The Ultimate Guide to Virtual Reality

Learn everything you need to know about virtual reality and how to use it for business.

Written by: Alicia Collins
Emerging Tech Ebook


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Imagine your favorite vacation. Where was it? What did you do? Who went with you? How was the weather? What were you wearing? Can you remember every little detail? If you're anything like me, you can remember the overall vacation, maybe some specific moments here and there, but most of the fine points have faded. It's a bummer, right?

What if you could relive your first time seeing the Eiffel Tower or that rock concert you attended last summer whenever you wanted? With virtual reality (VR), you can. The technology lets you travel to distant destinations, escape to new worlds, and even recreate your favorite moments.

Sound unbelievable? It kind of is. While the technology has existed for decades, it’s only recently made its way into consumers’ homes. VR headsets like Google Cardboard and Oculus Rift make it easier than ever for users to completely immerse themselves in their favorite video games and take a hands-on approach to learning new skills. Users can now interact with people and items in a totally different reality.

But while most people associate virtual reality (VR) with gaming and tourism, it's currently used for a wide variety of applications. From medicine to marketing, there is no limit on what you can do with this technology.

We understand VR can be intimidating. Virtual worlds sound like they belong in a science fiction film, not in marketing. That’s why we created this guide to walk through the history of virtual reality, how it works, its applications, and how growing businesses can use it. Follow along to learn more.

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The History of Virtual Reality (VR)

Virtual reality may seem like the hottest new piece of technology, but in fact, it was used long before innovators coined the term. That's right, people have been obsessed with the idea of escaping reality and entering immersive experiences for decades. In fact, 360-degree murals from the 19th century could be considered some of the earliest attempts at virtual reality. The paintings aimed to make viewers feel like they were present in the scene. When you think about the amount of urbanization and cultural change that took place during the 1800s, it's no wonder why people were so interested in visualizing different cities and civilizations. But to understand modern virtual reality, we have to travel back to the 1930s.

In 1931, Edward Link created the Link Trainer — the first commercial flight simulator. The simulator mimicked in-air turbulence and other common issues, allowing the military to train pilots during World War II safely.

Several years later, Sawyer’s View-Master debuted at the World's Fair in New York. The childhood toy was a pair of plastic binoculars that allowed users to view single 3D images by inserting stereoscopic reels. In 2015, Mattel announced that sales had reached 100 million devices.

Following the introduction of the View-Master, cinematographer Morton Heilig developed the Sensorama. The machine allowed viewers to experience fully immersive films by sitting in an arcade-style theater cabinet that stimulated all the senses. Then in the 1960s, the first head mounted display was invented, allowing viewers to experience 3D worlds with stereo sound through a single, wearable device.

Throughout the 1960s and 1970s, engineers created several variations of VR headsets, but it wasn't until the 1980s that people started using the name virtual reality. In 1987, Jaron Lanier coined the term while developing numerous VR accessories at his company VPL. And inventing the name virtual reality isn't the only thing VPL is known for — the company also made history by becoming the first to sell VR goggles and gloves.

Over the next decade, VR wiggled its way into mainstream entertainment as users interacted with it in arcade games and gaming consoles. VR was so popular in the 1990s that Hollywood made a blockbuster hit about the technology — "The Matrix".

In the 21st century, we’ve seen rapid advancements in virtual reality. Facebook, Google, Samsung, and Microsoft have all started developing their own VR devices, and with the rise of smartphones, it has never been easier for users to have an entirely immersive, interactive experience.

By now you know that virtual reality can instantly transport you to the moon or the bottom of the ocean, but how does it work? The most common types of virtual reality rely on headsets so we'll start there. Virtual reality head-mounted displays, or HMDs, create immersive experiences with the help of two tiny screens — one for each eye. HMDs are also known as a stereoscopic display. Each screen shows images at a slightly different angle from the other to imitate depth. Virtual reality headsets use foam or other materials around the edges of these screens to block out all external distractions like the light.

Accelerometers and position sensors within the headset provide the necessary inputs to make the experience responsive. By tracking where the user is looking and how quickly they are turning their head or moving it up and down, these sensors allow the screens to respond instantly with new images, mimicking natural vision.

More advanced forms of virtual reality devices can incorporate actions, gestures, and sound into the experience. To interact with objects in the virtual world, users wear special gloves that serve two purposes. The first is to track their hands so they can project into the virtual world and the second is to simulate textures and objects by activating hundreds of tiny components within the glove. With VR gloves, users standing in a virtual reality rainstorm can actually feel the drops of water against their skin and can even reach out within the experience to grab a digital umbrella.

To simulate 360-degree sound, special binaural microphones are used to record the way sounds refract around the human head and ear. These microphones are actually shaped like human heads and can create the illusion that sounds are coming from different places around the user — or even from inside their own head. When combined with ambisonic or 3D audio that responds based on where a user is looking, virtual reality experiences can become even more realistic.

Augmented Reality (AR) vs. Virtual Reality (VR)

We've covered some ins and outs of virtual reality, but you may still be thinking, "all of this still sounds a lot like augmented reality." So what's the difference? Augmented reality (AR) is essentially the precursor to the fully immersive VR experience. In simple terms, augmented reality (AR) is an embellished or altered form of reality where content lays over users' real-world views. The less intrusive technology allows people to add digital assets to their physical environment.

In comparison, VR actually makes the user feel like they're in a completely different world by creating a new digital experience. When using VR, what you see and experience is different from what's actually around you.

But how do you create these immersive virtual worlds? It’s important to note that filming a video for a VR experience is very different from filming a typical video. For starters, filming VR videos requires different equipment and is more expensive to produce. The special video equipment, VR talent, and video editing will cost you, on average, between $13,000 and $20,000. 

Most importantly, VR experiences always need to be designed with your audience in mind. Before you dive into creating an expensive VR experience, think about why you need VR over another type of content like video. Remember that people have almost 180 degrees of vision and unlike standard video, VR requires a 360-degree view. It's also essential to consider motion sickness when designing a VR experience. Because the platform completely alters people's perception and senses, it can cause some viewers to feel nauseous. Try filming fairly still shots so viewers can interact with the content at their own pace.

Make sure the investment is worth your time, energy, and money. While virtual reality is challenging and expensive to create, it can be an incredible piece of content for your company if you have a clear vision and a high-quality production.

Virtual Reality Applications and Examples

It isn’t hard to think of fun and entertaining ways to use virtual reality — years of watching the holodecks on Star Trek along with more recent examples like Ready Player One have shown off the fun side of VR. However, many companies struggle to find practical applications for the technology. Let’s talk through a few ways some industries are already using VR.


While VR has been helping pilots learn to fly for years through flight simulators, imagine the impact VR could have on other forms of education. Lowes recently introduced virtual reality “how to” experiences into 19 of their stores to help teach hopeful DIYers how to correctly complete tasks ranging from painting their home to tiling a bathroom. When compared to people who simply watched YouTube videos on the topics, the virtual reality DIY videos had a 36% higher recall.

And VR isn’t just used by consumers. Walmart is using the technology to help train its employees. According to Forbes, “Soon, all 200 of the company's U.S. training centers will use VR instruction to educate the estimated 150,000 employees going through the program annually.” VR training will help ensure that all Walmart employees receive the same level of training and development.

VR is also being used by doctors, architects, educators, and other professionals to practice complicated procedures and learn challenging subjects. A recent study found that “93% of teachers say their students would be excited to use virtual reality, and 83% say that virtual reality might help improve learning outcomes." For people who are visual learners or have learning disabilities, VR could present a new, viable substitute to traditional learning methods.


Recently, hospitals have started using VR to help patients cope with all kinds of illnesses. A study from Duke University showed that, by moving simulated limbs with VR, paraplegic patients were able to regain some control over their own bodies. The test was so impactful that half the patients got upgraded to partial paraplegics instead of full paraplegics. VR has also been used to treat PTSD and serve as an alternative to drugs to minimize pain. In fact, a 2011 study involving burn victims found VR to be more effective than morphine in reducing pain.

For medical residents, practical VR experiences can also help them train for future procedures. Companies like Immersive Touch simulate the way different tools interact with patients’ bodies to better prepare residents for surgeries. VR training even allows hospitals to save money by replacing pricey plastic mannequins which can cost over $400,000 annually to maintain.

Travel and Tourism

Virtual reality’s ability to digitally transport users to far away places is also being used to encourage people to visit the physical locations. In 2017, Visit Wales created six VR videos to encourage travelers to visit the country. The videos showcased Wales’ natural beauty with shots of the ocean, dolphins, birds, and other wildlife. According to Visit Wales, 85% of people who viewed the videos indicated that they would visit the locations they saw.

VR is used to encourage tourism in places ranging from Australia to the state of Delaware. In addition to attracting visitors, VR also helps travelers plan their trips. In 2017, Expedia introduced VR "try before you buy" experiences for select hotel rooms booked through the site that allows viewers to take a virtual walk around the room and even sample the view outside.

Marketing and Customer Experience

If you're like me, you'd never buy a car without test driving it first. The test drive is the only way to get a feel for the car. But it may not be the only way for long. Volvo’s EX90 experience allows users to take a virtual ride in their newest car using a VR device or their phone. While VR may not entirely replace a test drive, this teaser could help bring more people to dealerships to see the car in person.

In addition to bringing in new customers with immersive product trials, VR can also help retain existing customers by keeping them happy. How many times have you been on a customer support call where you wish the other person could see what you're seeing? With virtual reality, that's now possible. By simultaneously viewing the same experience, issues can be resolved faster and with less frustration.

The Future of Virtual Reality: How SMBs Should Use VR

OK, you're probably getting pretty excited to start experimenting with VR, but before you go out and create your own VR experience, there are a few important facts to consider. The reality of virtual reality is that it may not make sense for all SMBs. Because VR requires specialized hardware to create and use, it's more expensive to develop than alternatives like augmented reality. The number of VR users, while growing rapidly, is also still relatively small with only a couple million VR headsets currently in use. For most businesses, the costs to create custom experiences for this limited audience probably isn’t worth it yet.

However, for some businesses, VR could be a perfect fit. Industries like gaming, hospitality, entertainment, and real estate are great candidates for virtual reality. For the rest, it never hurts to get ahead of the trend by creating a VR strategy to implement down the line. If you do want to incorporate VR now, here are a few tips:

1. Start with your existing audience.

Where and how do your customers engage with your brand? If you have a mobile app or produce video content, these could be great starting places to add VR experiences. For example, StubHub looked at the seat preview feature their users were already interacting with and decided to incorporate a 360 view into the experience.

2. Use VR to expand your customer base.

Virtual product trials, demos, and store walkthroughs allow people all over the world to experience your brand and products at their leisure. This potential gives VR a tremendous power to draw in new customers from across the globe who may have never heard of your brand before.

3. Think like a content creator.

The novelty of VR will only draw in so many people. For long-lasting results, your virtual experiences will need to provide real value and captivate your audience. Think of ways to introduce emotion and intrigue into your VR content. For example, the National Museum of Australia used VR to let people swim with virtual sharks and explore the Great Barrier Reef. VR is an incredible way for people to experience things they never imagined seeing.

Although consumer adoption of virtual reality will likely be a slow process, several roadblocks have already disappeared. In 2015, YouTube began supporting 360-degree videos and Facebook followed suit shortly after. The ability to view VR videos on these leading platforms made the content significantly more accessible. Costs are also coming down for VR equipment. You can now buy a 360-degree camera that shoots in 4K video for under $400. As VR becomes easier to create and view, SMBs with VR content plans will benefit from being able to hit the ground running (even if that ground is just a digital projection).


Virtual reality has a long way to go before it's entirely part of mainstream content, but many companies using the technology are already seeing impressive results. Growing companies should keep up with the technology as it develops and continue to look for opportunities to create a VR experience. While it doesn't make sense for every business to invest in VR now, new advancements could make it easier (and cheaper) to create content in the future.

Virtual reality presents users with the fantastic opportunity to immerse themselves in entirely new experiences. It may take awhile for consumers to adopt this technology, but we only see it continuing to grow in popularity. After all, who couldn't use a break from reality?

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