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The VR race is heating up again

The VR race is heating up again

Good morning! This Wednesday, HTC struggles to catch up in the VR space, the chip shortage comes for Apple, Coinbase gets into NFTs and another former Facebook employee wants to talk to Congress.

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The Big Story

Can anyone beat Facebook in VR?

HTC is going to unveil its newest VR device tomorrow: The Vive Flow is designed as a lightweight consumer headset optimized for media consumption that will ship without controllers, as we were able to report this week. (Here's an early peek at what it looks like.)

The Flow is HTC's latest attempt to compete with Facebook in the consumer VR space. It's something the company used to be quite good at: The original Vive was at one point considered the gold standard in PC VR, thanks in part to tracking hardware engineered by Valve that made it possible to operate a much larger playspace than what was supported by Facebook's Oculus Rift.

Still, HTC is playing catch-up. Facebook has poured billions of dollars into both a content ecosystem and standalone VR tech, which eventually resulted in the launch of the Quest in 2019.

  • HTC's own standalone headsets were too bulky and expensive to go head-to-head with Facebook's Quest, so the company is instead selling them to enterprise customers.
  • HTC is still selling Vive headsets to PC VR enthusiasts, but that's a smaller market with much less growth potential.
  • Plus, the Vive isn't even the obvious choice for PC VR gamers anymore: Former partner Valve is now selling its own Index headset, and Quest users can play PC VR games simply by plugging their headset into a compatible gaming PC — which has turned Facebook's device into the most popular PC VR headset as well.

Now, HTC aims to reenter the consumer market with a unique proposition. Pre-announcement marketing material hints at plans to bill the new device as a headset for people looking to meditate, relax and lean back. Casual VR that won't require you to break a sweat.

  • There could be a market for this, as video viewing regularly was one of the most popular experiences on lower-powered VR headsets like Facebook's Oculus Go.
  • The Go didn't have the type of tracking necessary for 6 degrees-of-freedom VR; Vive's latest headset is expected to offer this functionality, which should make its experiences a lot more immersive.

Competing with Facebook won't be easy. HTC doesn't have nearly the same resources available to lure developers onto its platform as Facebook, which has been busy buying game studios and doling out money to third-party developers. And without developers creating unique experiences optimized for the device, the Flow may not look all that different from the Oculus Go.

  • The biggest hurdle will be price. Facebook can afford to sell hardware at cost while HTC needs to actually make money with its devices.
  • And with the Quest 2 selling for $300, it will be challenging to convince consumers to spend more for a headset that can ultimately do less.

But Facebook hasn't won yet. VR is still young, and there are plenty of companies still vying to unseat the market leader.

  • Sony has plans to announce a new PlayStation VR headset next year, and has a built-in customer base: PlayStation 5 sales surpassed 10 million units this summer.
  • China's Pico was acquired by TikTok owner ByteDance in August.
  • Enterprise-focused VR startup Varjo is rumored to launch a consumer version of its high-end PC VR headset next week.
  • And then there's Apple, with a still-unannounced mixed reality headset that's been just around the corner for some time now.

What unites most of these companies is that they have deep pockets, allowing them to spend billions of dollars to seed their own VR ecosystems. And that's something that HTC simply can't afford.

— Janko Roettgers (email | twitter)


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People Are Talking

The future of podcasts is interactive, but Spotify's Mike Mignano said we're not there yet:

  • "We haven't really seen anyone yet crack the code on true listener-to-creator interactivity on listening platforms."

Slack is great and all, but design researcher Simone Stolzoff says it's hard to turn off:

  • "We're like sharks who are sleeping with one eye open."

On Protocol | Enterprise: Partnerships are the way forward for companies that want to move fast, ServiceNow's Bill McDermott said:

  • "The days of these multiyear, high-risk, tough-to-get-the-value-out-of projects were an artifact of the 20th century."

Sen. Gary Peters wants to know how TikTok deals with violent extremist content:

  • "These companies must do a better job of monitoring and preventing the proliferation of hateful ideologies."

On Protocol: TuneIn's Richard Stern doesn't care to be like Spotify or Sirius, because their businesses are just ... very different:

  • "Our value proposition really lies in a massive directory of global radio."

Making Moves

William Shatner is heading to space today. The flight was delayed a day because of bad weather, and it's expected to launch at 6:30 a.m. PT.

Coinbase is getting into NFTs by adding them to its crypto marketplace.

Stripe is putting together a crypto team, starting with at least four crypto engineers.

Diego Piacentini is joining CLIPr's advisory board. He's a former Amazon and Apple exec.

Caroline Ellison and Sam Trabucco are now Alameda Research's co-CEOs. They've been trading with the quant crypto trading firm for some time.

In Other News

  • Who's banned from Facebook? Hate groups, terrorists and many others, according to a DIO list published by The Intercept. Experts say the list disproportionately penalizes marginalized groups.
  • Andreessen Horowitz is going to Washington. The firm is planning to meet with "top leaders" around the government to talk about crypto, web3 and regulation.
  • Apple is launching more new stuff next Monday. We're expecting a new MacBook Pro and new AirPods. And probably not a self-driving car or AR glasses, but you never know!
  • Get ready to hear more from inside Facebook. Fired employee Sophie Zhang said she would talk to Congress about the company. She's expressed worries before that Facebook doesn't go far enough to address misinformation and hate.
  • Squid Game is Netflix's biggest new series ever. The company says it has attracted 111 million viewers since it dropped Sept. 17, which means there are sure to be more bonkers life-or-death game shows coming soon.
  • Apple is taking a hit from the chip crisis. The company plans to produce millions fewer iPhones than originally planned because of the ongoing shortage.
  • On Protocol | Workplace: Salary calculators keep employees around, whether execs are ready to disclose them or not. Some companies are using compensation calculators for employees, and sometimes even candidates, for full transparency.
  • Seattle real estate grew alongside tech last year. The industry seized on local graduates and lots of undeveloped land just outside Seattle, helping it become the top destination for tech companies to lease office spaces in 2020.

One More Thing

The robotics engineer who could

Just imagine if the iPhone had a USB-C port. Everybody would always have the right cable for everything, and even if they didn't they'd be able to borrow the right cable, because there would only be one kind of cable to borrow! It would be like some kind of tech utopia. Anyway, while everyone was dreaming about that, Ken Pillonel made it a reality for himself.

The robotics engineering student spent his free time over the last few months creating a USB-C iPhone. He posted a teaser video showing off the device, and he's expected to post a full-length video soon with more details. He just made a lot of people feel very excited about the future.


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Thoughts, questions, tips? Send them to, or our tips line, Enjoy your day, see you tomorrow.

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