Friday, December 21, 2018

From View Masters to Virtual Reality at a Theater Near You

It's time for the final episode in this series of the Now & Next podcast, and it's all about VR and AR. Both VR (virtual reality) and AR (augmented reality) can be thought of as new technologies, but in many ways they’re not really new at all.

Early sensory simulation devices go back about 100 years. In fact those Viewmasters we played with as kids were a kind of virtual reality.


And not surprisingly the latest View Masters are being built and marketed as affordable consumer VR experiences. It's all about being able to see and experience things that aren’t there in our immediate physical world and using technology to help us do so.

On this episode of Now & Next we’ll hear from Alexis Macklin, an analyst with a San Francisco-based firm called Greenlight Insights that specializes in market intelligence on the VR and AR industries.

Alexis will explain where we’re at in the tech and content development cycles for VR & AR and how the use cases and consumer adoption for these enhanced experiences vary around the world, particularly for location-based entertainment.



Episode highlights

• Are VR & AR close to significant consumer adoption? (2:43)
• What are the emerging opportunities for content producers and creators (6:16)
• What are the key differences between Asian and Western VR/AR markets (10:08)
• What are the sought-after skillsets in the VR/AR sector (16:00)


Full interview transcript


LK: Leora Kornfeld
AM: Alexis Macklin

LK:

So VR and AR and all of these things that were talking about, theyre both new, and then theyre also really kind of not new. Many of these technologies have been around for not only years but decades. So, to quote the kids that are always in thebackseat of the car, “Are we there yet? Are we there yet?”

AM:

I would say were still years away from any sort of significant consumer adoption, thats for sure. On the VR side, were a little closer than maybe those smart glasses for AR especially once VR in this next year becomes more accessible with standalone HDs. So were kind of just waiting for the significant content library and platform availability to come about for VR. Well see that come more into play when theres honestly more things to do in VR. Right now, its kind of more gaming and video watching right now, but as they go around, more social platforms will come about more productivity tools and, honestly, more variety of content. Right now its kind of in for those first person shooters, but were seeing more and more different types of games and video content come about. So we should expect to see a more positivity I would say within the next couple years.

For AR and smart glasses, we definitely have already hit mass adoption for mobile AR since thats already a pre existing technology. So everyone has mobile AR, the problem is no one really knows that they do have AR which is good and bad. It’s a natural technology feature set that consumers dont realize that its a whole new type of platform and technology, which is really great. Its very natural, its a very natural next step for the camera, the smartphone. But when we come into smart glasses, there is no perfect device yet. 

Were definitely far away from seeing that consumer smart glass that is just going to take the world by storm. A big part of this is form factor, definitely second is cost. When we look at something like Magic Leap, its thousands. Look at HoloLens, its thousands. So its something thats a bit out of reach for consumers to add in, especially since they dont know why they would use it.

But we should expect to see 5, 10 years from now a more serious product launch for consumers in terms of consumer adoption, consumers understanding why they would need an AR headset, and better form factors.

LK: 

Now you mentioned, you said everybody has mobile AR. Do I have mobile AR on my phone, ‘cause if I do I dont know.

AM: 

Exactly. So Snapchat is AR. When youre putting those filters on your face, or putting that dancing hotdog in the environment, that’s AR.

LK: 

I refuse to put the cat ears and whiskers on, but but if I did, I would be doing mobile AR?

AM: 

Yes exactly. Or even Pokemon Go, I mean, its basic AR in terms of what well eventually get to, well be able to use it seamlessly and consistently across platforms eventually. But for right now, its a bit more of a gimmick, its a bit more of ayou knowa social aspect to it. So even the Google products now have AR 3D assets that you can take pictures of. 

Probably the most famous was when the Last Jedi was coming out for Star Wars. They had different 3D figures for Star Wars that you could pull up in your camera phone and take videos and pictures with. So its definitely more social right now. Theres some gaming, definitely a big ploy with marketing right now, very interesting marketing feature set right now that sets those mobile marketing experiences apart from the traditional ones. But well see this come more into play as more feature sets come out. Hum, especially with Apple and Google, this year, they both released different improvements on their software to enable multiplayer.

So we should in the next year to two years see a lot of multiplayer AR games that,  you know, youre playing maybe something like table tennis in AR with your phone with a friend. Its something of a shared experience which will definitely put mobile AR on the next level. So well start to see more consumer awareness with things like that, those will definitely gain, gain some popularity depending on the use case.

LK: 

But, didn’t it feel... I mean, I had to look this up, I wasnt sure if the Pokemon Go phenomenon happened last year or two summers ago, it was two summers ago, in 2016. And didnt it feel like, “Okay everything is changing now” because it did get mass adoption. Didnt everything change at that Pokemon Go moment?

AM: 

I would say yes and no. So, it was a very exciting time because this huge game that enabled AR became massively virally popular, and that was really great. But I would say it also didnt change that much as well for the AR community since consumers didnt know that that was AR really, and they didnt really get the point of it. It actually made it a bit harder to play in AR mode than regular well I guess its more of a 3D but the traditional smartphone way to play, to play it. So there was definitely a positive and a negative. It became this rush of developers thinking that “Wow Pokemon Go really worked, let me kind of re-skin that. Let me do something like that and Ill be the next big hit”, but it just doesnt work that way.

Something thats very important with those VR and AR that is something to keep in mind is why Pokemon Go became so successful is because its this very interesting place of wish fulfillment, which is the best form of VR and AR ofyou knowalways wanting to travel to the depths of the ocean, but never actually wanting to go there, well now you can experience that in VR.

LK: 

Without getting wet. You can be a cat [Alexis: Exactly...] without being a cat. You can catch a Pokemon without having a Pokemon, yeah I like that. Wish fulfillment... [Alexis: Exactly...] Is that the sort of industry term thats used for it?

AM: 

I would say its more, Im not sure if its used that often to describe it, but its definitely, VR and AR is, within the industry definitely seen as this endless possibility, being seen as something that can really do the impossible, which is why for enterprise its so promising as well, cause you can do things that maybe are dangerous, hum, as far as training, like learning to fly a fighter pilot in VR... so you can not fall out of the sky and save some equipment at the same time, right? So theres definitely this cool and possible scenario and wish fulfillment, and hum, even cost savings for, for enterprise. But thats kind of what VR and AR, those promises of bringing you into a new reality.

Of course VR is more about the bringing you to a new world, and AR is about bringing the other world to you almost, bringing that, those 3D assets into the real world and eventually will kind of have a mix between the two whereyou knowmaybe youre at work and you decide, “You know, this office space ispretty boring. Let me overlay an AR in my smart glasses, a view of Hawaii out the window so I can pretend Isomeplace else.” So that will become a bit more meld, but thats even further off in the future. So were still pretty far away from that.

LK: 

So, until then, we have to just deal with the screensaver on the laptop that has the picture of Hawaii... I mean, thats what people are doing now, so thats a very, I guess, early version of that wish fulfillment that you talk about.

AM: 

Yeah exactly, yeah.

LK: 

Based on your work and what you see, and you’ve just been it, what was the event that you were at, VRS, is that what it was called?

AM: 

Yes, it was the VR Strategy Conference. So, I was in this conference that we held, hold every year in San Francisco to focus primarily on business strategy within VR and AR. So, for companies looking to get into VR and AR and wondering how to be profitable for them or why they should do it, and then those companies who are working in VR and AR how they can make their ventures better. So, a lot of networking, a lot of discussing about what works and what doesnt and where were going.

LK: 

So, Im, I’m curious to hear, cause this is exactly what Im interested in, are there, are there specific white spaces, areas that are ripe for innovation and experimentation that people arent in yet that are, that could be really big opportunities for producers?

AM:

Yeah, thats a great, great question. I would say for media and entertainment, VR eSports is really coming into its own. Itstill very early days, its only been professionally around for about a couple years or so. But, theres this community that can be built around VR that cant really be built around for traditional gaming. So this can be more of a sport gaming hybrid, if you will, so this is also active. Of course, there needs to be some developments on that. eSports is very grassroots grown, very community orientated. Hum, so its going to take a bit to grow that community before eSports, VR eSports can really take off. But thats some place thats pretty emerging within the VR media and entertainment industry. 

One of the, Im going to call it the worst kept secret right now in VR, is location-based VR. So these are the VR arcades, VR in movie theaters. Its still an emerging sector, especially for North America, its more developed in Asia, especially in China, Japan, Korea, hum, but this is more, if youve heard of The VOID...

LK: 

We have that here in Toronto.

AM: 

Yeah, theres some in Toronto, I know that theres some in movie theaters, in Canada as well, I think both in Vancouver and Toronto, some of those. But yeah, its this whole idea of adding in VR experiences into entertainment, at home entertainment venues. So, whether theyre their own standalone like The VOID or adding in some game experiences as well, 

I think the best example is the Dave &Buster’s, they have this experience where its I believe six people in a car, and theyre in a motion simulator with VR headsets, they have VIBE headsets, and theyre doing a Jurassic World experience. And so theyre all in this buggy and theyre exploring the world and some shenanigans begin. 

They deployed this originally at 114 locations at launch, which is probably the biggest deployment of VR installations in the world yet. But its been going smoothly for them. The Dave & Buster’s CEO has already talked about expanding the experiences, adding more content, adding to all the locations, its been very positive.

But this is completely different as well across the world sinceyou knowentertainment centres in North America are very different from the popular types of out-of-home entertainment venues that are in Asia or even western Europe based off of space alone. Real estate is really important for this factor.

LK: 

What would the differences be between what you see in the Asian markets and in the west?

AM: 

Yeah, I think the big, big one inI mean wow theres so many differences, even when you look at different countries. For the US, its very much a focus on family entertainment centres, especially with, I think, Dave & Buster’s is probably the most famous example. 

But theres a lot of those, whether it’s Topgolf or even something like Chuck E. Cheese, a place where families can go together and spend hours doing different activities. Thats not something thats as widespread or popular in Asia. So, in China, its probably a very famous pastime. Those in China and Japan is karaoke. So, a group of friends get together and decide to go out, and theyyou knowpay for a room and do karaoke for hours,  theyre trying to do that as well with VR. China has a, a very widespread amount of VR arcade locations. So locations that are specifically focused on VR, they also have the free realm like The VOID. Japan has a very, both Japan and Korea have a very interesting culture to where they are kind of molding the two together of the VR arcades and entertainment centres.

So, theres a couple of different centres that are just VR focused, but theyre huge like a Dave & Buster’s, so you can go try. Theres simulators to where youre going up in a hot air balloon, theres definitely the roller coasters, theres definitely different games as well, theres a VR Mario Kart. But, all the IP are pretty unique, so all the different games are very unique to the culture in Korea and Japan. They have a lot of original content that isnt seen anywhere else. But also, when you look at India, they, there is a very interesting growth in theaters of especially with Bollywood films and different things like that, the theater industry is very interesting there. So theyre adding in more, hum, places where customers can go see a VR movie in a motion chair. Those are pretty widespread as well in China as well for the motion chairs, something quick.

So, maybe instead of a theater room where its a traditional theater setting with a digital projector, they have motion chairs in this room, and customers can come in and put on the headsets, so you can go with your friends into this room at the same time, with, maybe, as 50 other people and see a VR movie. So it’s definitely very different in different areas, which is really cool to see, its really coming into its own, its very unique, theres a lot of opportunity there across the whole world, which is really exciting.

LK: 

And with uniqueness, with a heterogeneity in markets instead of just a VR theater is one thing, thats why Iinterested to ask you about, we had a big announcement here, Im sure youve heard about it, that Cineplex, in partnership with the Seattle company VR Studios, theyre going to be doing several [Alexis: Yes...] dozen VR installation arcades over the next couple of years. So what do you see is the significance of that?

AM: 

Yeah, actually thats a great question. So, VR Studios actually was a major partner in the deal with Dave & Buster’s.So they were building the basically the whole hardware of the experience, building it together. I would say something thats very significant about that is right now at movie theaters for VR especially in North America, its something where its a, a bit more a dollar per minute and theyre longer experiences. 

So, if youre a family of four say, and you go and you watch a movie, maybe youre spending 40 to 50 dollars depending on when you go and the type of movie youre seeing. And then when you get out or come before, theyre trying to sell youyou know30 more dollars per person to, to play a VR game. So thats something that adds up very quickly, especially when you think about it that way. That, you know, you could spend upwards of, hum, around 200 dollars just for the whole family to go play VR.

LK: 

You havent even talked about popcorn yet either.

AM: 

Yeah exactly... So the VR Studios is a bit more of a their solutions are a bit more of a bite-sized way to do VR, so get a very quality experience at a shorter amount of time to where its an incremental pay. Hum, so for example, the Dave &Buster’s experience is 5 dollars for 5 minutes. Of course, its not saying 5 dollars for 5 minutes, it just says 5 dollars to go to Jurassic World andyou knowbe transported there through this VR experience”. But, you know, that brings the cost down tremendously for a family to where theyre still doing a quality VR experience, theyre getting that opportunity without having a huge hurt on their wallet so thatyou know20 more dollars for the whole family instead of, you know, it could be 120 if everyone does the 30-dollar experience. 

So, its definitely something thats more manageable, and, very profitable for a theater since thats something that doesnt take up as much room as setting up a whole VR experience, you can get people through pretty quickly, hum, and its fun to see, its fun to watch people do it. So its something that almost feeds into itself.

LK: 

And, from the content producers or the technology producers point of view, and Im sure this is something that came up at the conference you were at, because you, they were dealing with the enterprise level, how different are the skills required for this area than for digital media in general? And I ask this because I was on a block chain panel recently, and there was a panelist from a blockchain company and he said, “You know, when we advertise for developers, we dont advertise for block chain developers cause its too new, we advertise for really good software developers, and then we train them.” So is it similar[Alexis: Yeah...] for VR and AR?

AM:

You know, its interesting. VR and AR very much borrows from a lot of different expertise. So, if you look at some of the best studios right now that are doing VR and AR, they actually have a lot of people from a lot of different backgrounds. So if youre doing something thats more free realm, more of a location-based experience, you may need theater, people with theater backgrounds to be able to think about setting up the set, then building props and thinking about how people would go about the space. 

You definitely need gaming background for those game engines, doing that quickly, but you would also need the cinematography background as well to know how to best bring up a shot, especially for those VR movies, but its definitely this different area where you need a lot of different skill sets. So when we look to the future, well definitely need developers that are kind of more of a mix between the cinema Hollywood background and the gaming background, and even visual effects as well. 

So, you know, when you think about all the big visual effects hubs in the world, from Vancouver to Atlanta to LA, you’ll definitely see... or even London as well, youll see a really great meld and need for that in VR since a lot of it is really a visual effects type of experience. So theres a lot of need for a lot of different people. Theres going to be a lot of opportunity with it, within it, but yeah its definitely coming together. Youll see a lot of different people for a specific company, from technology to cinema to gaming to theater, hum, even art background as well, humso you have a very diverse group working on one project.

LK: 

Its interesting, itlike, it’s from STEM to STEAM right, what is it science tech engineering and math but then youve got to add the A in there for art. Very important.

AM: 

Yeah, exactly, very important.

LK: 

Alexis Macklin of Greenlight Insights, thank you very much.

AM: 

Yeah, thank you so much for having me, it was a pleasure talking to you today.

Note: This material originally appeared at Trends

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