He said the success of Pokemon Go pointed to the future of the technology rather than being the beginning of a serious trend.
Fadaghi said that the two technologies would, to a certain extent, develop side by side and developers should not be placing bets on one or the other.
"Businesses are looking at emerging platforms as an opportunities, and both technologies will present opportunities. AR is going to be more mobile focussed given its overlays of the real world while virtual is going to be about simulated environments for training for example," he added."
According to Telsyte, the wide range of VR products available is also impacting consumer and developer uptake. Telsyte believes that the choice of three main platforms (mobile, console, PC) and four main ecosystems (Oculus, PlayStation VR, HTC Vive/Stream VR, Google Daydream) is impacting consumer purchase decisions. This will be further exasperated with more options in H2 2017.
The firm said its research also shows early adopters are looking for a "distraction from reality", although VR is typically used in small doses.
Nearly half indicated "they enjoy playing online games with friends", 58 per cent indicated "they often feel stressed" and 49 per cent indicated they have "very little free time"
Crucially, Telsyte's assessment of VR hardware and software shows most early devices on the market are in need of advancement to help the overall market grow.
Notwithstanding the health and safety concerns, VR hardware needs to become less visible, lighter and untethered, while software and content developers need to harness the technology better with less "demo" orientated releases, it said.
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