Today’s guest, location-based VR expert Bob Cooney, has been in the XR space since the early 1990s. He drops by the show to give Alan an update on all the newest tech advances he saw at the International Association of Amusement Parks and Attractions Expo, and explains how today is the most exciting time to be working in this industry.

Alan: Welcome to the XR for Business podcast with your host, Alan Smithson. Today’s guest is always on the bleeding edge of technology. He’s able to predict both tech and business trends. Bob Cooney is widely considered one of the world’s foremost experts on location based virtual reality, and the author of the book “Real Money from Virtual Reality.” I’m really super excited to introduce my good friend and colleague, Bob Cooney to the show. Welcome, Bob.

Bob: Oh, dude, I’m so happy to be here. Thanks for having me, Alan.

Alan: It’s my absolute pleasure. It’s been a long time coming, this interview. But we’re here. We’re excited. And we just are coming off the heels of *the* major North American show, IAAPA — which for those of you listening and you haven’t been there — it’s basically Disney World for VR, AR, and out-of-home experiences. You were there. Let’s talk about what you saw, and what are the trends coming in out-of-home entertainment.

Bob: Yeah, it’s an amazing show. I’ve been going this– I think this is my 27th IAAPA or something like that. And my first one was 1991. And over the last four or five years we’ve seen VR every year just grow in not only the number of companies bringing VR/AR solutions into the market — mostly VR at this point — but the quality is every year measurably increasing. And that’s the thing I think that has me so excited is three or four years ago there was just a literally handful of things that you would even remotely consider as an operator. And last year there was confusion now, because there was– you were starting to see a lot of good stuff and this year it was just overwhelming. And so, yeah, we’ve seen real quality come into the market.

Alan: You’ve seen pretty much everything there is out there. What’s one thing that blew your mind this year?

Bob: Good question. The rise of unattended virtual reality systems. There was a company called LAI Games, which has been around for decades. They’re based out of Asia. They build arcade games. And a couple of years ago, they took a license from Ubisoft: Raving Rabbids, which is a really popular IP. They merged it with a D-Box motion base and they created a VR ride for family entertainment centers, arcades, and theme parks. It’s a two player ride. It was fairly cost effective, but they recommended it be operated without an attendant, and it was the first VR attraction that came out where you didn’t need to staff it. And the profitability of that really made a big difference for operators. And now this year there was another company called VRsenal, that had an arcade game cabinet with– that was a VR based that was unattended, and it was running Beat Saber, which is obviously one of the most popular games out there. And so we’re starting to see companies realize that maybe we don’t need attendants. Maybe people are smarter than we give them credit for. Maybe they can figure out how to put a headset on their face. Maybe they will clean it by themselves if they care about that. And so I talk about a lot about the four-minute mile, once it was broken. People thought was impossible, people thought if you try to run a four-minute mile, you would die. And once it was proven that it could be done, hundreds of people have done it since. And I think this notion of unattended VR is similar to that. And we’re going to start seeing more companies give more credit to consumers, that they’re smarter than we think they are.

Alan: When I was in China, they have VR kiosks in a lot of the malls and some are attended, some are unattended. But I– I remember I was walking through the mall and I was like, “Oh man, VR!” and pull out my phone to videotape it — because this was two years ago — and I watched somebody fall completely on their butt, because they were downhill skiing in an unintended thing and they fell on their butt, and then they got back up and did the thing. And then I was in another mall, videotaping a kid in VR and he fell on his butt. So there are still some risks with this. How are they mitigating that? Because I know the Rabbids one is using a D-Box and you sit in it. So is that kind of what you’re seeing? Because I know with Beat Saber, for example, you’re not– there’s no real risk of falling over.

Bob: There’s risk of somebody walking into your space and whacking them–

Alan: Oh, yeah.

Bob: –over, right? And so what the arcades are doing is they’ll put rope stanchions around those. I think the seated motion simulators are pretty safe. One of the Facebook groups yesterday, somebody posted how their son was in the hospital with a chipped tooth and a broken ankle from playing VR and falling. I don’t know what game they were playing, but they fell and hit their head on the table. And so there are some real risks around VR, that could limit adoption. And that’s– certainly on the consumer side, I think that’s a problem.

Alan: So, Bob, how are these companies mitigating this risk, or what are you’re seeing that’s mitigating this?

Alan: I think operators and setup and safety is important. A lot of them are putting the unattended stuff in view of like a redemption center, where there’s always somebody behind the counter redeeming tickets for prizes. I think the Beat Saber arcade game, they’re putting rope stanchions around them or cordoning it off, so people don’t walk into the space where somebody is actually playing the game. I think the seated stuff is inherently safe. There’s always a chance to get toes can get crushed, and things like that if people are careless. But I think that’s something operators have been dealing with since the very first driving games that had motion’s systems built into them. And I do think it’s one of the things that could really slow consumer adoption, though. If you remember the Wii when it first came out, people were smashing televisions with controllers playing tennis.

Alan: It’s interesting you say that, because we’ve been doing demos with the Quest, and the same thing. You set it up, you set up stanchions. And it doesn’t matter. People still– they get excited. They get in there. They don’t realize they totally lose control. That’s the power of VR, they get right in there. And we’ve had somebody get punched in the face with a controller recently. And it was like, “Oh, jeez.” They weren’t within the stanchions. They were outside of it. And they just– the person lunged out of nowhere.

Bob: It’s the paradox of presence, right? I mean, you’re–

Alan: Yeah.

Bob: –you’re really present in the experience. You forget where you are. The fantasy-reality line blurs. And then next thing you know. And that’s the inherent problem with it, is that that’s– in order for it to be effective, it’s not going to go away. And so I think safety systems– and you know, one of the things I would expect is as inside-out tracking gets better and the cameras get better, if you get too close to an object maybe the pass-through video kicks on. They’re going to have to figure out a way to make this stuff safer overall.

Alan: Yeah, the way the Quest did it, where you can draw out your boundaries and then if you walk through the boundaries, it goes from being in virtual reality to being in the real world or pass-through camera. That actually a really nice solution. What we’ve been doing now is putting people in VR when they’re outside of the boundary, and then having them walk into it. And it’s this kind of a-ha moment, where they go from the real world of crappy pass-through camera to the completely virtual world. And it’s that moment of delight that you see. Now, speaking of moments of delight, because you get to see not only try these experiences, but you’re really intuitive into the emotions that people are feeling when they’re on the rides. What are some of the rides or experiences that you’re seeing that really resonate with people?

Bob: Yeah, look, I think that– it’s funny. There’s a narrative in the industry that we have too many zombie shooters, but the numbers show that that’s actually what people want to play. And people love horror, horror’s had another blockbuster year in Hollywood, and I think people like to be scared. And that’s one of the easy emotions that you can trigger is fear. And so whether it’s Richie’s Plank in fear of heights, or zombie outbreak shooters and stuff like that, I think people love to be scared. And the interesting thing is, statistically, women like horror more than men. There’s all these great viral videos out there about women screaming in these zombie shooters. But I think that’s the thing that really triggers emotion, is that fear is the easy one. It’s the low lying fruit. And I know companies that have put out multiple titles, but their horror titles are always their number one earning and number one ticket seller. And so I think you’re gonna continue to see that, until we figure out how to really tell stories and drive other types of emotion in VR. And I still haven’t seen a lot of that yet.

Alan: What about racing games? I tried one the other day and it was absolutely mind-blowing. It was a 6DOF simulation machine. So the whole thing was riding on multiple pivot angles. And when I hit a bump on the road, I felt the bump on the road. It was just– and when I hit the wall — of course, going too fast — I hit the wall and the whole thing just rattled me. It was wild.

Bob: Yeah, look, I think that there’s a lot of bad motion simulation out there in VR, which triggers motion sickness. If it’s not done well, it can actually exacerbate the simulator sickness that you get. There are a couple of companies that seem to be doing good. Like I did Mario Kart VR from Namco, which is a really fun game. And I think that that makes sense to have in VR too, because you have to look over your shoulder to see where your competition is, to see who’s going to throw things at you or you can throw things. One of the surprise hits from the IAAPA show — to go back to that — was a company called UNIS out of Taiwan, I think they’re based, they had a two player motorcycle VR simulator and it was a track racing motorcycle game. And when you’re leaning into the turn or looking over your shoulder, that presence of VR and to be able to look behind you and see your competition coming up to you was really well executed. And so I think– and I got no motion sickness at all out of it. So it was really well done. So I think companies are getting better at it, and they’re using it in appropriate ways. I think that my personal opinions in a drive racing simulator in a car, you have mirrors, like you don’t look over your shoulder. And so I don’t know what advantage VR really brings. The resolution isn’t as good. The frame rate is not as good as you can get in a big monitor. I almost feel like for driving simulators, you’re better off with a really good 4K monitor at 200 frames per second with good mirrors.

Alan: The one that blew my mind was three panels kind of stuck together.

Bob: Exactly. I think that’s a much better use of the technology. Totally agree.

Alan: It was wonderful. I did drive– because I was at the I/ITSEC show, the Industry– Inter–

Bob: Big military simulation show.

Alan: Big military simulation training. So I got to drive a tank, that was cool. I got to fly a helicopter, which was interesting. I crashed it, dramatically. The guy’s like, “I don’t think I’ve ever seen anybody crash this thing like this.” [chuckles] But here are multi, multi-million dollar simulators, and they’re not as good as the ones that are at IAAPA.

Bob: Yeah, that’s interesting. And I think that– how much of that is just because the military is used to overpaying for everything — we’ve all heard about the $9,000 hammer and the $40,000 toilet — and how much of that is just the nature of the accuracy. Like one of the things I did some work with zero latency and they did some work with the Australian Army in building simulations. And one of the things that everything has to be about muscle memory when you’re in the military. And so these simulations have to be incredibly accurate down to button placement and things like that. And because it’s generally lower volume, I wonder if that has a lot to do with it.

Alan: It could be, actually. It could be the rigorous demands from the client, but also the fact that they’re not buying hundreds of them, they’re buying tens of them.

Bob: Yeah, totally.

Alan: Makes sense. And then, of course, everything’s custom for them and you can’t share the content out. So there’s that.

Bob: Yeah. And look, I think the military has been doing this stuff for a long time. And we saw a couple of military simulation companies kind of stick their toe in the amusement water. And that happened a lot with companies like Doron Simulation, they did military simulators and wound up going to doing some big, large format, large capacity motion simulation in the amusement industry. And I think there’s been some cross-pollinization between the military, some companies and the amusement and entertainment sector companies. I think on a smaller scale stuff, that’s more in the game space. That’s just I just don’t think they get that mark. There was a company called Raydon — who was probably at I/ITSEC — who was a client of mine a couple of years ago. They brought a 50 cow simulator, and they put it in kind of an arcade cabinet and created a game that was kind of like space bugs — think Starship Troopers — with this giant 50 cow simulator, and a butt-kicker on it to create recoil. And it was called Total Recoil. It was a great experience. But entering into the arcade game business, they really [went] from being a military contractor, just chalk and cheese. And I think they struggled to try to make something that was inherently fun and replayable. I think that’s one of the big challenges in the entertainment industry, is people are looking for games they want to play over and over again. And training simulation, you’re doing it for a different reason. It doesn’t have to really be replayable from a fun standpoint. And I think that there are real skills in creating games regarding core loops and dopamine rushes and things like that, that get you don’t want to play it again, that the military companies just don’t need to understand.

Alan: So let me ask you a question, Bob, because this really intrigues me. You talk about these things that make something replaceable, and how maybe military sim or even training is not looking for that. But shouldn’t we — as people creating training simulations — be thinking about that? Because if we make it so that people want to do it over and over again, and have that repeatability, and that want to play it again, wouldn’t that kind of increase their ability to become proficient in whatever it is they’re training?

Bob: Yeah, absolutely. But I think it’s a different mindset. So when you’re training to become better at something, that’s a mindset. And when that’s my profession, I’m driven to do that. When I go to have fun, I’m not necessarily in the mindset to improve. Now, there’s a narrow slice of the psychographic market, that will say “I just want to get better and better, and I want to prove, I want to play against myself, I want to beat my high score.” That’s where the leaderboards and stuff comes in. But it’s not actually the broad market for VR. We find the broadest market for VR is casual impulsive entertainment. People just looking to go out and have a good time with their friends, and to have a story to tell. And so I think you have to really know your market. If you’re building entertainment products, know who your target consumer is and build for them. And there’s a lot of people now building these kind of PVP — player versus player — e-sports games, that are highly competitive and they’re not earning very well so far. I mean, there’s a couple of them that are. I know Virtuix, the Omni arena’s doing really well in its early test locations. They got about–

Alan: Yeah, how’s that going? I actually tried the Cyberith one at the I/ITSEC show. And it was interesting– and for people listening, if you don’t know, it’s a kind of redirected walking. What would you call it? Omni-directional treadmill kind of thing. So the one I tried, you’re strapped in at your waist, and you’ve got these slippery shoes on, and you just walk in any direction you want to go. But what I found was I felt totally hammered drunk, walking around in that thing.

Bob: [laughs]

Alan: Like, I had no control. I kept falling over and like, because you’re strapped in anyway, doesn’t matter, you can’t really fall. But I just felt like I couldn’t walk in a straight line. I was like, if somebody gave you 20 shots of tequila and then said “Walk down the street,” that’s what I felt like. I was all wobbly kneed and it was not the most fun experience, but I guess with practice it might feel better.

Bob: And I think some of that is in the interface in between the hardware and the software and the control mechanism. I think if you try to use that as just a human input device, it’s going to be difficult. And I think there are some companies do that. I think Virtuix invented the device, they’ve been doing it for six or seven years. I think they’ve kind of perfected that. And even with that, it can be a little awkward. But once you get into it, it’s the closest thing you can do to running in VR. And there’s just something visceral about dual wielding shotguns in a zombie apocalypse and running around. And the head is just– there’s something magic about that, Alan, I can tell you.

Alan: It’s interesting. I got to try another walking simulator — and I’ll look it up while we’re talking — but it was walking on a treadmill. It was bi-directional treadmill. So wasn’t omni-directional, it was just bi-directional. But the way they had coded the experience, as long as you stayed within a green circle, you could just keep walking. And my first thought– because the first thought is I’m going to walk into something, because I’m in this big kind of thing. And then when you take a few steps, after about the tenth step, you’re like, “Wait a second. This is really cool. I’m walking and yet I’m not any closer to the wall.”

Bob: Yeah. And one of the things we saw in the large scale free roam — like the big warehouse scale free roam experiences — is the longer– the further you walk, the deeper the immersion goes.

Alan: Yeah.

Bob: Because eventually that’s what happens, your mind says, “OK. Actually, I am walking. I’m in a bigger environment. I’m not going to walk into something.” It lets go of that reality. And you enter that fantasy world where you realize you’re in this environment. And if you can do that for a few minutes– some of these experiences, I’ve traveled as much as a half a kilometer. And the immersion gets really, really deep when you’re in it for a half an hour and you’re just walking around freely.

Alan: That’s crazy. So, you know, in a business where square footage matters, one of the things that the Void did really well is they employed redirected walking or the ability to kind of use the same set for multiple pieces of content in a very small footprint. What are you seeing around that sort of location based entertainment where they take over the whole space?

Bob: Yeah. And I think all of the companies that started out with these big warehouse scale stuff are looking at realizing the economics. A, there’s an economic piece of it and B, there’s just finding locations with 2,000 square feet of open space without pillars in an urban environment can be really hard. I know a guy that was looking in London for a year trying to find a location for Zero Latency location, and he couldn’t. So I think there’s a couple of drivers there. One is just the cost and one is availability of space. And so they’re all trying to figure out how to go smaller and smaller and smaller. But those are tradeoffs, right? I mean, the very first free roam space I played was 4,000 square feet or 400 square meters. It was a 15-minute game and it was amazing. But how many places can you operate? Something like that. And I think there’s one in Chicago, mass VR that’s on that scale, too. But I don’t think they’ve ever opened a second location. So, yeah, I think that there’s a lot of tradeoffs. And look, from an operating model standpoint, everybody’s still trying to figure out where the sweet spot is. You know, The Void is still struggling to try to figure out these single unit economics. I think Dreamscape is still trying to figure it out. Even Zero Latency, I think they just opened like their 37th location in Barcelona now or something last week. But I know I’ve spoken to all of their operators, and some of them make money and some don’t. None of them are really getting their money back as fast as they wanted to. And so I think that the business models are still being fleshed out, and finding that– once people figure out the sweet spot, everybody will rush into it. And the fact that people are still experimenting tells me nobody’s really figured it out yet.

Alan: It’s interesting you say that, because I think that’s indicative of the whole industry. VR, AR, from a corporate standpoint, we’re really just touching the surface of what’s possible and the business models around this. You know, it’s funny. We’re writing financial models for a company and they’re like, “Okay, here’s the products, here’s the clients we want to go after.” And I said, “Guys, you realize that everything we’re doing here is just a complete guess, and it’s all going to be wrong.” Like, literally no rhyme or reason for it, because as we move, the industry is shifting. And I say to this to people, “It’s not just a new technology, it’s a new industry, it’s new business models. Everything’s unproven.” So how do you then– I guess you just got to keep experimenting, which was what everybody’s doing.

Bob: I tell people, this is the most complex market you can imagine. And the solution for solving complex problems is sitting in the problem space longer. Einstein said, “I’m not smarter than everybody else. I just sit with my problems longer.” And I think he was lying about that, he was smarter than everybody else. But he did sit with the problems. And there’s a really interesting thing for the listeners, if you Google the “Snowden leadership framework”, it’s a Harvard Business Review article, it was back in the 90s. And they talk about this thing called the Cynefin model — and it’s a Gaelic word — and they talk about how to deal with different levels of complexity. And they say, in a complex market you have to stop trying to find the solution right away. And I think VR is that, and you’re seeing a lot of companies experiment and share the opening. And the thing I love about this industry is everybody seems willing to share with most people. Because they know it’s day one, they know we haven’t tapped the beginning of the market, and it’s not a zero sum sum game. Everybody can still win at this stage of the business. So there’s a lot of sharing and a lot of experimentation happening. And I love that.

Alan: Yeah. It’s really a wonderful industry to be in. I came from the music industry and music technology, and it was — I guess — a more mature industry. So there was sharing, but not really kind of at the level where it’s like, here’s all my information or I’m on a podcast telling everybody about how VR and AR is working for our business. And even just on this podcast — the XR for Business podcast — we’ve seen a really incredible sharing of knowledge. And I think this is one of the best things about this industry, is people are willing to help. And like you mentioned, it’s not a net sum game at all. The industry — as an entire industry — is about $10-billion in 2019, will close off the year between 10 and 11 billion. And that’s going to increase to 500-billion by 2030.

Bob: There’s plenty of room for everybody. If new entrants stopped coming into the market, everybody in the business today that survive would be a billionaire. So that’s not going to happen, because people are continuing to rush into the market. But yeah, there’s plenty of room for everybody right now. And it’s really exciting to have been watching the industry grow, like I did my first VR product in 1992. I’ve been watching this thing bubble up for 25 years and and it’s nice to have some–

Alan: Is now the time or what?

Bob: Oh, absolutely. Zero doubt in that. I think the technology just wasn’t there before. And the mobile phone revolution with really inexpensive accessible small high resolution LED screens or LCD screens, and IMUs, and tiny processors, and all of the components that Palmer Luckey needed to build his first Oculus headset came out of the cell phone industry. And so we can thank the cell phone guys for making all this possible.

Alan: Well, speaking of cell phone guys, you’ve got HTC as a major player. They actually sold their cell phone division to Google to focus on VR.

Bob: Man, that was crazy. Like–

Alan: I agree.

Bob: Talk about a bold move. And I hope they’re successful, because I love to see bold business moves rewarded. But that was a pretty risky move, but talk about belief. That’s the manifestation of belief.

Alan: Yeah, it’s focused, too. If they’re all in on spatial computing in the future of this, and they seem to be doing well. Out-of-home entertainment locations, I would say HTC is probably the leader.

Bob: Oh, by far. Like, not even– nobody’s even a close number two right now. And some of that has been attitude. I mean, Rickard Streiber early on realized that they had an awareness problem. He said, “All right, let’s support the arcade business, because that’s where people can at least get an idea of what VR is like.” And I criticized him publicly a little bit, because the arcade owners back in the 80s, that whole business got basically disintermediated by the consumer gaming market. So once console systems got really good and really affordable, people stopped going to arcades. And so in a way, he was trying to get arcade people to build VR arcades, so people would be able to buy VR at home, and it would put the arcades out of business. And now that we’re starting to see more free roam and less consumer adoption than anybody expected, I think that those models are starting to solidify a little bit. But HTC saw early on that they had an awareness problem and they are trying to fix the awareness problem, whereas Oculus thinks they have a pricing problem. And so, you know, they come out with a Quest and they come out with the Rift S, and they give really hard technical limitations to both of them to hit a $399 price point, thinking that’s going to move the market. And so two different companies with two entirely different beliefs of what the problem is. It’ll be interesting to see how that plays out this Christmas.

Alan: Have you tried the Quest?

Bob: I have, yeah. In fact, I just ordered one. I tried it early on, before it was released. Obviously, I get to demo a lot of cool shit that’s in development. One of the nice things about my job. But I finally broke down and ordered one, and I’m going to see if I can’t travel with it, because I get so many people that I meet that haven’t tried VR, and I want to be able to just put a headset on them and say, “Check this shit out.” Am I allowed to say that on your podcast?

Alan: You’re allowed to say whatever you want, my friend. Now, this is a family show, but I believe that if you’re passionate about something, these things come.

Bob: Yeah, so. And funny, what got me over the line — because I’m a consumer — was they bundled Vader Immortal with it for Christmas. And so they’re starting to learn about the whole notion of bundling, and what’s going to drive adoption. And then they just then– obviously they announced they acquired Beat Games last week.

Alan: Yeah, that was cool.

Bob: I wrote a blog post about that. And by the way, if anybody’s interested, I write a weekly blog on location based VR at bobcooney.com called Dropping In. So if you’re interested, check that out. But my blog post last week was about the Facebook acquisition of Beat Games and how– try to figure out why they did it. If you think back to the music games of Guitar Hero and Rock Band, those peripheral kits were really expensive. Couple of hundred bucks for the whole band set. 300 bucks, 350 for the Beatles one. And so I think music games have the ability to sell hardware. And I think Facebook realizes that. And they decided to buy Beat Games. They’re going to push that hard. And then you’re going to see a lot of new music coming in. It’s really exciting time. How happy am I for those guys, the guys that started Beat Games and cashing out, hopefully they made a bajillion dollars.

Alan: [chuckles] We’ll never know how much they’re going to make. I think it was–

Bob: But hopefully those guys cleaned up. I love seeing entrepreneurs make money.

Alan: Hopefully they also keep Beat Saber available on other platforms.

Bob: Yeah, absolutely. And they have to. Well, they don’t have to, actually. And I think that there would be a massive community backlash if they didn’t, at this point. And you know, Oculus and Facebook, they’re undergoing all kinds of scrutiny from all kinds of people. And they’re going to have– they’ve got to be careful with everything that they do right now, and how it affects their brand and people’s perception of them.

Alan: Agreed. So let’s go back to IAAPA for a second. If you were to say that these are the five highlights of IAAPA this year, what would they be?

Bob: Yeah, for me, I actually gave out– I have created my own award called the VR Bauble Award. And for recognition of companies that are really doing not only good stuff, but innovative stuff in the space. And Rabbids: The Big Ride was one of them. The VRsenal unattended Beat Saber cabinet was one of them. And there was one that really caught me by surprise, was a company called Ballast– DIVR, they had a product called Ballast, and I had to actually throw on board shorts and get in a pool to try it. And they have a waterproof headset basically built into a scuba mask with a snorkel. And you hold on to one of those underwater propulsion devices — like a little torpedo thing that you hold on to — and it’s hooked up to an air compressor, so it cavitates and there’s a fan that blows jet– a jet that blows the water on you. So you feel like you’re moving underwater. And it was mind blowing, it was fantastic. I was like screaming through my snorkel. And I think that from a business model standpoint, you’ve got all of these resorts around the world that have pools that are underutilized and unmonetized. And now all of a sudden, you can drop 100 grand worth of equipment in there, and charge 20 bucks for a seven minute underwater VR experience and start monetizing pools. And I think you’re gonna see resorts do that. And so that product blew me away. It was really surprising.

Alan: That is super cool. Think about this, for all the people going on vacation over the holidays, how much can you really drink by the pool?

Bob: Yeah.

Alan: Don’t answer that question.

Bob: And the ability– one of the experiences was like free floating in space. So when you get in a weightless pool environment, there’s all kinds of things you can do. So I was jetting through the lost city of Atlantis, but then all of a sudden I was free floating in space in the International Space Station. And that was really cool. And being in the water removes any notion of motion sickness as well. So super accessible. So that was– yeah, that was a great– that was just a mind-blowing experience for me. It really changes the game when you can start doing VR in water, that was amazing.

Alan: Super cool.

Bob: Yeah.

Alan: What else?

Bob: Yeah, there was– the VR bumper car was another one that–

Alan: What?

Bob: Yeah, I know! So you take a 50 year old hard ride, you put a tracking system on it. You put on a headset. And now all of a sudden they’ve gamified bumper cars, and you’re in this cyberpunk environment. It was a joint venture between a bumper car manufacturer called IE Park, a software company called SPREE Interactive — which was formerly Holodeck VR — and a company called VR Coaster, which did the first VR roller coasters. And the VR roller coaster thing was a bit of a fad and it’s kind of dropped down now, because there’s all kinds of throughput issues and roller coasters are high throughput rides. But bumper cars are not, and bumper cars are kind of boring and simple, and you’d never do it more than once, right? And so they’ve taken bumper cars, they’ve made them fun and engaging and replayable, and you’re going up a ramp and the floor collapses and you feel like you’re free-falling. And yeah, really amazing use of VR. And so that was– and that won a Brass Ring award, which is one of the award ceremonies from IAAPA this year. So I expect to see that in a lot of theme parks going forward.

Alan: That’s super cool. I want to try that.

Bob: Yeah, it was good.

Alan: And rounding out the top five?

Bob: Yeah, umm… Oh wow, top five, so… boy, that’s a tough one.

Alan: What other Bauble Awards were given?

Bob: Yeah, well I gave one to Zero Latency, but that was like long overdue for their free room stuff. And I will give, I still think it’s the best of the best in the free roam space, but one of the things that they did — which is speaking of brave moves — was they had developed– because they were first, they developed their own tracking system, right? They had to develop their own headset, their own gun, their own camera system that used machine vision cameras, a stack of servers a mile high. It was a very expensive installation. And when the Windows Mixed Reality system came out — or before it came out from Microsoft — they were the earliest adopter of that. And what they did was they made their own stuff obsolete before their competition did. And it dropped the price of their system in half, made it more accessible, made it more flexible. And I think it’s really hard for companies that invent solutions to let go of their own invention and adopt someone else’s solution because it actually is better, cheaper, faster. And they did that really early. And I rarely see entrepreneurs do that. There’s that whole not-invented-here syndrome. And they’re so married to the technology. And these guys — as technically proficient as they were — just let go of that. And I think that was a really bold, brave move by the founders of the company. And I think it’s paying off in spades for them.

Alan: This is kind of the approach we’ve taken at MetaVRse in building a new platform marketplace. And we realize that, yes, we can make all sorts of great tech. We’ve built all sorts of things; motion tracking, volumetric capture. We’ve built all these things. But the technology’s moving so fast and so rapidly that Microsoft, for example, they have their Metastage is a million bucks plus. But there’s other people coming up that can do that for $100,000.

Bob: Yeah, there was a company at SIGGRAPH called IMVERSE. And they are doing it with the new Azure Kinect cameras.

Alan: Exactly, exactly. And that’s not difficult to do. So if you look at the technology in the way it’s moving, my question is constantly, how do we disrupt an industry constantly and consistently disrupting itself?

Bob: Yeah.

Alan: Our answer to that is to build a marketplace that taps into all the newest technology for the needs of our customers we’re corporate training and enterprise training, that sort of thing. But being able to use all of the latest, greatest technologies and apply it to that, because they will change dramatically over the next five years, ten years.

Bob: Yeah, absolutely. And I think — to get back to location based entertainment space — the innovation that has to happen there is around the business models. Because ultimately you’re selling tickets, and you’ve got to sell enough tickets to pay for the hardware, before the hardware becomes obsolete and you have to buy new hardware. And so I think that’s been the challenge in that space is how do you buy something and know that you’re gonna get a sufficient return on that invested capital, before you have to either replace it or upgrade it. And I think that we’re still sorting that out.

Alan: Well, I think the problem is the headset turnaround times. So I think your maximum you’re going to get out of any headset at this point is two years.

Bob: Yeah, but the headset’s the least component of it. Like, the headset’s 500 bucks now, and the prices are going to continue to come down. And so, for example, the VRsenal cabinets sold for $40,000. If you have to upgrade the headset every six months and it cost you 500 bucks, that’s almost an insignificant amount of money. I think it’s– and that’s what I tell operators, too, don’t get too caught up in the display technology getting better and better, and faster and faster. I think that when you look at the whole stack of what you have to do technology wise, especially in the free roam space, like if you’d invested a half a million dollars or three quarters of a million dollars into a Zero Latency system with machine vision cameras, and now all of sudden you can do it with inside-out tracking in the headset, you’ve literally thrown away $200,000 with the hardware in twelve months. That’s hard to recoup. And so with that, it’s the bigger systems, they have a little more technical heft to it, a lot more infrastructure and especially on tracking systems, which are essentially now going to be free, which is awesome.

Alan: It is pretty awesome. And you know–

Bob: If you didn’t buy one yesterday.

Alan: [laughs] Yeah, it’s true. And the inside-out tracking was kind of this unicorn myth that maybe will come, and it came, and it came fast and it’s here. And it’s just– that’s the new standard.

Bob: And it comes with some limitations. But I’ve got to believe that those limitations are going to go away, as like the peripheral vision, and if you move your hands out from in front of your face, because they’re using the cameras now for hand tracking as well. And so how do you track an object that isn’t in your direct line of sight, whether it’s for hand tracking or controller tracking or whatever. But I’m sure they’re going to figure that out in the next 12 months.

Alan: I think honestly– and I had Alvin [Wang Graylin] from HTC on, and they’ve kind of figured this out a little bit with their Focus, they use inside-out tracking, plus they use the base stations.

Bob: Yeah.

Alan: So you kind of have this triangulated– I think he said with four base stations and the inside-out tracking, you can go up to something like 20,000 square feet. I didn’t understand how that was possible.

Bob: Yeah. And I think hybrid tracking really is the future for the large free roam VR stuff. And a combination of inside-out and outside-in is going to be where we are, and that’s gonna be where we settle. But you won’t need $200,000 with optical tracking cameras. You’ll be able to do it with a handful of infrared laser cameras or whatever. But the prices of that stuff is going to come down to the point where you can mix and match the technologies into a solution that eliminate all the weak spots. And I think that’s the next twelve months, that’s going to be where all the evolution is in the technology of the out-of-home free roam space, is those hybrid tracking systems.

Alan: Amazing. So we’ve gone through a lot today, but what problem in the world do you want to see solved using XR technologies?

Bob: That’s a great question. Thank you. And this has nothing to do with location based VR or entertainment. I want to see it being used for greater interpersonal connection, and to create safe spaces for people to be more vulnerable in their communications. And I think that that’s one of the greatest challenges that we have in society today, is kind of a loneliness problem, this leading to an epidemic of suicide and depression. And I think that it’s a really powerful tool. And as we get better virtual telepresence and more avatars that are more communicative. I don’t think they have to be photorealistic, but I think using– I want to see people using the technology to bring people closer together. Think about the combination of language translation and virtual telepresence, and how that breaks down the boundaries, the geopolitical boundaries that keep us separated as humans around the world. That’s what I want to see.

Alan: That’s an amazing vision. And I think we’re only a few years away from that being ubiquitous.

Bob: I think within five years we’ll be able to have face-to-face meaningful communication across borders and across languages. And that’s going to put a lot of pressure on governments, and the people who want to keep us separated for all kinds of reasons. And so it’ll be interesting to see how that ripples through the geopolitical society of the world in the next five years. It’s going to be– it’s a fascinating time to be alive.

Alan: It really is. Thank you so much, Bob. This has been amazing.

Bob: My pleasure. Thanks for having me.

Looking for more insights on XR and the future of business? Subscribe to our podcast on iTunes, Google Play, or Spotify. You can also follow us on Twitter @XRforBusiness and connect with Alan on LinkedIn.

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