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

From arcades to telekinesis, here’s what’s next for VR

From arcades to telekinesis, here’s what’s next for VR

Good morning, and welcome to Protocol Next Up, a weekly newsletter about the future of technology and entertainment. This week, Next Up is all about immersion. In light of The Void's troubles, we take a look at the challenging post-COVID world of location-based VR. Plus, get ready for VR headsets that can read your mind.

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The Big Story

The Void may be toast, but what about out-of-home VR?

This was not a fun story to write: Location-based virtual reality pioneer The Void defaulted on a loan, leading to the lender taking over its assets, as I reported Monday. "We plan to operate or sell them," The Void's new owner, Jim Bennett, told me, not exactly instilling confidence in the company's future.

I visited The Void's headquarters in Utah in 2017, had a chance to play a handful of The Void's experiences over the years, and have always loved it. From the rumble vest that would provide tactile feedback to doors, levers, and shaking floors, the level of immersion was unrivaled by anything your typical home VR setup could offer. And for a second, it looked like The Void and its out-of-home VR competitors might just get people hooked on VR before headsets became mainstream.

Then came COVID-19. The pandemic forced The Void and other location-based VR startups to close locations around the globe, instantly putting their financial future at risk. "We went from a relatively healthy business to zero revenue," Sandbox VR CEO Steve Zhao told me in June. Two months later, Sandbox filed for bankruptcy. Spaces, which had built a "Terminator" VR experience, got acquired by Apple in August.

But it wasn't all COVID's fault. A Void retail employee told me that the company laid off a number of staffers in late 2018, suggesting liquidity issues. When The Void ordered $6.1 million worth of server racks, tracking cameras and other equipment from a vendor in early 2019, it wasn't able to pay the bill, resulting in a lawsuit. And despite raising money from James Murdoch and others that year, the company also had to take a loan in 2019 that it ultimately defaulted on. It probably didn't help, either, that The Void went through four CEOs in five years.

So where does location-based VR go from here? Is the demise of The Void a bad omen, or should we expect the industry to resurface after the pandemic subsides? I asked a couple of VR executives for their insights:

  • HP's Global Head of VR Joanna Popper has seen signs of a turn-around: "We have heard strong numbers from the open venues, showing strong customer disposition to return. In some ways, LBVR operators are at an advantage to other location-based entertainment venues. Group sizes tend to be smaller at four to 10 people, which facilitates physical distancing. Party size benefits LBVR establishments as compared to cinemas or concerts, and we are seeing some venues put procedures in place to ensure that guest groups aren't mixed with other groups."
  • Venture Reality Fund co-founder Tipatat Chennavasin struck a more skeptical tone: "LBE VR was always a risky proposition even before COVID, especially with throughput always being a limiting factor, and also the rate of innovation and market adoption of consumer VR. Even now with a few vaccine options that suggest a reopening might be possible in mid-2021, it still seems like a risky proposition to run LBE VR, especially when talented developers are already making tens of millions of dollars in the consumer market with high margins and won't be at risk during the next pandemic."
  • Baobab Studios CEO Maureen Fan suggested that VR centers could actually benefit from consumers being cautious: "As COVID fades next year, LBE experiences will see a revival as consumers look for quick ways to escape and entertain while avoiding travel. Businesses may look for alternate ways to virtually communicate while avoiding travel. LBE focused on enterprise, education and theater can be an alternate form to business travel, going to Broadway and conferences."
  • Doug Griffin, former CEO of location-based VR startup Nomadic, was cautious: "People will be clamoring for physical connection in the post-COVID world. LBVR has the opportunity to solve this desire, mixing game-like worlds with physical movement. But operators are facing novel challenges. In addition to the high CAPEX of standing up venues, mixed with the operational challenges of managing undulating foot traffic, operators now [have to deal with safety concerns]. Will people brave the risk? It's too early to tell."

Overheard

"I tried when I was chairing DirecTV to acquire Netflix because I knew it was going to be a home run." —Liberty Media Chairman John Malone during a fireside chat at the Paley International Council Summit.

"If I had a quarter for every time Hollywood has made my job harder with their shitty AR/VR interface designs I would be a rich person." —Niantic UX designer Alexandria Heston, dunking on the kinds of interfaces featured in movies like "Minority Report," "Iron Man" and "Black Panther."

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Watch Out

In a few years, VR headsets might read your mind

When Conor Russomanno was in grad school, he hacked a Star Wars Force Trainer toy to display EEG brain waves on his computer. "That was a love-at-first-sight experience," he told me this week. Fast forward a few years, and that early passion project has turned into an ambitious attempt to supercharge augmented and virtual reality hardware with neuroscience.

OpenBCI, a neurotechnology company founded by Russomanno in 2014, introduced a new platform called Galea on Thursday that aims to give developers an easy way to combine their AR and VR hardware and experiences with a wide range of biofeedback. Starting early next year, OpenBCI plans to ship a hundred Galea units to developers and researchers as part of its early-access program.

  • Galea is a piece of headgear that is meant to be combined with existing VR headsets, and packs a number of sensors, including electroencephalogram (EEG), electrooculography (EOG) electromyography (EMG), electrodermal activity (EDA) and photoplethysmography (PPG). OpenBCI tried to add as many sensors as possible, Russomanno said: "We're going for broke."
  • Galea also includes analytics software to interpret all that sensor data. Russomanno told me that it was important to him to not just interpret EEG data, but also pay attention to heart rate, muscle movements, sweating and more. "The fingerprint of the mind is actually all over your body," he said.
  • The results can then be used as input for common development environments. Russomanno said this would allow developers to build AR or VR experiences that you can control with your mind or with subtle facial muscle movements. "Imagine a choose-your-own-adventure where you don't actually have to choose," he said.

OpenBCI is not the first company looking to add biofeedback to AR and VR. HP's new Reverb G2 headset already tracks a user's eye movements, facial muscles and heart rate. And last year, Facebook acquired a startup that built a mind-reading wristband, which could eventually allow it to add virtual keyboards and more to VR.

Russomanno told me that he fully expects VR headsets to use EEG and similar neuro inputs within the next five years. "I want to beat Facebook to it," he said. Thus far, OpenBCI has not taken any outside funding, but he said that this may change in 2021.

Fast Forward

HomePod Mini reviews are in. Reviewers seem to like Apple's smaller smart speaker, but some think that similarly priced devices from Amazon and Google sound better.

COVID-19 canceled YouTube Rewind. Well, actually YouTube did, saying: "2020 has been different. And it doesn't feel right to carry on as if it weren't."

On Protocol: Disney+ reaches 73.7 million subscribers a year after launch. International expansion is becoming a big driver for Disney's streaming service, with 25% of all subscribers now coming from India.

More Protocol: Pluto TV CPO Shampa Banerjee explains why free video is booming. Pluto ended Q3 with 36 million MAUs — so what is its secret sauce?

Even more Protocol: Inside YouTube's plan to win the music-streaming wars. YouTube Music has 30 million subscribers. Here is how it plans to grow further.

Much more Protocol: Sonos CEO Patrick Spence says there's money in ad sales for the company. Sonos just had a pretty strong quarter. Now, it is looking to build out an in-house ad sales team.

Vewd wants to bring streaming TV to cars. The company formerly known as Opera TV introduced a cloud-based streaming platform for car entertainment systems this week.

YouTube launches audio ads. Just in time for the demise of Google Play Music, YouTube is introducing an audio-only ad format.

There is now a Tinder for movies. Yes, you get to swipe right on movies you want to watch. No, it doesn't help you with your dating life.

Auf Wiedersehen

Music copyright has long been a hot topic for online video platforms. Hardly a week goes by without legal threats, lawsuits and take-downs that are, depending on who you listen to, either meant to sabotage the online media business or an overdue last stand for music rights holders. And every now and then, things even get funny. Consider the case of Twitch streamer Mofoe, who recently decided to make himself a snack during one of his live broadcasts. "I made a smoothie and my blender was flagged as a Skrillex song," he reported on Twitter this week, adding: "I guess cooking streams aren't allowed on Twitch anymore."

The good news for dubstep and smoothie fans alike: YouTube is welcoming them with open arms, including this guy, who managed to remix a Skrillex song with his kitchen blender all the way back in 2013.

Thanks for reading — see you next week!

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