Virtual Reality (VR) & Augmented Reality (AR) Application Development Costs Explained

The extended reality (XR) market, which encompasses both virtual and augmented reality applications is expected to reach $300 billion by 2024.

This is definitely an exciting time for immersive technology. Microsoft launched the Hololens 2, Snapchat upgraded its Spectacles 3 to 3D, and RealWear, the creators of a ruggedized AR headset, closed over $100 million in funding and have rolled out an impressive device and platform for industrial applications.

Quite the exciting time to be alive as a development studio for XR tech. But where does that leave businesses looking to develop internal applications for a variety of uses? How much does it exactly cost to step into the immersive technology world? And once there what kind of costs are associated with upkeep, maintenance and support down the road?

In this article, we will look to answer some of those questions and provide a first-hand perspective as to what kind of costs are associated with the development of VR & AR applications, so that you the consumer or business executive can get a better grasp on what to expect when quoting your own application development. It’s quite a complicated process to scope out so for the sake of simplicity you can expect a lot of ballparks to keep things short. Costs can vary greatly based on complexity and orders of magnitude which really depend on the specific requirements. Fortunately, if you have an idea or framework for what you are looking to develop, a ballpark development estimate is definitely possible.

Virtual Reality Development Costs?

VR application development cost comes down to the kind of content you are looking to create. Sometimes you will need a mobile VR application, other times you are looking for a VR game. Some applications can be built with simple 360 videos, while others will be built in full CG-based environments. The scale and complexity of each obviously will add or subtract to the total cost of development.

360-3D Interactive Video Costs: $10,000 for each minute filmed + post-production.

CG-based Environment Applications: Between $40k and $70k for a non-gaming mobile VR application.

CG-based Gaming Applications: Between $50k and $100k for gaming-based projects.

Which these are simply ballparks, they should provide a good baseline to work from and give you an idea of what to expect when quoting your own specific project. Numbers can obviously increase greatly based on the scope and complexity of projects.

Augmented Reality Development Costs?

AR application development is much similar to VR development although requires much less overall development since a lot of the time it is more than likely simply 3D objects being overlaid onto the real world.

Marker-Based Augmented Reality

Marker-based AR or Image Recognition based AR provides more information about a scanned object after the user focuses on a pre-defined marker or sticker. An object is detected with a front-facing camera and then proceeds to provide information on the screen regarding the object. This allows the user to view the object in more detail from various angles or potentially rotate the image in 3D as well.

Marker-based AR Costs: $5-10k per 3D modelled object interaction and UI

Pre-Defined Room Scale Augmented Reality

A pre-defined room-scale AR application allows the user to walk into a room that has been pre-scanned and overlay a visual aesthetic that showcases various objects laid out in the scene. This is useful for retail stores or large areas with many waypoints or objects that need definition. Pre-defined AR works through reading data from a mobile device’s GPS, digital compass and accelerometer and predicting where the user is looking. This type of augmented reality is all about adding location information on screen about the objects that can be seen from the user’s camera.

Room Scale AR Costs: $40-50k per room dependant of the number of objects.

Plane Projection / Gyroscopic Augmented Reality

This type of AR will allow the user to detect if there is a flat surface and scans that surface to use a pivot point or origin for projecting the user’s 3D model or object. Once the plane has been set the user can then manipulate the 3D object in a variety of ways as well as interact with said object.

Plane Projection / Gyroscopic AR Costs: $15-20k per 3D object dependant on interaction complexity.

Wearable Based Augmented Reality

This kind of AR requires specific hardware in order to overlay objects in the user’s retina through a wearable device. This allows for much more in-depth visuals with a field of view that will be present wherever the user is looking.

Wearable Based AR Costs: $50-100k range for developing full-scale AR applications.

Along with AR development, many applications will require additional features that are above and beyond the scope mentioned above. These will often include pricing out the following features: Log-in, Payment integration, Support of several languages, Analytics tools, Support & Updates, and Hardware.

Further Factors That Affect Development Costs

Research & Development

When developing a VR application there is typically an R&D phase during which a creative storyboard is outlined and a variety of the best options for development are laid out. Development teams ofter will need to pause and research the best ways to implement functions and features. Sometimes with new immersive technology, there is no baseline to work from past iteration, which leads to time spent on researching and developing the best ways to make a design work.

During the development process, there is usually a quality assurance and testing period near the completion of the project. In this phase development, teams will need to test all iterations of the experience developed in order to find bugs and issues that may arise.

Agile Project Management Methodology

Most professional development studios that are worth their weight will utilize an Agile methodology for VR or AR development processes. Agile makes certain that all projects are developed with collaborative iteration, flexibility and clarity. This leads to a higher quality development process and inevitably a better quality product or end result. Agile methodology has been proven to reduce costs and less reworking as well as management load.

360 3D Video vs. Interactive Experiences

Not every VR application needs to be developed in a truly “virtual” environment crafted from the ground up in CGI. Many times a 3D 360 video is a great medium of choice for a plethora of developments. Many training programs, for example, can be replicated from a live 360 3D video recording and easily played back in virtual reality which provides a unique learning environment and is much more cost-effective than developing that exact same environment in CGI.

Generally speaking, the professional 360 3D video post-production can be done for less than $10k/minute, whereas the same CG-based environment will run costs nearly double that. It is much less time-intensive to produce, record, edit and play 3D video from start to finish than to create an immersive VR experience.

Although it will be an immersive experience, please note that 3D 360 video is not truly VR. However, professional development studios will be able to add overlays and voice-overs to make the 360 video experience interactive and immersive which lends itself well to a VR experience.

Delivery Device & Platform

One of the other factors to consider when developing an immersive application is the delivery method by which you will serve up your experience. There are high-end VR systems like the HTC Vive Plus or the Oculus Rift that will provide a much more vivid experience and can utilize the best of high-end GPU cards. Inital development for interactive CG-based applications on these high-end platforms will carry a lower cost because they require less optimization. When scaling however, the costs will increase drastically due to the higher cost of computing and IT infrastructure and management resources required.

Whereas on the other side of the spectrum, developing for devices like the Oculus Quest and Vive Focus Plus will limit the potential for high-end graphics given that lightweight processing power and GPU’s available for your disposal. Given the limitations there is a higher amount of downsampling and optimization required. This makes the initial cost for developing for these platforms higher than high-end platforms, however when scaling, the costs decrease as there is less infrastructure to maintain (as well as hardware costs being less as well).

Developers will be able to develop for these platforms much quicker due to the limitations, but also will potentially have to spend more time on R&D to ensure certain elements can work correctly given the GPU limitation.

Current Virtual Reality Platforms

Keep in mind some feature-rich mobile apps that are built for enterprise can carry costs up to $250k for the full app development process due to complexity will enterprise management systems and IT infrastructure implementation.

Final Thoughts

Given all these considerations you should now have a better idea of what costs are associated with developing immersive technologies. When developing you must consider who your target market is as well as which platform is best suited for providing the features and capabilities you want in your application. Once you have a better understanding of these key concepts you will be able to decide what the best route is for your specific needs. In future articles we will dive into more detail around costs associated with building an in-house development team vs. outsourcing.