XR And The Metaverse At CES 2022: Wading Through The Hype

By Patrick Moorhead - February 21, 2022
Shiftall's new Meganex VR headset. SHIFTALL

Since the company formerly known as Facebook’s $2 billion purchase of virtual reality gaming company Oculus VR in 2014, I’ve seen the hype cycle around VR and the Metaverse come and go multiple times. That said, the current buzz feels different. For one, Facebook has now renamed itself Meta, and is now fully pursuing the Metaverse as its primary business. Meta’s position in the market is polarizing as ever. The company is acquiring talent from across the industry, pulling from competitors and even its own suppliers. Critics say the company has fully hijacked the Metaverse discussion, in a way that leaves little room for the industry to define or expand the concept in any other way. 

As with any hot technology, we’re also seeing a lot of companies and press outlets attempting to ride the Metaverse hype train without fully understanding what it is or what it could be. My friend Nima Zeighami, a PM at Leia, posted a very amusing threadlampooning the many companies that tried to illegitimately attach themselves to the new Metaverse hype. He’s been in the XR space just about as long as I have and cares deeply about the industry. As such, his critiques are more about protecting the industry than making fun of it. 

All of that silliness aside, there were some pretty big announcements in the spatial computing space at CES 2022 that should help propel the industry in the direction I believe the Metaverse should go.

Qualcomm and Microsoft Partnership

At Qualcomm’s CES 2022 press conference, CEO Cristiano Amon announced the company will partner with Microsoft, providing custom chips for the company’s new “Light” augmented reality glasses. According to the press release, the glasses that utilize Qualcomm’s custom chip will be for both enterprise and consumer use cases. This is relevant because most of Microsoft’s AR ambitions, until now, focused on the enterprise AR space. While there were rumors (and a concept demo) of Niantic possibly prototyping Pokémon Go for the Hololens 2, this is one of Microsoft’s first real commitments in consumer AR. 

There was another significant reveal in Amon’s emphasis that Qualcomm’s new custom power efficient Snapdragon chip for Microsoft would be used in next generation “very lightweight” AR glasses. Microsoft’s current AR headset is more of a helmet than a pair of glasses, so clearly it has some new hardware in development. Also notable, this solution seems likely to combine Microsoft’s Mesh with Qualcomm’s Snapdragon Spaces into a single, comprehensive solution. There are no exact timeframes or specs for any of this from either company. However, considering Apple’s own glasses are expected to come to market in the next year or so, I would expect a short horizon for the partnership’s productization.

I believe that Microsoft is smart to partner with Qualcomm in this endeavor. Qualcomm leads the industry in terms of power efficiency, sustained performance and thermals, both of which are extremely crucial for AR. For this reason, Qualcomm has already scored wins with dozens of AR and VR designs. Its only competitors in the space today are NVIDIA and AMD, both of whom can only claim wins with Magic Leap 1 and 2. I expect that we’ll see more entrants fairly soon, as more AR and VR headsets come to market, but it may still be a year or two until we see a real proliferation of new devices. 

Sony PlayStation PSVR 2

Speaking of new devices, Sony had a very big surprise announcement it chose to share at CES 2022—the unveiling of the new PSVR 2. Even as someone who owned the first PSVR and closely follows PlayStation’s VR ambitions, this announcement even caught me off guard. While we had heard rumors concerning the upcoming device’s specs, there were no rumors or suggestions Sony would reveal it at CES. As was rumored, the headset will feature a 4K resolution OLED display or 2K (2000x2040) per-eye resolution, with a 110-Degree FoV and refresh rates of 90 and 120 Hz. The rumors also got the inside-out tracking right—the PSVR 2 will no longer require a tracking camera to track the headset and controllers.  Instead, the headset will use its four outward-facing cameras to track its position in the world as well as the position of its controllers. 

Sony teased the PlayStation VR 2 controllers at its Technology Day this past December, showing off their design and sharing some technical details regarding haptics. In what I believe is an industry first, the system’s headset itself also includes haptic feedback capabilities. Notably, the PSVR 2 will also be the first to really bring eye-tracking and foveated rendering technology into the mainstream. These features are a bigger deal than most people realize, as they are essential to achieving photorealistic graphics within a reasonable frame rate and without needing top-of-the-line graphics cards. 

The PSVR 2 headset draws power and data through a single USB Type-C cable, which should be a relief for anyone frustrated with hodgepodge of cables required by the first generation PSVR. That said, there is some disappointment among enthusiasts that the headset won’t be wireless. While I understand that criticism with products like the Meta Quest 2, a wireless headset would likely be more expensive, introduce additional latency, have a limited battery life and increase the weight of the headset. While Wi-Fi 6 is a viable solution for some VR headsets today, I believe most XR companies will opt instead for Wi-Fi 6E, given its propensity for less interference, lower latency and higher throughput. The issue with that is that Wi-Fi 6E technology is ready for use but not fully available everywhere —some countries are still in the process of approving the spectrum for use and sorting out potential interference issues with vehicle safety features like DSRC and V2X.

Overall, I think Sony made a lot of good decisions with the PSVR 2. One of the big challenges, in my opinion, will be Sony’s approach to content—more specifically, AAA content. Sony says the PSVR 2 will take the new approach of enabling VR as a feature in certain AAA titles. This strategy may lure more AAA developers to develop VR features, but it also means that AAA PSVR 2 only titles are unlikely to happen for quite some time, if ever. Meanwhile, Meta’s Quest 2 has already sold roughly 10 million units, if not more. If anything, I think Sony’s biggest challenge will be making enough PS5s to create a customer base for PSVR 2 and make it a viable platform for developers. The original PSVR peaked at around 6 million units sold, with roughly 100 million PS4s sold altogether. While 6% isn’t a horrible penetration for an expensive accessory like a VR headset, to date, Sony has only sold around 14 million PS5 consoles. That is a considerably smaller install base for Sony to work with than the roughly 50 million PS4 users it had at the time of the first PSVR launch.

Panasonic’s Shiftall Subsidiary OLED VR Goggles

Shiftall, Panasonic’s own VR headset subsidiary, showed off Meganex, an ‘ultra-lightweight’ and ‘ultra-compact’ VR headset that uses Panasonic’s own 1.3” micro-OLED displays. Weighing a mere 250 grams, the Meganex features a 5.2K resolution (2560 x 2560 per eye) with 10-bit HDR and a 120 Hz refresh rate, as well as 6-DoF inside-out tracking. While we do not know yet how much the headset will sell for, a representative of the company told me that the headset will be available this spring in the US. When it does hit the market, I believe that there will be people drawn to its unique, extremely compact and lightweight form factor for their VR applications.

TCL Leiniao and NXTwear Air

TCL’s first true AR wearable, the Leiniao AR glasses, will purportedly feature a dual wave-guide design, making them completely see-through and wireless  (though they will still rely on smartphones for connectivity and processing over a wireless link). While its capabilities look to be fairly limited at this point, that is the currently the case for most consumer AR glasses. We did learn that the Leiniao glasses will have touch sensitive controls and voice-activated controls, though TCL says it is still working out the early prototypes. Hopefully we’ll learn more about TCL’s Leiniao glasses—perhaps their availability and pricing—at MWC 2022.

The Leiniao AR glasses follow the release of TCL’s NXTWear G, a head-mounted display that acts like a portable home theater and wearable for private computing use cases. This is not to be confused with the new NXTWear Air glasses, another TCL wearable detailed at CES 2022. Weighing only 75 grams, the NXTWear Air glasses feature two 1080P Micro OLED displays and interchangeable lenses. To my understanding, the NXTWear Air uses birdbath optics. While these optics are simpler than waveguides and can be used for pass-through applications, they are primarily used for productivity and entertainment purposes. Birdbath optics are also considerably less expensive than waveguides with better yields. I believe TCL is building these two separate product lines so it can address a variety of consumers with different needs and budgets. 

Vuzix Shield

While we are on the topic, Vuzix announced its own binocular AR glasses at CES 2022, the Vuzix Shield. While the Vuzix Shield AR glasses’ micro-LED projectors only provide a monochrome green display, Vuzix says the next generation will feature the full RGB color gamut. While Vuzix claims the Shield has ‘high brightness, high output,’ there were no actual brightness numbers given in the product documentation. However, the company was more specific around its camera capabilities. The glasses claim dual 13 megapixel cameras capable of capturing up to 4K 30 FPS video. The Shield’s two self-contained batteries are located near the temples of the glasses, though I haven’t seen any battery life figures and they do not appear to support hot swapping. That seems odd for a product supposedly geared towards front-line enterprise workers; nearly every rugged device I’ve ever seen in the field uses hot swappable batteries. Vuzix also claims to have noise cancelling headphones designed for flawless audio and advanced voice and UI interactions, though it did not share any details around loudness and decibel levels for voice recognition. Lastly, the Vuzix Shield features USB Type-C and Wi-Fi connectivity but falls short with its lack of support for Wi-Fi 6. 

Vuzix is clearly targeting the enterprise with Shield, as it has with most of its headsets. That said, aside from the headset’s ANSI Z87.1 safety certification, I’m not sure if any of the specs provided so far really fit that bill. Vuzix also claims to be developing apps for the Shield, to come later, but that only makes me more skeptical about the readiness of this product for launch. 

Liteboxer goes VR

We also learned that Liteboxer is adding VR capabilities to its home boxing workout platform. The hardware itself already costs anywhere between $1200 and $1500 and requires a $30 monthly subscription. Tacking on a $299 Oculus 2 seems like a comparatively small cost for the immersive upgrade it stands to give to the Liteboxer experience. That said, there’s no shortage of boxing apps for VR, and specifically for the Quest 2. Those include The Thrill of the Fight, Creed: Rise to Glory, Path of the Warrior and Drunkn Bar Fight, as well as more fitness-focused boxing apps such as FitXR, Box: Boxing, Knockout League, Mech League Boxing, Punch Pad Workout, Sound Boxing, Supernatural and Virtual Boxing League. I can attest that some of these are very fun and can provide a great workout. Liteboxer, however, looks to be a much higher-level solution. I hope to one day get my hands on it (literally) so I can try it out in VR.

HTC Vive – Wrist Tracker

HTC Vive was also quite busy at CES 2022, announcing yet another new tracker: the HTC Vive Wrist Tracker. HTC Vive designed this versatile tracker to be worn on the wrist—an incredibly simple yet brilliant approach that allows the Vive Focus 3 headset to more accurately track a user’s hands while allowing their hands themselves to remain free. Overall, I can absolutely see how the wrist tracker would make sense in training applications where users need to keep their hands free for tools or other implements. Such applications often still require hand tracking accuracy, and controllers don’t always make sense. At a relatively affordable $129, the wrist tracker is the same price as the existing Vive Tracker. 

HTC Vive also announced a new charging case for the Vive Focus 3, a headset which I am currently testing. One nice thing about the charging case is that it also helps the headset automatically pair with whatever controllers it is charging, minimizing confusion between different pairs of controllers and headsets.

Mojo Vision raises additional $45 million

Mojo Vision did not announce any new products at the show, but the company did announce an additional $45 million in funding for its quest to develop AR contact lenses. The new round of funding should help the company expand its focus outside of medical applications and into athletics, where it has partnered with companies like Adidas for running, Trailforks for cycling, Wearable X for Yoga and Slops for snow sports. While one can imagine many potential consumer and enterprise use cases for AR contact lenses, Mojo Vision seems to be focused on areas where the demand is highest. In the long term, I believe that Mojo Vision’s technology will find its place on the continuum of immersive technologies, albeit limited to simpler AR applications until we can miniaturize more processing power and display technologies to such a small scale.

State of XR and the Metaverse in 2022

With all these XR announcements, I believe we’re set up for an exciting 2022 and beyond. One thing is for certain: we are entering yet another hype cycle. While things feel different this time, they also very much feel the same. The global chip shortage has not yet fully abated, which could delay the rise of XR and the Metaverse in ways that we are only beginning to understand. I think it’s important to emphasize that nobody—no one company—will own the Metaverse when it eventually comes to fruition. It will need to be open and inclusive, much like the Internet was in its early days. I will be writing another article on the state of XR and the Metaverse later this quarter, hopefully sooner rather than later. Until then, I hope this article has been informative and left you excited and curious about the immersive world of technology to come.

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.