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Virtual reality is pushing gaming into another ‘golden age’: Xbox co-founder

Otto Berkes is a pioneer of the gaming industry.

In 1998, along with Kevin Bachus, Seamus Blackley and Ted Hase, Berkes founded Microsoft's Xbox just as video gaming was entering its next phase.

It was four years after Sony had released its first PlayStation console and was developing its next generation PlayStation 2. The first Xbox came to market in 2001, just a year after the PS2, amid a huge boost in graphics and processing power.

A person using PlayStation VR
Chesnot | Getty Images
A person using PlayStation VR

The Xbox and PS2 were two of the most popular consoles ever and now gaming is entering "another golden age", according to Berkes, driven by virtual reality (VR) and artificial intelligence (AI).

"One of the aspects of VR that has incredible potential is interaction and communication – interacting with characters that are both artificial and virtual, being able to blur distance and geography, you can be anywhere and literally in any time," Berkes told CNBC in an interview on Wednesday.

"We're entering another golden age of interactive content development."

Hardware revenues from VR headsets, peripherals devices and 360-degree cameras will reach over $50 billion by 2021, up tenfold from an estimated $5 billion in sales this year, according to analysis firm Juniper Research. And it's the gaming giants which are driving the initial uptake of this technology.

Sony launched its PlayStation VR headset last month while Microsoft's Xbox unit is slated to be bringing out its rival offering out in 2017.

But the technology is still in its early days with limitations still apparent, according to Berkes. The Xbox founder – who left Microsoft in 2011 and now is the chief technology officer at software company CA Technologies – said that in the future, a person's entire body could be mapped into a game without the need to wear or hold anything but the headset.

"I think the interaction needs to be natural, there is a little bit of a disconnect right now when you put on the headset. The implementation is well done, you are transporting them to the space, but you put your hands out in front of you and they are not there. I think we've crossed the first big threshold which is the visual and auditory aspects of VR, but the interaction piece still requires a bunch of work," Berkes said.