Illustration: Aïda Amer/Axios

Depending on who you talk with, augmented and virtual reality are either the next big thing or a giant disappointment. Several moves over the past week show it's probably both.

Between the lines: Both the products and the market are developing more slowly than initially anticipated, forcing startups to rejigger their plans to survive longer with less revenue and big companies to be cautious about investing too much, too soon.

Driving the news:

  • Last week Qualcomm introduced the XR2, its latest VR/AR chip designed to power the next generation of VR and AR devices and offering support for higher resolution displays, more cameras and 5G support. It's also working with Pokémon Go creator Niantic on a reference design incorporating both companies' knowhow.
  • The well funded Magic Leap is repositioning itself to focus more on business customers, only the latest in a series of players in the space to do so. It's all the more notable as Magic Leap has raised more than $2 billion in funding while being hyped as a transformational breakthrough in augmented reality.
  • Facebook sold its Oculus Medium VR development program to Adobe. Meanwhile, Oculus Quest is gaining support for hand tracking, a small but important move forward in capabilities to make VR experiences less cumbersome.

The big picture: The road that VR and AR are on is well-paved in tech. Initial buzz leads to overheated enthusiasm, then a "trough of disillusionment." After that, there's a steady march in which the technology ends up meeting or surpassing expectations even while taking far longer than anyone anticipated.

  • The problem for AR and VR is that several key ingredients — battery life, screen resolution and comfort — aren't where they need to be for either technology to go mainstream, especially for consumers.
  • By aiming at consumers, companies also made sacrifices in the name of cost, which has further compromised the experience, says Urho Konttori, founder and producer chief at Varjo, a Finnish startup focused on VR for business.
  • Many AR and VR companies are pivoting towards business use because in that market, as long as you can find one money-saving or productivity-enhancing use, you can ship a successful product.
  • In the consumer market, by contrast, there's a chicken-and-egg problem — there's not yet enough content to drive hardware sales, and low hardware sales mean the market remains unattractive for most content creators.

What's next: At last week's Snapdragon Summit, I had a chance to try out technology from startup Spatial, which aims to create virtual collaboration for business users across different kinds of devices and platforms. (See video here.)

  • Spatial's technology allows people on XR2 prototypes, Microsoft HoloLens, Oculus Quest and even AR-capable smartphones to engage, via avatar, in one virtual environment, using virtual whiteboards, for example. While still crude, Spatial's tool is already in use at companies like Purina to bring together remote teams.

Go deeper:

Go deeper

28 mins ago - Sports

Steelers-Titans NFL game delayed after coronavirus outbreak

A worker cleans a handrail at a Tennessee Titans game. Photo by Hannah Foslien/Getty Images)

The NFL announced that Sunday's game between the Tennessee Titans and the Pittsburgh Steelers has been delayed after several Titans players and staffers tested positive for the coronavirus.

Why it matters: It's the league's first game delay caused by a COVID-19 outbreak during the season, which is not taking place in a "bubble," like the NBA and MLS.

Tim Scott says Trump "misspoke" when he told Proud Boys to "stand by"

Photo: Bonnie Cash/POOL/AFP via Getty Images

Sen. Tim Scott (R-S.C.) told reporters on Wednesday that he believes President Trump "misspoke" when he told the far-right "Proud Boys" group to "stand back and stand by" in response to a question about condemning white supremacy at the first presidential debate.

Catch up quick: Moderator Chris Wallace asked Trump on Tuesday, "Are you willing, tonight, to condemn white supremacists and militia groups and to say that they need to stand down?" Trump asked who specifically he should condemn, and then responded, "Proud Boys, stand back and stand by. But I'll tell you what, somebody's got to do something about antifa and the left."

Ina Fried, author of Login
2 hours ago - Technology

Lego, Sesame Workshop back early-learning startup

Photo by Noam Galai/Getty Images

A number of leading children's brands, including Lego and Sesame Workshop, are among the investors pouring $50 million into BEGiN, the New York startup behind the early-learning program HOMER.

Why it matters: Thus far, HOMER has focused on reading apps, but with the new funding and partnerships, the company says it will expand to a full early-learning program combining digital, physical and in-person experiences, tapping some of its investors for both content and distribution.