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Signature Redacted Center for Real Estate January 11, 2019 The Implementation Strategy of Virtual & Augmented Reality for the Real Estate Industry by Kaini Huang B.A., Architecture, 2011 Shanghai University Submitted to the Program in Real Estate Development in Conjunction with the Center for Real Estate in Partial Fulfillment of the Requirements for the Degree of Master of Science in Real Estate Development at the Massachusetts Institute of Technology February, 2019 2019 Kaini Huang All rights reserved The author hereby grants to MIT penrnission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Signature of Au thor Signature redacted Center for Real Estate January 11, 2019 Certified by_ Signature redacted Dr. Andrea Marie Chegut Research Scientist, Center for Real Estate Signature redacted Thesis Supervisor Accepted by Professor Dennis Frenchman MASSACHUSETTS INSTITUTE Class of 1922 Professor of Urban Design and Planning, OF TECHNOLOGY Director, Center for Real Estate School of Architecture and Planning FEB 28 2019 LIBRARIES ARCHIVES This page is intentionally left blank -2- The Implementation Strategy of Virtual & Augmented Reality for the Real Estate Industry by Kaini Huang Submitted to the Program in Real Estate Development in Conjunction with the Center for Real Estate on January 11, 2019 in Partial Fulfillment of the Requirements for the Degree of Master of Science in Real Estate Development ABSTRACT Virtual reality and augmented reality (VR/AR) are computer-generated immersive environments that can interact with users. VR/AR have been under development for 180 years, but they have yet to be adopted by the mass-market. During the whole development process, VR/AR's adoption rates have been much lower than other general-purpose technologies at the same point in time. After the popularization failure in the 1990s, VR/AR were brought back to the public by the success of Oculus, a VR startup that was acquired by Facebook in 2014. It was followed by the exploration of various applications of VR/AR to different industries. One industry that could use VR/AR is the real estate sector, due to the needs for inventing and forecasting the appearance and quality of complex projects. The real estate industry's contribution to U.S. Gross Domestic Product was approximately 15% in 2017. A tiny improvement in efficiency may result in a large growth in this industry; therefore, it is important to study the impact that VR/AR could bring to this sector as disruptive technologies. The current status of VR/AR applications show that despite the strengths and opportunities they could bring, there are still some barriers and challenges for real estate industry adoption. To document these difficulties and strategize solutions, qualitative analyses such as market research and case studies were executed in this thesis. The adoption of VR/AR is limited to date because of the high cost of equipment, inadequate hardware, the lack of attractive content and platforms, and the absence of education. It is also limited by the specific real estate industry challenges, including unknown adoption cost, unpredictable risk, inadequate support from software suppliers, vague regulations, conservative company executives, and VR/AR's disruptive impact on organizational structures. Therefore, solutions from market, policy, and academic aspects are needed to accelerate this adoption process. Thesis Supervisor: Dr. Andrea Marie Chegut Title: Research Scientist, Center for Real Estate -3- This page is intentionally left blank -4- Acknowledgment I would like to thank my thesis advisor, Dr. Andrea Marie Chegut first for guiding me through this thesis and sharing her insightful comments with me during the whole process. Andrea gave me the opportunity to work beside her and other amazing colleagues at the MIT Real Estate Innovation Lab, which has brought so much inspiration to me and my thesis. Without Andrea's help, this thesis would not have been possible. I would also like to thank all the interviewees I talked to for giving me the opportunities to learn directly from industry pioneers. Thank you all for the encouragement and informative conversations. Special thanks to Mr. Xue Congyu, founder of Shanghai Evolutional Virtual Artist Interactive Entertainment Technology, whose entrepreneurial spirit inspired me to write about this topic. Thanks to my classmates and friends who are always there for me. You brought so much laughter to my life which backed me throughout this difficult journey at MIT. Last but not least, I would like to thank my family, especially my parents for supporting me mentally and financially to pursue this degree. Thank you for encouraging me to jump out of my comfort zone and embrace a wonderful new world. -5- This page is intentionally left blank -6- Table of Contents Chapter 1: Introduction.......................................................................................................................... 11 - Chapter 2: Introduction to VR/AR..................................................... .......... .......... ......... - 14 - 2.1 Histo of VR/AR .................................................................................................................. - 14- 2.1.1 Stage One - Early Attempts at Dimensions and Immersion (Before the 1960s)........... - 14 - 2.1.2 Stage Two - Early Attempts at Head-mounted Display (HMD) (1960-1970)....... - 15 - 2.1.3 Stage Three -Formation of the Theories and Early Attempts at Applications (1970 -2000).- 16- 2.1.4 Stage Four -Multichannel Applications and Technology Improvement (2012-Present)- 17 - 2.2 Overview of the M arket .................................................................................................. .- 19- 2.2.1 Financing History of VR/AR .................................................................................. .- 20 - 2.2.2 Cycle and Trend of VR/AR M arket ......................................................................... .-22 - 2.3 Challenges to the Supply Side of the VR/AR M arket............................................................ - 26 - 2 .3 .1 P rice ............................................................................................................................... - 2 7 - 2.3.2 Content........................................................................................................................... - 28- 2.3.3 Platform.......................................................................................................................... - 29- 2.3.4 M obility and Portability ................................................................................................. - 30- 2.3.5 Resolution & Refresh Rate ...................................................................................... -31 - 2.3.6 Latency & Virtual Reality Sickness............................................................................... - 32 - 2.3.7 5G Speed........................................................................................................................ - 33 - Chapter 3: Im plementation of VR/AR in the Real Estate Industry........................................................ - 34 - 3.1 M IT Virtual Experience Design Lab (VEDL)....................................................................... - 36 - 36- 3.1.1 Introduction.................................................................................................................... - 37- 3.1.2 Challenges...................................................................................................................... - 3.1.3 Projects........................................................................................................................... 41 - 3.1.4 Lab's Responsibilities and Vision.................................................................................. - 43 - 3.2 Gensler - A Leading Architectural Design Firm .................................................................... - 45 - 45- 3.2.1 Introduction.................................................................................................................... - 3.2.2 Advantage and Challenges............................................................................................. - 47 - 3.2.3 Projects........................................................................................................................... 49 - 3.2.4 Goals and Vision............................................................................................................ 49 - 3.3 Suffolk Smart Lab - A New Technology Focused Department in a Leading Construction Contracting Company ........................................................................................................................ 50 - 3.3.1 Introduction.................................................................................................................... - 50- 3.3.2 Challenges...................................................................................................................... - 51 - -7- 3.3.3 Projects........................................................................................................................... 53 - 3.3.4 V ision............................................................................................................................. 55 - 3.4 Evolutional Virtual Artist Interactive Entertainment Technology Co. - A VR/AR Consulting and Project M anagem ent Platform Provider.....................................................................................
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