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March 25, 2021
Good morning, and welcome to Protocol Next Up. This week, we've got an update on the fate of The Void's VR center in Las Vegas, and a scoop about new devices made by educational computer vision startup Osmo and its new owner Byju's.
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The Big Story
Sandbox VR emerges from bankruptcy, moves into former The Void location
In a sign that location-based VR may be on a road to recovery, Sandbox VR is getting ready to open up new locations after it reemerged from bankruptcy at the end of 2020. Ironically, the first new spot to be announced this week is The Void's former Las Vegas outpost in the Grand Canal Shoppes at the Venetian hotel and casino.
- Sandbox VR was forced to close all of its locations due to the pandemic a year ago, and ended up laying off 80% of its staff. "We went from a relatively healthy business to zero revenue," CEO Steve Zhao said at the time. In August, Sandbox's U.S. subsidiaries filed for bankruptcy protection.
- By December, the company reemerged from bankruptcy, and it has been operating a few select U.S. stores with new safety protocols in place. The remaining locations are scheduled to reopen by April.
- Now, the company has signed a lease for the same Las Vegas location that was previously used by The Void, with an opening planned for early summer.
"I think the companies that can survive the pandemic will see tremendous growth coming out of it," Zhao told me recently. "There's pent-up demand for out-of-home activities, and retail experientials like Sandbox VR can provide an outlet for friends and family to meet and socialize in person."
Not every location-based VR startup is making it through the pandemic. Spaces, which was offering a Terminator-themed VR experience at select movie theaters, shut down after being acquired by Apple in August.
And The Void, long seen as the leader of the pack, sold its assets to a lender late last year. The company's website has since gone offline. Part of The Void's problem may have been that it spent heavily on prime real estate, with locations including the World Trade Center and Disneyland Resort.
Sandbox VR will treat the new Las Vegas store as a flagship store, but Zhao said he crunched the numbers to make sure it can be operated profitably before signing the lease. He added that the company was aiming to be frugal about real estate. "We don't generally pick prime spots," he told me. Most customers book their Sandbox experiences online, so the company isn't as dependent on foot traffic. "Generally we select locations … that are not as conveniently located, which comes with much more favorable leasing terms," he said.
There may be a short window of opportunity for VR startups right about now: Commercial real estate has been hit hard by the pandemic, and landlords are eager to fill up those empty mall stores in time for the vaccinated masses to return. Sandbox VR plans to operate 15 locations by the end of the year, up from 10 before the pandemic.
The real challenge will be to convince consumers that these facilities with their shared headsets are safe. Sandbox is sanitizing its equipment between use, mandated mask-wearing at all times and has reduced bookings to make sure guests from different parties don't bump into each other.
With those measures in place and vaccinations ramping up, Zhao hopes that people are ready to take a break from reality. "The pandemic has been so isolating for everyone," he said. "Once it is safe to gather with friends and family from different households, [people] will be looking for social experiences that offer some fun and escape from the difficulties that 2020 brought."
"Marvel's Black Widow decision is pivotal. For months, Disney suggested that the film was far too critical to be released as a premium stream through [Disney+]. With this decision, Hollywood's premium streaming model will likely be around for good." —2PM founder Web Smith chimes in on Disney's decision to release "Black Widow'' simultaneously in theaters and as a paid movie on Disney+.
"The Apple glasses are the big event that everyone is circling on the calendar." —Survios President Nathan Burba, reflecting on the anticipation the VR industry is having for Apple's much-rumored AR/VR headgear, during Protocol's The State of VR in 2021 event.
A MESSAGE FROM INTEL
In an interview with Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., Lantzsch shares his take on edge computing: There are more innovations to come – and technology leaders should think equally about data and the algorithms as critical differentiators.
Osmo & Byju's are making an education-focused AR smart display
India's Byju's may be getting ready to sell its first hardware to U.S. consumers: Together with its Osmo/Tangible Play subsidiary, Byju's is making a smart display-like product that uses AR to extend learning beyond the screen, I was able to glean from some recently published FCC filings.
"We're indeed exploring different form factors to make Osmo/Byju's accessible for more kids," a company spokesperson told me via email without elaborating further.
Dubbed LearnStation, the product looks a bit like Facebook's first-generation Portal smart display, complete with a large horizontal speaker grille below the screen. However, there's a key difference: Byju's LearnStation features two front-facing cameras. One, placed on the lower bezel of the screen, is designed for video chat. The second camera, sitting atop the device, faces downward, and is capable of capturing the tabletop space right in front of it.
LearnStation runs on Android and is based on technology developed by Tangible Play. The Bay Area-based startup was acquired by Byju's for $120 million in early 2019, and is best known for its Osmo products.
- Tangible Play has developed a series of Osmo-branded apps that make use of computer vision to add physical objects to digital gameplay.
- The hardware behind Osmo has always been amazingly simple: Consumers just place their iPad or Android tablet into a special stand and cover the device's camera with a small clip-on mirror that redirects its field of view toward the tabletop surface right in front of the stand.
- Kids can then use a variety of props, including Tangram puzzle pieces, cards with letters and even just pen and paper, to interact with Osmo games. It's a pretty magical experience that's a bit like reverse AR: Instead of projecting digital objects onto the real worlds, it incorporates the real world into digital environments.
But while Osmo's bring-your-own-device approach allowed it to launch products with very little overhead, it also put the company at the whim of other device manufacturers. Plus, an all-in-one device is likely easier to sell to schools than something they have to cobble together using third-party tablets.
That's why Tangible Play has been exploring the idea of a custom tablet for some time. The company hired Pebble's VP of hardware product and industrial design, Mark Solomon, as well as Pebble co-founder Rahul Bhagat in 2017; on LinkedIn, Solomon says he is working on "new stuff," while Bhagat's profile states he is working on "stealth programs."
I've been told by someone in the know that Osmo was looking to build its own tablet display even before getting acquired by Byju's. Word is that Osmo was looking to take its tech beyond edu-tainment, but LearnStation seems to be squarely focused on education.
The FCC filing suggests that Byju's is looking to sell the device both in India and the U.S., and there are signs that the company may plan to release additional devices down the line: In addition to a LearnStation trademark, Byju's also recently filed to secure the rights to the word mark LearnPad.
When Amazon unveiled its first Echo Show in 2017, it positioned the device very much as an all-around smart display, perhaps with some added bonus features for the kitchen. Since then, the smart display device category has matured, and recent iterations have focused on more-specialized use cases (a picture frame for the living room, a sleep monitor for your bedroom, a 360-degree swivel arm for your kitchen island).
One could argue that the LearnPad is technically more like a mounted tablet than a smart display, but those lines are starting to get pretty blurry — and there may be an opening for an education-focused device of this kind for kids' bedrooms and school classrooms.
- Amazon now streams live news in 88 cities. The company added a bunch of local stations to its Fire TV News app.
- On Protocol: The story behind YouTube Shorts. YouTube's latest video format is a TikTok clone — but it's also an attempt to reinvent YouTube itself.
- Bloomberg Quicktake reaches 7.4 million monthly viewers. Bloomberg first launched the 24/7 live online network in November, and has since brought it to the Roku Channel, Tubi, Haystack and elsewhere.
- Amazon is spending $10 billion on Thursday Night Football. The ecommerce giant recently struck a 10-year deal with the NFL, with streams starting in 2023.
- Apple is building its own smart displays. The company apparently also added a temperature sensor to its HomePod Mini, but never told anyone about it.
- Apple's upcoming AR/VR device supposedly weighs less than an iPhone. That's less than 150 grams, to be precise. Facebook's Quest currently comes in at around 500 grams.
- ViacomCBS plans to sell $3 billion in stock for streaming content. Competing with Netflix and Disney+ is expensive, so ViacomCBS wants to turn on the money printer.
- T-Mobile may shut down its TVision service. The telco is reportedly losing money on TVision, but raising prices so soon after launch would be off-brand.
I told my 9-year-old that I needed an idea to finish this newsletter, and she suggested a riddle: "Which day doesn't have Ys in it?" (Here's a hint: It's the day after today…)
Thanks for reading — see you next week!