Virtual Reality's Third Wave

This article originally appeared in Replay Magazine.

Virtual Reality is hot.  Lava hot.  Kate Upton hot. Ryan Reynolds hot.  But for those of you that don’t remember, we’ve been here before.

In 1991, as I was getting ready to debut Laser Storm at the IAAPA show in Orlando, I received a call from my biggest customer (OK, they were my only customer at that point).  Andy Halliday was the president of Edison Brothers Mall Entertainment, and they had a new product they wanted to debut at the show, but there was no exhibit space left.  So they asked if I would be willing to share some space. 

Edison Brothers had just formed a new company called Horizon Entertainment and acquired the exclusive North American rights to the world’s first Virtual Reality entertainment system.  Virtuality was invented by Jonathon Waldern, a pioneer who had been working in VR since the early 1980s.  Virtuality was his biggest product at the time, and promised to offer an experience unlike anything anyone had ever seen. 

The media hype around the launch at IAAPA was unlike anything I had seen.  We had over 100 media outlets from every country with a television come through the booth taking photos, video and asking for interviews.  The game, Dactyl Nightmare, put two players into a 3D platform and had them hunting each other while remaining ever vigilant for the circling pterodactyl that was looking to make them into a snack. 

Considering the state-of-the-art at the time, Virtuality was amazing.  Yes the motion lag was terrible; if you moved your head too fast you had to wait for the environment to catch up with you.  The headset was bulky, heavy and low resolution.  The equipment was obscenely expensive; US$50,000 per unit in 1990 dollars.  That’s almost $100K in today adjusted for inflation. 

Horizon and Edison Brothers rolled out Virtuality in their larger mall FEC’s as what could only be considered a loss leader to generate publicity.  Every TV station and newspaper covered the opening at Navy Pier when they launched in Chicago.   A few other large FEC’s purchased and installed Virtuality too, but the cost was prohibitive to most. 

Fast forward to 1997 and the backroom of a carpet warehouse in San Jose, California.  Milind Bharvirkir and Ken Bayer were working on the second generation of VR; a new Virtual Reality arcade game called the VR Vortek.  They were working to solve some of the inherent problems of the first systems.  To remove the need for an attendant, instead of a head-mounted display (HMD) they put the display on a counter-balanced boom.  This industry-first boom-mounted display also removed the age requirements, allowing kids as young as 7-years old to play with ease.  It also attracted females for the first time, as HMD’s tended to get tangled in longer hair. 

The VR Vortek put Global VR on the map, and was the first commercially successful virtual reality entertainment system. It sold thousands of units, earning as much as $1000 a week on location.  Global VR ultimately released several titles for the platform, but their BeachHead 2000 game was a runaway hit.

The next decade was pretty quiet on the VR front until August of 2012 when Palmer Luckey, a game hobbyist, posted a project on Kickstarter. He was hoping to get people to contribute enough money for him to build 100 prototypes of a new HMD. He gave one to John Carmack, co-founder of ID Software and creator of Doom, who decided to demo it at the E3 consumer video game convention, and next thing he knew he had raised almost $2.5 million from almost 10,000 backers.

Thus began the third wave of VR. Oculus Rift triggered the imagination of developers everywhere.  From video games to architectural design to medical technology, software developers were using their Oculus development kits to usher in a new era of affordable VR.  Then in 2014 Facebook decided to use some of their newly minted billions of dollars from their IPO to acquire Oculus VR. 

“This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures”. – Mark Zuckerberg – CEO and Founder of Facebook

This set off a veritable feeding frenzy in the tech and investment communities.  Soon Sony, HTC, Valve and even Google started creating their own head-mounted displays.  Samsung created a headset that turned a Galaxy smartphone into an HMD.  Investors started pouring millions of dollars into startups. 

One such startup in the small beachside community of Dania in south Florida, Magic Leap, has raised $1.4 billion dollars in venture capital for its mysterious augmented reality headset. Augmented Reality differs from VR in that instead of an entirely immersive virtual environment, AR projects solid images into the real environment.  Imagine walking down the street and seeing aliens coming out of the windows of an office building.  The building is real, but the aliens are projected by the AR headset. 

Very few people have experienced Magic Leap.  Some of the people who have seen it are the designers at Weta Workshop in Wellington, New Zealand.  Weta Workshop does all the special effects for Peter Jackson’s films like The Hobbit and Lord of the Rings, among other projects.  I had dinner with some of them recently, and while they couldn’t comment on the technology, they were convinced that it was going to change everything, from how we interact with media to how we communicate with each other. 

Microsoft is also jumping into the game with Hololens, another augmented reality headset.  Their demonstrations have been breathtaking, but some behind the scenes suggest they’ve been carefully curated and don’t really represent the final project, which is rumored to be underwhelming.   

All of which is a commentary on how fast expectations can spiral out of control.  The rate at which technology is advancing in VR and AR is breathtaking.  And three startups in the amusement space are shining examples of that. 

The Void, Zero Latency and VRCade are all working on new arena-based multiplayer virtual reality attractions. Imagine combining laser tag with virtual reality and you begin to see the possibilities.  Laser Tag operators spend a small fortune building and theming their arenas.  But with VR, game environments are 100% software.  Well, almost. 

The Void is taking a unique approach to their arena-based attractions by building virtual environments over physical elements.  This promises to create a truly immersive experience.  But it also comes with the expense and limitation of constructing hard environments.  When it comes time to change, instead of a new program, you need a sledgehammer and a construction crew.  The Void is building their own virtual entertainment centers, and has shown no indication they will be offering their systems to FEC and park operators. 

VRCade is currently testing a single-player system at a Dave and Buster’s location.  I was able to demo the system in a large 30’ x 30’ room they had setup.  I was given an HMD, stereo headphones and a pistol.  Everything had mo-cap balls on them, like the ones you see on the body suits that athletes and actors where when they are simulating the motion for an animated character.  The tracking was amazingly accurate and the experience was very immersive. 

I was dropped into a virtual courtyard, and my heart raced as I spun around looking for the zombies that were attacking from every direction. While it was exciting, the game didn’t really create any sense of environment.  I wasn’t able to hide behind walls, or explore a virtual world.  It felt like a novelty shooter; a really good arcade game. 

At an expected cost of $50,000 or more for a 1-2 player system that requires an attendant and 200 square feet, the ROI is questionable. VRCade plans to offer its technology as a development platform at some point, so I expect the experiences to evolve and mature over time and the price points to fall, but by then, will Magic Leap or some other technology make them obsolete. 

Down under in Melbourne, Australia is a startup called Zero Latency.  They exhibited at IAAPA last year with a 20x30 demo booth set up. They claim that up to 6-people can play simultaneously, but while they started with 2-player demos at IAAPA, by the time I got to try the system on day three they were only doing single player.  I’ve done enough live demos at trade shows not to read too much into that, as press reports of the 6-player system functioning in Melbourne are widespread. 

I donned a vest containing an Alienware Gaming Laptop, an Oculus Rift HMD and stereo headphones and grabbed a rifle.  Everything had Sony Playstation Eye tracking balls mounted on them, and they reportedly are using the same cameras as the PS3 system. This could explain the quirky tracking compared to the VRCade system, or it could have been the trade show environment, which is full of interference. 

The Zero Latency experience, was nothing short of amazing.  I was transported to an alien environment that was shockingly believable.  I started in a space station, and was able to hide behind virtual walls to protect myself from the aliens flying outside.  I was able to duck and shoot just like in laser tag. The game encouraged me to move from room to room, where in each new chamber the environment changed and the enemy evolved. 

At one point, I was made to walk out onto some unstable rocks bordering a precipice from which had I fallen would have resulted in a molten death.  I froze in my tracks.  I stood there for what seemed like 30 seconds.  I had to remind myself that I was standing on grey carpet on a trade show floor.  Even knowing that, I hesitated, and when I walked out onto the rocks my heart raced. It’s in those little moments that memories are made. 

I expect the cost of a fully loaded Zero Latency system to approach what a high end laser tag system was in the 1990’s. If the developers get the experience right, and provide sufficient throughput, these attractions could provide not only incredible entertainment value, but enduring profits as well. Multiple software-based experiences promise to extend the life of the hardware investment, though the risk of technological obsolescence is ever present in these early days of VR hardware.  Early adopters stand to benefit the most from the media attention, and will certainly be able to charge premium prices in the early days.  They also will almost certainly be faced with reliability issues as the manufacturers work out the bugs.  As my good friend Terry Farr always says, “That’s the price for the prize.” 

Bob Cooney has been involved VR since 1991.  He helped launch Virtuality for Horizon Entertainment and was an early executive at Global VR. He is excited about this third wave of VR, especially as it applies to the commercial amusement space.  If you’re interested in VR for your business or FEC, contact Bob at [email protected] via his website at www.bluelaserconsulting.com