Awesome Rocketship's G8 VR installation.

VR’s Future: At Home and Abroad

on Wednesday, Aug. 24th

This piece needs to start with a confession.

Despite being completely enamored with virtual reality for the past three years I still don’t own a Head Mounted Display. Part of the reason is the cost: a top-of-the-line kit can run a few grand when all is said and done. That’s if you want to bet it all on one of the available HMDs. With two strong contenders in the market—Oculus’ Rift and HTC/Valve’s VIVE—it’s difficult to choose.

Over the next few months the choices are just going to get murkier: Sony has PlayStation VR, Google is spinning up their Daydream project, and who knows what 800-pound aluminum and chamfered edged unibody gorilla Apple might be forging in their secret laboratories. At least the Oculus/HTC battle will be a little clearer come this fall when the former’s motion controller solution is made available.

Yet what VR HMD to buy is pretty much the definition of a first world problem. Still: the relative shallowness of the consumer market at present didn’t stop 1.1 billion dollars being poured into the VR and Augmented Reality industry in the first two months of this year alone. (The largest chunk of that being put in the still in stealth-mode AR company Magic Leap.) At times it feels like no investor wants to be left behind on what has been foretold as the absolute future of media.

Which is why I was lucky when I got a chance to talk to Michael Yang of Comcast Ventures last week. Yang heads up that group’s efforts in the VR/AR space, and his dance partners are some of the best in the business. On the content side of things Comcast Ventures has backed Felix and Paul Studios and Baobab Studios, and they’ve made a bunch of strategic investments in social VR, live stream technology, and AR hardware.

What was most interesting about our conversation was that Yang sees the VR story as a tale of two countries: the USA and China. The Chinese market is taking to VR like wildfire. Seven of his portfolio companies have at least taken meetings in China this year, and that kind of action mirrors other reports I’ve seen about the depth of interest in this new medium.

From Yang’s point of view, the action in China is going to be split between mobile and the out-of-home markets. The former is easy to grasp: it’s devices like Google’s Cardboard and Samsung’s Gear VR. The later feels like a throwback to the arcade heyday of the 80’s: VR installations at movie theaters, theme parks, and at dedicated venues.

In China, there are already deals in place to put VR into internet cafes and open up dedicated VR theme parks. The kinds of high-end HMDs that dominate tech blog headlines here in the States might not make a splash there at all. They won’t even have to in order to be successful if they are drawn into these out-of-home experiences.

Here in the states The Void, a Utah-based company, has already opened up a dedicated VR attraction in New York City as part of a tie-in to the Ghostbusters reboot. Movie theater chains like IMAX have announced plans to open VR lobby experiences, and then there’s the Venice-based Awesome Rocketship which is marketing a kind of plug-and-play VR installation both here and abroad. That’s their G8 configuration in the image at the top of this post. (Bryan Bishop of The Verge has a great write-up about the burgeoning out-of-home VR business.)

As consumers like me wait for the smoke to clear on the at-home VR war we might find ourselves standing on the sidelines of a scorched battlefield. Direct to consumer VR still faces a chicken and egg problem when it comes to software and hardware. Without compelling content there’s little reason to buy an HMD if you’re not the kind of person who just has to have the latest and newest gadget. Without a big enough of install base there’s little reason for content creators to invest in that compelling content.

Now I know it feels like we’ve been here before with video games, but that market was cracked open by the arcade craze of the 1970’s and 80’s. Without the Ms. Pac-Mans and Donkey Kongs of the world there would have been no real market for the incredibly sad at-home adaptations that were first available. The advancements in computer graphics since that time have only made the challenge of making compelling at-home VR all the more difficult. Your average consumer isn’t all that forgiving when it comes to graphics that fall short of photorealistic standards these days.

So there’s a version of the medium term future where the market in China, which seems from afar to have the kind of neophilia that defined the U.S. in the 90’s, becomes the refuge for virtual reality. We’ve seen tech markets expand in Asia faster than the United States before. Until the advent of the iPhone the mobile phone market there was lightyears ahead of the sad flip phones that Gen Xers like me used to sport.

Shanghai and Beijing may end up being to VR what Hollywood was to the motion picture industry.

This might seem innocuous enough on a business front—much of the hardware is going to be manufactured there, after all—but from a cultural standpoint we might want to take a pause before getting excited about our global content future. If China is going to define the VR market then Chinese censors are going to have a firm hand in shaping what does and doesn’t get made.

We can already see the power of the Chinese box office in the motion picture industry entering into the conversations of the film trades. The global success of tentpole films like the aforementioned Ghostbusters and works like Warcraft, Star Wars, and even Avatar are all shaped by the Chinese market. In Ghostbusters case the film was doomed from the start: Chinese censors don’t dig on supernatural themes. Warcraft looked like it had a chance to be a hit internationally thanks to China after tanking here in the States. No one alive seems to want an Avatar franchise other than James Cameron, but it remains the number one film of all time in part because Star Wars: The Force Awakens wasn’t able to play the nostalgia card in China.

Now there are upsides to the Chinese movie market being so strong. We wouldn’t have action superstar Donnie Yen in this year’s Star Wars movie if Disney wasn’t hell bent on capturing the hearts of Chinese moviegoers. That’s a win-win if you ask me. Yet the Ghostbusters franchise might be dead in the water no matter what because of its inability to open in Beijing.

That kind of cultural power on an international scale was once pretty much only wielded by the United States thanks to the sheer scale of its entertainment industry and market. Now those same market forces are tipping the scales in favor of China.

If that trend plays out in the embryonic VR market something like The Void’s Ghostbusters experience in NYC might end up being the last time folks get a chance to chase spooks around a haunted house in VR. Not because people wouldn’t enjoy it, but because the return on investments sought in a globalized VR industry means that the money men won’t be too keen to throw cash at something that would have to skip the largest VR market.

Right about now you might be finding yourself asking what it is you can do. The answer is nothing. Not unless you have some kind of mad superpower that can rewrite the laws of market dynamics or change the nature of the Chinese government by wishing alone.

The bright spot in all this is that a mature VR and AR market won’t be as susceptible to the influence of one region over another. Indeed, a situation where the U.S. and its intellectual property holders have silver medal status may end up seeing the kind of quirkier at-home market that we see in Japanese video games and anime.

Come to think of it, as a fan of all that weirdness, that’s a pretty big bright spot.

noble-789501

To Build The VR Education of Tomorrow One Scholar Turns To The Past

There are plenty of folks in the education technology field who are excited about virtual reality as the next great educational tool.

Sponsors

OTOY-Light-Field-Capture-4-600x338

We’re Closer To Our Photorealistic VR Future Than You’d Think (INTERVIEW)

A look into the virtual world of tomorrow with USC researcher Paul Debevec.

spheri2_c

Prepare Yourselves For The Personal VR Video Revolution

Virtual Reality is rapidly approaching a watershed moment.

Ralph Echemendia

Spoiler Alert: Hollywood Isn’t Taking Cyber Security Seriously (LA Film Fest)

Tonight at the Los Angeles Film Festival, squeezed in between movies and red carpet events, a symposium on Cyber Security is being held at the Grammy Museum.

Gumroad Rentals H

Rent Video Straight From Social Media Via Gumroad

The people who brought the “Buy Now” button to Twitter are going all-in on film distribution.

placeholder