Protocol Next Up
Defining the future of tech and entertainment with Janko Roettgers.

What’s next for Dreamscape’s VR centers

What’s next for Dreamscape’s VR centers

Good morning, and welcome to Protocol Next Up. This week: How location-based VR startup Dreamscape made it through the pandemic, and Facebook doubled down on the metaverse.

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The Big Story

Location-based VR lives on: What's next for Dreamscape

For a moment, it looked like the pandemic may kill location-based VR once and for all. Local health restrictions forced VR centers to shut down for months, and using shared VR headsets in a space occupied by strangers wasn't very appealing in the face of a deadly virus. Sandbox VR was forced into bankruptcy restructuring, Spaces sold and The Void shut down permanently.

There appears to be light at the end of the tunnel, though, according to Dreamscape CEO Walter Parkes. The AMC-backed VR startup opened up its locations a couple months ago, and just debuted a new "Men in Black" VR experience this week.

  • "We hit our highest post-COVID numbers last Saturday," Parkes told me this week. The company is now selling as many tickets as before the pandemic, he said.
  • When Dreamscape was forced to shut down its VR centers amid the pandemic, it quickly doubled down on other business areas. "We had a lot of wind in our sails to accelerate the work we were doing in education and training," Parkes said.
  • Some of that work includes a partnership with Arizona State University to develop an educational VR experience. "Students come in and use [Dreamscape's VR experience] like a big virtual laboratory, where they can actually operate as scientists and explorers," Parkes said. Dreamscape hopes to be up and running with ASU within the next six months.

But Dreamscape never gave up on location-based VR, and the company kept working on bringing "Men in Black" to VR through the pandemic. It's a title that's near and dear to Parkes' heart — he produced the first four "Men in Black" movies together with his wife and partner in crime Laurie MacDonald — and one he thinks holds a good lesson in how to build better VR experiences.

  • "Laurie and I optioned the six out-of-print comic books for 'Men in Black' just about 25 years ago," Parkes said. "It's exciting to be able to keep it alive in this new medium."
  • Parkes told me that "Men in Black" uniquely lends itself to a reinvention in VR. "It wasn't about superheroes, but rather about human characters," he said.
  • In other words: Stepping into the world of "Men in Black" is more believable because the main characters are a little bit like you and me. "There's an aspirational aspect of imagining what it would be like to be one of those agents," Parkes said.
  • Giving people agency within VR has been one of the key lessons Dreamscape has learned from its past VR experiences. "The trick is how to empower the audience in such a way that they truly are the stars of the show," Parkes said.

Now, Dreamscape wants to get back to growing its business. That includes both opening up new locations as well as embracing new technologies.

  • AMC recently resumed work on the next Dreamscape location in Paramus, New Jersey.
  • Part of the site will be Dreamscape's signature layout, which was conceived before the pandemic but has helped with distancing ever since VR centers reopened. "We have two gear-up and gear-down rooms," Parkes explained. "When six or eight people are enjoying the experience, we can clean the other gear-up room, clean all of the equipment and then get another group all suited up."
  • Dreamscape also recently closed its latest round of funding; the company started raising $40 million at the beginning of the pandemic. "It was quite successful; we exceeded what our target was," Parkes told me without sharing the total amount raised.
  • One of the new funders: Verizon, which wants to work with Dreamscape on bringing 5G to location-based entertainment.
  • "We are maybe 12 months from no longer using a backpack, and rather using local 5G networks to transmit the experience directly to a headset," Parkes said. "The whole system will hopefully be a little bit more simple in its operation, which will make the economics even more attractive."

Overheard

"Finally a clear and truthy explanation of why AT&T bought WarnerMedia and then undid the deal a couple years later: It tried to convince investors it was a high-flying tech company, but no one believed it." —Recode's Peter Kafka, responding to statements made by AT&T CEO John Stankey this week.

"I think you'll see some new product innovation from us in the months ahead." —Comcast CEO Brian Roberts, not quite ready to announce XClass TV at this week's Goldman Sachs conference.

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Watch Out

A CTO for the metaverse

Facebook's decision to replace outgoing CTO Mike "Schrep" Schroepfer with hardware SVP Andrew "Boz" Bosworth is not only a signal that the company is committed to AR and VR for years to come; it also shows that Facebook execs see the metaverse as a foundational technology, with the potential to eventually replace current cash cows like the company's core "big blue" Facebook app.

Bosworth made his name at Facebook through hardware, leading the company's AR/VR and consumer device efforts. (He's also been with Facebook since 2006 and is among Mark Zuckerberg's closest allies, which can't hurt.)

  • Under Bosworth's leadership, Facebook refocused its VR hardware play on the standalone Oculus Quest headset, selling an estimated 8 million devices to consumers since the launch of the Quest 2 in 2020.
  • Bosworth also managed to turn the company's Portal smart display from a product that was decried as a privacy nightmare into a viable competitor to devices made by Google and Amazon. "The backlash [against Portal] was very much predicted," Bosworth recently told Protocol. "It never really materialized amongst consumers."
  • More recently, Bosworth has been instrumental in setting Facebook up for a major role in consumer AR. The company has been testing AR devices in the wild, and Facebook debuted its first set of smart glasses together with Ray-Ban this fall.

But Facebook's ambitions are larger than devices. The company doesn't simply want to build and sell a couple million AR and VR headsets. Instead, it plans to launch the next big platform — something it arguably missed out on when mobile first emerged, forcing it to be just another app maker in Apple and Google's stores.

In fact, its vision is building the metaverse. Zuckerberg has been beating the drums about the metaverse being Facebook's future for months now, even telling investors that it will require "very significant investment over many years."

  • The metaverse is often described as a persistent digital world where people can interact with each other via their avatars, and then play, attend events or even work together.
  • Such shorthand descriptions often lead people to confuse the metaverse with VR itself, or assume that Facebook's Horizon VR world is the company's beta version of the metaverse.
  • Bosworth's promotion to CTO signals that this isn't the full picture. Instead, Facebook clearly understands the metaverse as a foundational technology that may one day tie together AR, VR and even mobile for new ways of real-time interaction.
  • In other words: It's not something you build a device for; it's something you build a company for.

And Facebook wants to be the metaverse company, for some good reasons. Usage of its core Facebook app has stagnated, and executives have long warned that the stream of advertising that has made mobile social networking such a cash cow is ultimately going to slow down. With the metaverse, the company is now betting on the next big thing. With Bosworth as CTO, it wants to have the right man for the job.

Still, there are some open questions — and no, not just about the viability of the metaverse, which we may not get real answers on for many years. Instead, we're left to wonder:

  • Who will now lead Facebook's hardware efforts? It's unlikely that Bosworth will completely step away from the Facebook Reality Labs leadership, so we should expect him to put a trusted lieutenant in place.
  • How will the CTO organization change under Bosworth? Schroepfer had a major focus on AI, which may become a lot more product-focused as the company begins to build assistants and other AI technologies for AR and VR. However, the outgoing CTO also oversaw engineering infrastructure, which is very far from anything Bosworth has dealt with in recent years.
  • What does all of this mean for Facebook's stance on privacy and the way it talks about the subject? Bosworth has been blunt about his willingness to talk about the ugly sides of Facebook, even if it has gotten him in trouble in the past. More recently, he has defended getting technologies like camera-mounted glasses into the world to get real-life feedback for future products. "I don't fear the controversy," he recently told Protocol.

That's a significant departure from the soft-spoken Schroepfer — and it could lead to a lot more conflict down the line.

Fast Forward

  • Locast was ordered to shut down its TV services. The company was trying to use its nonprofit status as a legal loophole for streaming broadcast TV stations, but the judge was having none of it.
  • On Protocol: Google is in talks to bring free TV to Chromecast, making it just the most recent company to jump aboard the FAST-channel bandwagon.
  • Netflix launched a free mobile plan in Kenya. While Netflix shows are popular in the country, the service itself isn't. The limited free plan is supposed to change that.
  • Netflix also launched a new VR game through Facebook's App Lab. Clearly a test, but an interesting one.
  • And Netflix bought the Roald Dahl Story Company, too. Are you ready for the Matilda Cinematic Universe?
  • SiriusXM started paid podcasting on Apple Podcasts. The new show, "Marvel Podcasts Unlimited," is all about — you guessed it — Marvel.
  • On Protocol: Facebook wants to kill the family iPad. The company's new Portal Go is all about portability and communal use.
  • Cinedigm has acquired Bloody Disgusting. Expect Cinedigm to launch additional horror FAST channels in the future.
  • Here's a closer look at using Fire TV in cars. Video downloads and USB media playback do make a lot of sense for those road trips away from cell phone coverage.

Auf Wiedersehen

I promise this will be the last time I write about AR-enhanced cereal boxes. Let's just say I bought a lot of Reese's Puffs after discovering that the company made three different AR versions of electronic instruments that can be unlocked with your phone camera. I'm a big fan of the drum machine! Sadly, no one in my family seems to be a big fan of sugary, peanut butter-flavored puffs. In fact, my daughter is so worried that we won't ever be able to get rid of all that cereal that she is leaving me mildly threatening notes around the house. I can only imagine what she will do when I start blasting my first track 24/7…

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Thanks for reading — see you next week!

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