The numbers are stunning for a new technology. By 2020, annual revenue from Virtual Reality devices will reach $21 billion, predict Gartner and Bloomberg Intelligence. By then, more than 30 million VR devices will ship every year, asserts Forrester, with demand coming both from consumers and companies. No wonder Mark Papermaster, Chief Technology Officer of chip maker AMD, calls Virtual Reality the “next one billion people opportunity.”

Few technologies have raced through the proverbial technology hype cycle in such a short time as Virtual, Augmented and Mixed Reality. These three technologies are closely related but distinct. Virtual Reality goggles take the user into a completely artificial world. Augmented Reality glasses allow you still to see where you are and overlay information and apparent objects onto the real world. Mixed Reality combines both, weaving a thorough virtual experience into the real world; it aims to truly blur boundaries between the real and the virtual. All three make digital information, entertainment and productivity tools not just interactive, but immersive.

The sector’s hyper-speed evolution may explain why the novelty hasn’t yet worn off. Wherever there’s a VR experience, you can expect a crowd – whether it’s in Las Vegas at CES, in Barcelona at Mobile World Congress, or at IFA Berlin, the world’s largest consumer electronics show.

Two years ago, there were just a few early conceptual videos and prototypes. The first high-end VR devices, Oculus Rift and HTC Vive, reached the market only a few months ago. But already there is an end-to-end VR/AR ecosystem. At this year’s IFA, more than 35 companies showcased devices and applications.

Companies have rushed in and are ready to hit the market with products that often are genuinely entertaining or meet business needs. Russian VR start-up Fibrum’s virtual rollercoaster ride has been downloaded more than 10 million times. Epson’s new AR glasses not only make it easy to control a far-away drone, they also allow you to race bicycles with a friend – while you both work out in a gym. Then there are AR applications that help you to guide far-away colleagues through complex repair and maintenance work; you can remotely demonstrate every single step.

Most customer-facing industries will see useful applications. In retail, AR and VR allow you to experience products before you buy. Concert promoters demonstrate 360 degree views from each seat, while travel firms take you – virtually – poolside and into your holiday villa. Architects can construct a virtual life-size model of a still-nonexistent home, and take clients “inside.” Whether you have donned a VR headset already or have yet to join the 20 million plus people who – in the U.S. alone – at its peak were playing the AR game Pokémon Go (catch a Charizard?), it’s obvious something big is happening.

 Virtual reality users
Image: Statista 2015

But here is the multi-billion dollar question: Has VR/AR truly reached the final stage of the hype cycle – the ‘plateau of productivity’ – or could it falter and become the industry’s next “3D”? To predict the success of immersive media, let’s look at the industry’s three distinct approaches for delivering such experiences.

Basic: To augment your reality, you only need a smartphone camera (for example, to play Pokémon Go). For a basic but slightly more immersive VR experience, a cardboard box holding a couple of lenses and enveloping your smartphone will suffice. The New York Times distributed Google Cardboard viewers to all its U.S. print subscribers last year.

Workhorses: The mid-range approach also uses your smartphone, but with software and goggles to dramatically improve the VR experience. Examples are the Zeiss VR One Plus and the Samsung Galaxy Gear VR, both well under $150. It’s “virtual reality for everyone,” and the most popular gateway. But VR demands massive bandwidth and storage capacity; four minutes of content may require a 500 MB download.

High Performance: This is the cutting (or maybe bleeding) edge of Virtual and Augmented Reality. Headsets like Oculus Rift and HTC Vive deliver truly immersive graphics, because they connect by cable to a high-spec desktop computer (or for Sony’s version, a game console). Staying tethered to a computer is limiting, and the quality of their displays is about the same as smartphone-based VR. Such systems are also expensive–$600-800, though prices are falling fast.

Smartphones already are the perfect “gateway drug” to VR and AR; the step from a 360 degree video to a fully immersive experience is small. While cameras to shoot VR content were virtually nonexistent only a year ago, there are now many.

And this is just the first generation of devices, in an age when mobiles and wearables are changing at huge speed. Compare the smartphone on which you may be reading this article to the bricks that were mobile phones not that long ago. Now look at today’s bulky VR headsets and grainy images and re-imagine them five or 10 years from now. Already there are patents for VR and AR devices the size of contact lenses.

If you doubt the power of the experience, try out Microsoft’s still-unreleased Hololens. Using this Mixed Reality device, which I’ve tried, feels like stepping into a Star Trek-style science fiction movie. Still, three hurdles hold these technologies back for the time being.

It must be social. Right now, these technologies are solitary pursuits. But it will probably be shared experiences that result in a real take-off. Facebook is most committed to making this happen; after all, it bought Oculus Rift.

AR and MR risk distorting the world. Many of us already worry about the echo chambers and filter bubbles created by social network algorithms. What if this augmented information is merely propaganda – not what’s there but what someone we shouldn’t trust would like us to see? Virtual Reality, by contrast, might be a counterpoint, with an ability to foster empathy. What’s more compelling: reading about suffering or experiencing it – virtually – from close-up?

VR, AR and MR are security risks. As we build immersive media experiences – whether for business or entertainment – the need to secure them grows exponentially, for the very reason that they are so immersive and thus persuasive. Imagine a hacker or unfriendly nation-state gaining control of our in-goggle experiences.

Mobile devices changed our relationship with information, entertainment and technology. VR, AR and MR will trigger an equally-fundamental paradigm shift. This time though, the pace of the next digital revolution will be measured in years, not decades.