CES 2017 Day One Summary

By David Kretzmann Markets Fool.com

Greetings from Las Vegas! We've made it to CES 2017. This four-day tech extravaganza, now celebrating its 50th anniversary, isn't lacking for things to see -- the show covers nearly 2.5 million sq. ft. this year. Our Motley Fool team hit the ground running to get an initial glimpse of the tech and trends that will define the rest of the week.

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The future of gaming and more

I expect a lot of talk this week about virtual reality (VR) and augmented reality (AR) -- relatively new computing platforms that carry the potential to transform how people interact with technology. At present, there is no clear winner yet with either of these emerging platforms. Facebook (NASDAQ: FB)has Oculus, and Google is doing its part with Daydream. Another key player in the virtual reality landscape is HTC(NASDAQOTH: HTCXF) Vive, which recently hosted an event showcasing the company's latest developments in VR.

It can be difficult to understand the potential of VR until you try one of the headsets on for yourself. Consider this: While at CES, I tested a VR experience that simulates a fireman putting out a fire in a home. I was outfitted with a special fireman's jacket which produced more heat as the size of the simulated fire grew. To put out the fire, I had to use a prop firehose controller which responds with jerking motions and increased pressure depending on the flow of the water in the simulation. For firemen in training, such an experience -- with the heat from the jacket and the pressure of the firehose -- could be a component of their training routine that normally can't be safely simulated in the real world. I'm sure there are thousands of other potential use cases for VR well beyond the world of gaming.

I also had the chance to check out a more typical shooter game, where I was outfitted with a heavy gun controller and put on a vest that provides haptic feedback -- in other words, the vest would vibrate in different areas as I got shot by the aliens in the simulation.

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Both of these props made the experience all the more immersive, and perhaps a little more realistic. My arm was tired from holding the gun by the end of the three-minute simulation (maybe I just need to lift weights more). Those aliens put up a good fight!

VR still hasn't broken out into the mainstream the same way smartphones burst on the scene around 2007 with the launch of the iPhone. Some of the biggest obstacles for VR include a limited selection of games and content (at least today), pricey VR systems (Oculus costs $600 and HTC Vive costs $700, and that's without an even pricier PC to power the system), and the fact that VR setups require a lot of space.

One way HTC Vive is combating these shortcomings is via arcades. This opens the door for people to experience VR without having to pay up for their own console or headset. HTC Vive recently stated its goal was to turn "public virtual reality gaming" into a $100 million industry over the next two years. I see this as an attractive model to bring VR to a wider audience in a time when VR systems aren't personally accessible.

Look ma, no hands!

Another area that we're sure to see more of at this year's CES is self-driving cars, also known as autonomous vehicles. Yesterday, we made our way to an event put on by Hyundai, which gave us the opportunity to go for a ride in the company's autonomous Ioniq model.

Much of the technology used in the car, including the sensors and cameras, was developed in-house by Hyundai -- with the exception of a Mobileye camera -- and is still early stage. Once the human driver got us out of the parking lot, the car went into autonomous mode and proceeded to take us around the block without a human touching the steering wheel. The car stopped at a red light, turned when the light went green, and performed all the typical driving functions that you'd expect from a car.

And this brings me to NVIDIA (NASDAQ: NVDA), which stole the show for the day -- and possibly the week -- with its keynote presentation on Tuesday evening. Shares of NVIDIA more than tripled in 2016, making it the top-performing stock of the S&P 500 for the year. Since the company's founding in 1993, NVIDIA has largely been tied to PC gaming graphics. The company has since branched out to use and develop its technology for other applications like autonomous vehicles, virtual reality, and machine learning (helping computers find patterns in complex sets of data, for instance).

NVIDIA's co-founder and CEO Jen-Hsun Huang made several big announcements during the presentation, starting with the gaming space. Huang called gaming the world's largest sporting event, stating that he believes it is "very, very likely" eSports will one day reach a bigger audience than all other sports combined. Of the two billion PCs around the world today, only half of them have the necessary technology (like NVIDIA's graphic processing units, or GPUs) to play games ... until now, that is.

NVIDIA announced that it has developed a "supercomputer" that stores its state-of-the-art graphics technology in the cloud, which tens of millions of gamers will be able to access. Think of it as on-demand video gaming on virtually any Mac or PC, meaning players will be able to stream a game wherever and whenever they want. This service -- GeForce Now -- will launch in March and could broaden the video game market to millions more players.

NVIDIA is also making strides with the connected home, announcing upgrades to its Shield TV streaming device. Shield TV will now include Google's AI (Google Assistant) -- meaning the TV can be activated and controlled through voice commands -- as well as a wider reach of 4K content from the likes of Netflixand Amazon. NVIDIA also announced the Spot, a small WiFi speaker that plugs directly into an outlet and can pick up voice commands within 20 feet. Roll the Shield TV and Spot together, and NVIDIA is packing a powerful punch in the connected home.

Finally, NVIDIA had a slew of announcements related to its efforts with self-driving cars. Huang calls NVIDIA's efforts in this space "the most impactful work we're doing for society," given the potential to lessen the number of deaths, injuries, and financial costs that occur each year due to human error on the roads. NVIDIA is making strides developing an artificial intelligence (AI) supercomputer for vehicles, which enables a car to go on full autopilot (imagine getting into your car, saying "Take me to Starbucks", and never touching the steering wheel once) or "copilot" where the AI is still assisting the human driver (with heads-up warnings like "A motorcycle is switching to the center lane behind you").

NVIDIA has announced a host of new partnerships with multiple mapping companies around the world, including Baidu, the leading mapping company for autonomous vehicles in China, which will set the foundation for the next generation of self-driving cars to navigate roads worldwide. The company is partnering with two leading global auto suppliers to begin producing its AI computer for autonomous driving (which will start shipping later this year). And finally, NVIDIA announced a partnership with Audi to produce the "next generation" of AI-powered autonomous vehicles by 2020. Jokingly, Huang said, "Let's make sure none of our kids ever have to drive."

With $3.7 billion in net cash, accelerating sales growth, and a leading position to power the computers behind key trends like autonomous driving, eSports and gaming, virtual and augmented reality, and the connected home, I can see why NVIDIA had a blowout year in 2016. Based on the company's presentation and announcements at CES this week, that business momentum seems poised to continue in 2017 and beyond.

Foolish bottom line

We're just at the beginning of CES 2017, and already NVIDIA has set the bar high for the week. The Motley Fool team will be back at it in the coming days, reporting from the front lines on the trends, technologies, and businesses that investors should be watching closest in the years ahead.

Stay tuned for more from us tomorrow. In the meantime, Fool on!

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David Kretzmann owns shares of Amazon.com, Baidu, Facebook, and Netflix. The Motley Fool owns shares of and recommends Amazon.com, Baidu, Facebook, Netflix, and NVIDIA. The Motley Fool has a disclosure policy.