – easy-to-use macOS native application, built on top of A-Frame
  • PlayCanvas – powerful WebGL 3D game engine with a custom WebGL engine, entity-component framework, and hosting service

Example WebVR experiences

For more examples, check out the Google experiments WebVR page.

Applications of VR

There are many applications of VR, from engineering to entertainment to recruitment. It’s best known currently for gaming, however there are plenty of other useful application of virtual reality:

  1. Automotive industry
  2. Healthcare
  3. Gaming
  4. Retail
  5. Tourism
  6. Real estate
  7. Architecture
  8. Gambling
  9. Learning and development
  10. Recruitment
  11. Entertainment
  12. Education
  13. Sports
  14. Art and design
  15. Events
  16. Well-being
  17. Social
  18. Charity
  19. Marketing
  20. Recreation
  21. News/Journalism

Read about these industries in detail in our article: Applications of VR

Wherever it is too dangerous, expensive or impractical to do something in reality, virtual reality is the answer. From trainee fighter pilots to medical applications trainee surgeons, virtual reality allows us to take virtual risks in order to gain real world experience. As the cost of virtual reality goes down and it becomes more mainstream you can expect more serious uses, such as education or productivity applications, to come to the fore.

How do you create VR experiences?

Filming 360 videos

The cameras and editing software needed to film and then stitch together VR footage are complex and expensive. At €23,500, Nokia’s OZO+ camera is out of most people’s price range but demonstrates some of the highest quality 360 videos that can be created, and is being used by professional film-makers.

More affordable is Samsung’s Gear 360 spherical camera, which costs around $100, and which has front and rear lenses to capture 180-degree shots both horizontally and vertically to create panoramic video or photo. It’s a great starting point for VR – here is an example 360 video of London we created using it.

Samsung Gear 360 camera

The Samsung Gear 360 camera, with both front and rear lenses.

There are a number of other 360-degree cameras available, like the Ricoh Theta S, Kodak Pixpro SP360 4K Action Cam, LG 360 Cam, Giroptic 360cam and the Vuze Camera.

360 vs virtual reality

The terms “360” and “virtual reality” are often used interchangeably, but there are important differences. The 360-degree photos and videos are panoramic pictures and videos that have been stitched together, so you can turn your head to look around you. But these aren’t virtual worlds: you don’t have free movement to explore them as you do in full virtual reality experiences.

All VR devices offer a mixture of both, however: you can watch 360 videos or explore virtual worlds with HTC Vive or Google Cardboard.

Unity vs. Unreal Engines

Unreal Engine 4 (UE4) and Unity are two of the most popular game engines available to create VR experiences. While some developers choose to create their apps natively without the use of either of these, the majority of VR projects use one or the other.

UE4 typically has a higher quality output, at the expense of ease of use. However, over time the difference between the two is minimal and the choice between the two comes down to preference.

It’s worth noting they have slightly different business models: Unity charges a yearly fee for their Pro version, whereas UE4 charges 5% of gross revenue after the first $3,000 per product per calendar quarter.

VR applications built with UE4:

VR applications built with Unity:

Pros and cons

Like any technology, virtual reality has both good and bad points. How many of us would rather have a complex brain operation carried out by a surgeon trained in VR, compared to someone who has merely read books or watched over the shoulders of their peers? How many of us would rather practice our driving on a car simulator before we set foot on the road?


  • Reduce expenses by replacing expensive training with VR
  • Experiences are more immersive than with traditional 2D screens
  • Big companies backing VR, including Facebook, Google, Samsung, Microsoft and Sony
  • Range of headset costs to suit needs and budgets, from $10-700
  • Experiential learning increases user retention


  • Headset segmentation (mobile vs non-mobile) and app store segmentation
  • Exclusivity of games and experiences, headset manufacturers tie developers into their ecosystem
  • Small number of high quality experiences
  • Mainstream adoption has been slow
  • Some people feel sick after using VR

Visit here and here for a more detailed analysis of the pros and cons.

Future of VR

The technology has been improving rapidly over the last few years and will continue to do so. However, due to the complexity involved in creating high quality VR content, there isn’t too much of it around. This will change as headset sales increase and the customer market size increases, giving greater incentive for content creators to produce engaging experiences.

We can expect to see many more innovative uses for the technology in the future as we prepare for a whole new virtual world of entertainment, information and communication, as engineers, developers, games designers and film-makers explore the medium and its new creative potential.