This post is an excerpt from an article that originally appeared in Electronics 360. It can be read in full here.

On Thanksgiving Day, scores of people were grateful for one thing: the Microsoft Store on Fifth Avenue in New York was open for business.

It was also the first day of the Microsoft Flagship Experience Tour, which hosted demonstrations for fans and the curious about virtual reality (VR) and augmented reality (AR) with Facebook’s Oculus Rift. Viewers watched a holographic image of Jimmy, the blue whale, as he swam in a confined digital area on the third floor of the building. Later they had the opportunity to experience AR while donning a HoloLens, which showed an immersive experience in Manhattan.

For all the excitement that the VR market generates, VR devices are nowhere near reaching a mass audience. Yet the tremendous interest and astronomical growth potential could reach $120 billion by 2020, according to Digi-Capital’s Augmented/Virtual Reality report.

Though the VR and AR market remains in the toddler technology stage, market research firm IDC, in August 2016, at the height of the Pokémon Go craze, estimated the VR and AR market to be $5.2 billion.

“We’re all seeing this path of opportunity,” Mike Boland, chief analyst of BIA/Kelsey, and chapter president of the VR/AR Association, San Francisco, told Electronics 360. “It’s kind of all on faith—we believe that this will be the next major technological transformation or shift.”

As VR and AR continue to expand in new directions in the technology industry, Boland points out that the technological shift began in the last 30 years with the PC, moved to the internet, and then to the introduction of smartphones.

The following are projections for 2017:

  • Content creation will fuel headset purchases and will be the driver of high-end VR purchases.
  • VR arcades will allow people to pay by the hour and not own the equipment, harking back to video arcades from past decades.
  • Adoption of three major HMDs, or head-mounted displays: PlayStation VR, Oculus Rift and HTC Vive.

People will not be incentivized to purchase headsets if the content is not there, while creators wrestle with the costs if a market does not exist. But, Boland pointed out, “It’s slowly being chipped away by people creating cool stuff.”

“With all three on the market now, I believe there’s going to be a lot of price competition that will start to drive the price down and make it more tenable for mainstream audiences.”

Read the rest.