Six UK virtual reality startups were awarded £210,000 by Innovate UK, a government-backed tech initiative last week. 

Now it's forecast to create $150 billion (£97 billion) in revenue by 2020, virtual reality is no longer just a fad. 

The Oculus has taken off since Facebook bought the company ©iStock/Sergey Galyonkin
The Oculus has taken off since Facebook bought the company ©iStock/Sergey Galyonkin

However startups building products off the back of Kinect, or Oculus are struggling to make money or viable business plans, as the technology is in its early stage. Samsung, Facebook and Google may have invested heavily in virtual and augmented reality, but it needs practical applications to get investors’ wallets opening and businesses onboard.

Bringing virtual or augmented reality into healthcare could have a dramatic affect on people's quality of life, yet startups in the UK are struggling to get past the proof of concept stage, including BAFTA-nominated Reflex Arc, one of the IC Tomorrow competition's winners. 

Reflex Arc developed augmented reality games that work with a Microsoft Kinect to help kids learn sign language and assist the blind with exercising.

The startup, cofounded by Richard England four years’ ago, began as a stroke rehabilitation project, using motion sensors to encourage movement. 

Using the Kinect, England and his partner could create games that allowed stroke patients to relarn how to use their bodies upon leaving hospital. Initiatives like these could eliminate risk of relapse  - and spell huge cost savings for the NHS. 

Last year, while England’s father was recovering from knee surgery, he realised that Reflex Arc's stroke technology could be applied to children recovering from operations or learning to live with disabilities, and began working with physiotherapists to test out their games.

The startup, which counts the BBC, The National Media Museum, The National Trust and The Guide Dogs for the Blind Association as clients already, uses a range of languages including HTML5 (JavaScript), Unity, OpenFrameworks and server side technology (Node or PHP) to create educational games.

Now it’s been awarded the £35,000 from Innovate UK, England says they can work on their proof of concept. But again, the real difficulty lies in creating a viable commercial plan for the product, he says.

'Previously, it took about a year to get into hospitals'

He explained that while there is funding to develop early stage products, selling and marketing products that aren’t medicines or equipment to insurance companies or hospitals will be a challenge.

It’s often something that people skilled in virtual or augmented reality have little experience. Equally, medical heavyweights have little understanding of using entertainment-based tech to help patients.

“Previously it took about a year to get into hospitals to be able to test our games on patients. We work with physiotherapists to test our games on their cohorts and rebuild in an agile way. But now we’ve got medical partners on board through the IC Tomorrow competition, it will help immensely.

"It’s been a real struggle to find people to test it out on,” England tells Techworld.

Formulating a business plan is just “theories” at the moment, England explains, as there is no clear roadmap for innovative technology like this in the health sector. They hope that a partnership with Queen’s University in Belfast will help clarify the questions around launching - and who to sell to.


Funding aside, Virtual Reality itself is a challenge, England adds.

The technology is really promising but it’s not quite at the consumer level - especially for the things we want to do.”

But Facebook’s investment in Oculus has accelerating its development and put pressure on competitor HTC’s virtual reality, Vive.  

“I expect it to mature within two to three years and then we can get to a steady rate of building and testing, but hopefully we will be in hospitals before then.

“At the moment, you’re tethered to a computer. Within the confines of a hospital it’s fine outside of that it's off-putting.”

Testing out the stroke-patient rehabilitation game © Reflex Arc

Once Samsung’s headset gains momentum, pressure from consumers may help with development too, but ensuring virtual and augmented reality is mobile will be crucial.  

Matt Sansam, Programme Manager for IC tomorrow, which ran the competition says: “VR and AR are two of the most eagerly anticipated technologies in the world at the moment. This contest looked for applications beyond gaming and the response from the UK’s entrepreneur community has been fantastic.

“Many of these winners are pioneers in their field, bringing together the physical, digital and virtual in completely new ways to tackle real world challenges.

“Innovate UK is committed to building relationships between the biggest industry players and talented entrepreneurs. We look forward to supporting these exciting businesses in their trial partnerships.”

IC Tomorrow has opened applications for another funding round, for artificial intelligence, sensor and data analysis projects in the UK. Sign up here.