Spectra7 is a virtual reality gaming player to watch, says Global Maxfin

Spectra7 Microsystems (Spectra7 Microsystems Stock Quote, Chart, News: TSXV:SEV) is a name to watch in the burgeoning virtual reality gaming market, says Global Maxfin Capital analyst Ralph Garcea.

This morning, Spectra7 announced its latest computer chip, the VR 7050. The chip is designed for gesture recognition processing and motion control capabilities targeting game controllers for the virtual reality gaming market. The company said samples of the VR7050 will be available in the market in the fourth quarter of this year, and that volume shipments will begin next year.

“Replacing the tethered game controller with gesture recognition is critical to the mass market adoption of Virtual Reality,” said CEO Tony Stelliga. “New interconnects based on Spectra7′s VR7050 will now be able to provide seamless transport of gestures and motion data via HMD mounted miniature cameras or sensors, greatly simplifying and enhancing the consumer VR experience.”

Garcea says he believes that both the virtual reality and the wearables market will be revenue drivers for Spectra7. He thinks the VR market may actually surprise to the upside, and notes that tech giants such as Google, Samsung, Microsoft, Sony and Facebook, with its recent purchase of Oculus, are driving the consumer market. The analyst says the problem with current head mounted display offerings is that standard game consoles are difficult to use because the user can’t see the console.

To solve this problem, companies are producing hand held devices or forward-facing cameras, but these cameras require the ability to process large amounts of information at a high speed. He says Spectra7’s patented signal processing technology in the VR7050 chip enables data transfer up to ten times faster than current formats while reducing cable size and weight by up to 90%. He points out that the VR7050 chip can be embedded in cables, connectors and head-mounted displays without the need for external power supplies or heavy batteries.

In a research update to clients today, Garcea maintained his “Strong Buy” rating and $1.00 one-year target on Spectra7 Microsystems, implying a return of 61.3% at the time of publication.