Viva la VRevolution !!!

This interview with Leif Petersen, CEO HOLOGATE was conducted by Ian Donegan as research for an article in the Intergame Magazine February 2019

?1. The success of out-of-home virtual reality will depend on the direction that home gaming takes. How do you see home VR evolving in the next five years and how will out-of-home be set up to compete with it?

We disagree.  Out-of-home virtual reality is not dependent on the direction of home (VR) gaming.  Out-of-home virtual reality is entirely its own industry and it’s solving some of the biggest challenges facing the adoption in the home (VR) gaming market…affordability and accessibility for the average consumer.  Even though people could theoretically purchase virtual reality systems for home use, the combination of headset, controllers, and computer are not at a price point affordable for the masses.  Also, the premium quality and multi-player home VR experiences are not yet readily available.  The out-of-home VRmodel supports the same reasons that people still go to cinemas, escape rooms, or laser-tag arenas…it satisfies the public’s yearning to be out with their friends and be social and experience entertainment that is unique, special, and worth getting out of the house for.  

Mass consumer home VR adoption is still a considerable way off from when a lot of journalists, media, and early investors predicted it would happen. Many fell victim to the “peak of inflated expectations” as explained by the Gartner hype-cycle” phenomenon, anticipating that it was going to be fast and furious.  Until a company creates a platform that is affordable, comfortable, multiplayer, and has the user completely accept that they have been transported to another reality…it won’t really be competing with out-of-home virtual reality for quite some time.  Currently, it’s hard to predict if it’s going to happen in the next five years.  It remains to be seen which company (or companies) will not only step up and manage their version of the entire VR food chain but can also deliver a portfolio of experiences that consistently “wow” the buyer.  

2. Researchers estimate that the VR industry will be worth $33bn by 2022. Do you think this is realistic and what developments are in the works to make this the case?

In our opinion, this is somewhat plausible. Greenlight Insights, an organization that provides research and analytics on immersive technology, their markets, and consumers, recently published that the location-based VR industry could be worth 12bn by 2023, taking a sizable stake in the overall VR market. These numbers seem to correlate with many other analysts in the space. Predictions might be wrong, but just looking at the intense growth of HOLOGATE, building 200 locations in just 12 months shows that it might actually be trending in a positive direction. A recent investment of $68 million into Sandbox VR with only 7 locations shows this belief is backed by one of the leading Silicon Valley investors, Andreessen-Horowitz. 

3. Are dedicated VR arcades likely to grow in popularity? Why do you think? Where are they currently most popular and where do you think they will most likely expand into?

There are thousands of VR arcades in China. The rest of the world is staring to follow suit, but at a much slower pace. We are not convinced that an exclusively VR-centric arcade is the ideal business model. As there aren’t many great out-of-home platforms and experiences, the selection at a dedicated VR arcade might be of varying levels of quality as a result.  Cheap systems or bad experiences may leave the user with motion sickness, thus not having them return to the establishment or worse, spreading the word that virtual reality is bad.  As time goes on, hopefully there will be an increased number of consistently optimized VR platforms and experiences which can then fill an entire VR arcade with nothing but good VR. Sadly, many of the VR arcades in China have failed. There is much that can be learned by all of us through the trial and error of these brave early adopters during this wave of VR.

What we see being most successful is a location that provides a good mix of different attractions. Combining VR attractions with other more traditional attractions like laser tag, escape rooms, or even trampolines and bowling alleys. These more traditional attractions act as an anchor to bring the consumers through the door, which then increases the chances that unexperienced VR consumers will then discover the VR attraction while in the space.  

4. Is VR likely to become a standard anchor attraction or is it more likely to become one of many smaller attractions in a site? Why do you think so?

We believe both will be true. Currently, it might make more sense to have VR as a side attraction as most people are not even aware of VR or don’t really know what to make of it.  As soon as more and more consumers discover VR and have a great experience, we are certain that VR is likely to become a standard anchor attraction.  

5. Which is the more reliable investment; VR gaming or experiences? Why is this the case? Is this likely to change in the future? To what extent?

When you say “experiences”, we’re assuming that you’re referring to “narrative” VR pieces that take the consumer through a story as an observer or experiencing some minimal interaction. If this is correct, we don’t feel that it’s a more reliable investment to VR gaming.  The more the story is involved, the less players would come back and replay the same storyline.  

The more gamification, competition, and social interaction is involved, people will come back and play again and again.  Although we provide VR gaming, we also consider them to be experiences.  Our games allow the players the ability to see each other’s avatars, communicate with each other to strategize or playfully harass, and possibly own the bragging rights to the top score. We have found that this overall experience lead to repeat play.  

HOLOGATE is a platform, and as such, offers constant updates with new content that will eventually be exploring the middle ground between traditional games and experiences like escape rooms that are more focused on story.  

6. How much of an advantage is it for a company to create their own content? If not your own, which company is creating the highest quality content at the moment? What makes it stand out?

HOLOGATE has a phenomenal fast growing team that has a long history in creating premium content that seems to be resonating with consumers around the world.  Creating your own content is currently the best way to make iterations quickly and ensure that the final result is exactly right for our clients, operators and end-consumers.

Out-of-home experiences must be at a significantly higher level than the experiences that people can access at home. The out-of-home integration of haptic peripherals like feedback vests and blasters adds to the premium experience, features rarely found on a home system. The experience should resemble something that one would find at an amusement park.  Something so unique that it would entice consumers to gather their friends, get out of the house, and pay a premium.

7. What do you say to those who describe VR as a gimmick akin to cinema’s 3D? How is VR different?

VR is not like 3D cinema at all.  3D cinema is merely an enhancement to the two-dimensional cinema experience that we’ve been watching for over 100 years and many have resorted to the gimmicky effect of having objects appear as they are coming through the screen.  VR is distinctly different as it’s a completely new medium.  Rather than an enhancement of a flat two dimensional image, it’s the first time that the user can be placed in a fully immersive digital environment, often “transporting” them and making them believe that they are in another world.  

"VR is at 1% of what it will be one day"

It is presently the most immersive experience possible.  We are creatures that live, learn and think in three dimensional space and VR is just a natural extension to our already natural way of thinking and interacting with the world we know.

8. Hygiene and motion sickness are the two most common objections when it comes to VR. What solutions have there been to tackle this? 

Very simple: clean headsets properly after each use and create proper content that doesn’t make people sick. Both concerns should be better managed when more and more people are using this medium with a professional approach and care. 

HOLOGATE.com