STOCKHOLM - An accidental breakthrough in a Stockholm laboratory 15 years ago could reap a fortune for the engineers who made it - as long as they can win over some of the most demanding consumers: video gamers.
Since John Elvesjo noticed a sensor tracking his eye movements in a lab experiment, the technology he developed with Henrik Eskilsson and Marten Skogo has helped disabled people use a computer by identifying where they are looking on the screen.
The system uses invisible infra-red light to illuminate the eyes. Camera sensors capture the reflection off the retina and cornea to gauge where the eye is, and where it is looking.
The mass-market potential looks almost limitless. Advertisers could adapt billboard images depending on where you rest your gaze. A car could alert you when you're about to fall asleep. Eskilsson says eye tracking will one day be found in all laptops, smartphones, tablets and automobiles.
First up is the computer gaming hardware market. As a player looks to one part of the screen, the image will pan across the landscape and open up a new field of vision.
Whether it catches on in the fiercely competitive gaming industry could depend on a deal struck this year between Eskilsson's company Tobii and Ubisoft, maker of blockbuster game "Assassin's Creed: Rogue".
Tracking the player's gaze, the eyes of warrior Shay Patrick Cormac look across seascapes, forts and battlefields as he hunts assassins in North America during the Seven Years War in the PC version of the game.
The success of this and other tie-ins is the biggest test yet for Tobii, which is making no revenue from supplying its technology for the deal.
The aim is to get enough players interested to lure other gaming companies for deals that would bring in revenue. So far it has a handful of other tie-ins and Eskilsson said eye-tracking will have to reach at least 30 to 50 games before it can be regarded as mainstream.
The prize is huge: Tobii's sales ambitions suggest an overall market for gaming eye-tracking sensors that could top US$5 billion (S$7.1 billion) a year in revenue, about six times the firm's market value. "Eye-tracking makes it possible to create a more human device," said Eskilsson at Tobii's Stockholm headquarters, his laptop slipping into standby mode after noticing that he had looked away. "Not only by steering with your eyes, but with hands, voice and where you are looking. All put together."
The company faces further hurdles before it can break into the far larger smartphone market.
Fund manager Inge Heydorn at Sentat Asset Management in Stockholm compared Tobii's gaming-focused business to a hard-to-value stock option and said its sensors must become cheaper and smaller and consume less energy if they are to be used for smartphones packing far less battery power than laptops.
"They don't know if they will get power consumption down. We don't know. Nobody knows," said Heydorn, who holds no Tobii stock.
Tobii dominates the market for now - its US$75 million in 2014 sales is five times that of its closest rival among about 20 eye-tracking technology firms - by selling sensors as disability aids and for behavioural studies in research.
Keeping that edge may prove a challenge now that big technology firms, some of them Tobii customers, are looking at whether to develop their own technology.
South Korean giant Samsung's latest phone reads the position of the user's face, something Eskilsson sees as a precursor to full-blown eye tracking.
Tobii's deep-pocketed backers include Swedish group Investor , with a 19 percent stake, Intel Capital and early Spotify investor Northzone, both with roughly 8 percent.
Expectations for profit growth are sky-high and Tobii's share price has almost tripled since its April listing. The company is investing about 150 million Swedish crowns (S$24.4 million) annually to expand in PC gaming. "It's going to take a couple of years for that to become a volume market. It's not 10 years away, but within a couple of years," said Eskilsson.
Hans Otterling at third-biggest shareholder Northzone said Tobii was "totally capable" of carrying on by itself, without being swallowed by a bigger company. He said its value lay in the range of areas where eye-tracking may be applied. "Imagine a surgeon, his hands free, able to steer things with his eyes. There is really just your imagination setting the limits," he said.