#635: Candid Assessment of the VR Industry from a Leading Indie Developer

denny_headshot-200x200What is happening with the VR industry? Is the adoption and growth still on target to support a vibrant and diverse ecosystem of independent VR developers? Leading headset manufacturers have not been transparent in sharing any specific information, and the analyst data that’s been released have not been a reliable or comprehensive source of data. So it’s been difficult to get an honest and candid assessment about the overall health and vibrancy of the virtual reality ecosystem. But there are a few companies who have some deeper insights into the VR ecosystem, and these are the independent VR development companies who have released best-selling VR titles.

Denny Unger of Cloudhead Games has the unique perspective of having a launch title of The Gallery: Call of the Starseed with the HTC Vive, and then a year and a half later they released the second episode of The Gallery: Heart of the Emberstone. There was a significant dropoff of sales of their second title from the first title, and so Unger has the experience of going from the “Peak of Inflated Expectations” on the Gartner Hype Cycle down into the “Trough of Disllusionment.” He expects that VR will turn the corner within the next couple of years, and that focusing on producing smaller experiences aimed at the location-based entertainment market is a going to a way to survive this temporary winter in the VR market.

Unger says that headset sales are being used as the primary metric for success, however, as an independent VR studio they are more interested in looking at the active attachement rates when doing their own internal planning for the next couple of years. That is, how many VR consumers are using their VR headsets either every day or at least once a month? Versus how many have bought a VR headset, but aren’t using it because the content hasn’t been compelling enough for them?

Unger suggests that the active attachment rates are the more important metric, but no one in the VR industry wants to have a transparent and honest conversation as to how this ecosystem is growing, how to best track and promote the growth, and reflecting on whether or not their strategies are working. Unger suggests that there’s a middle-tier of independent VR developers who have not received a lot of support from the major headset manufacturers, and even the mainstream press hasn’t been investing the time or interest in covering some of these non-AAA tier VR game experiences.

So I had a chance to catch up with Unger at GDC where we have a candid conversation about the state of the VR industry, why he thinks VR games may be in the “Trough of Disllusionment” (it could be in the slope of enlightenment for other VR industry verticals), and some of the things that major headset manufacturers and content funders can do to support this middle tier of VR development in order to have a more robust, healthy, and vibrant VR developer ecosystem.


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Rough Transcript

[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to the Voices of VR Podcast. So at GDC this year, when I went to the conference, the underlying question that I was trying to answer was, what the hell is going on with the VR industry? I think that when I talk to the major headset manufacturers, I get a certain amount of line of like, everything is fine, it's great, we're growing. But when I talk to developers, I'm getting a little bit of a different story in terms of the vibrancy of what it means to be an independent virtual reality developer today. So I like to go to GDC to be able to talk to different independent developers and talk to them off the record to just get a sense as to what's happening in the industry. And so I had a chance to talk to Denny Unger of Cloudhead Studios, and they had a couple of experiences. One was a launch title for the Vive. It was the gallery called the Sarseed. And the other one was called Episode 2, which was called the Emberstone. And that was what Denny said was released at the trough of disillusionment. The market changed from when their first episode came out from the second episode was so stark that they just started to think, okay, what is going on in this larger industry and why aren't we talking about it? So I had a chance to talk to Denny to talk about some of the metrics they look at in terms of the attachment rates of how many people are actually picking up the headset and using it day to day and what his strategy is as a company as they're moving forward into this next couple of years of being an independent virtual reality developer. So that's what we'll be covering on today's episode of the Voices of VR podcast. So this interview with Zinni happened on Thursday, March 22nd, 2018 at the Game Developers Conference in San Francisco, California. So with that, let's go ahead and dive right in.

[00:01:52.868] Denny Unger: I'm Denny Unger, CEO and Creative Director at CloudEd Games. CloudEd has been in VR since 2013. Roughly, we're a pretty small team, 10 to 15 people, based in Vancouver. We did two games that most people probably know, Call of the Starseed and Heart of the Emberstone. So I just recently did a talk called Fear and Loathing in VR, where I discussed the challenges of the current industry and how to survive over the next two years. So I don't know how you want me to unpack all of this.

[00:02:21.362] Kent Bye: So what's your plan? I mean, in some ways, you're in a privileged position in the sense that you've released a number of games that have been very well-reviewed, very well-received. You've built your brand and industry. And so in some sense, you've made it as much as you can make it. So there's also a sense that nobody's really talking much about numbers or a headset, what's going on in the industry. So I myself was just trying to get a sense of what can you tell me in terms of what you look at to look at the health and vibrancy of the ecosystem and how you're going to personally navigate that.

[00:02:50.894] Denny Unger: Yeah, and that's how I was trying to approach it. So I started talking about the Gartner hype cycle, you know, the peak of over-ambitious, everybody thinks that it's going to be this amazing technology, and then the trough of disillusionment. And I put the first release of our game, Call of the Starseed, on the kind of peak of expectation. That's when it launched, and it did really well because of that. It got really great press coverage. It was, you know, bundled with the Vive. It did a bunch of right things. The market as a whole though continued to decline and 18 months later we put out Heart of the Emberstone at basically the bottom of the trough and it was a stunning difference for us in terms of how the press actually handled looking at that title. I'm not just going to go off about press, this is just one component of problems in the market. So we were flat out told, we are not covering VR content. It doesn't get clicks by many mainstream PC publications.

[00:03:42.396] Kent Bye: So they're being driven by the algorithm, in some sense. They're not seeing the click-throughs, and so they're not going to cover it. That's right.

[00:03:48.661] Denny Unger: So my next slide was, VR is dead and it will kill you. Because that's the kind of stuff you get in the press. It's click bait based around the death of the industry, or how terrible it is, or whatever. And those stories are primarily based on just how do we get clicks for this topic. Or you get coverage for, you know, a very small handful of AAA titles. But if you don't fit in that bucket, your game is not going to get covered and it's going to hurt you in the current market because the reality is the current market, the active attach rates are so low that you need every single one of those mechanisms firing on all cylinders to actually make profit. to be a successful company.

[00:04:27.531] Kent Bye: Can you just unpack that? What does it mean, active attach rates, and maybe just what's that mean for anybody who's not familiar with that?

[00:04:34.335] Denny Unger: Just generally, I can say this probably about every major headset that's on market, they might have good sales numbers, they might have sold a lot of units for headsets, but the actual active user base is small. So the number of people that are putting the headset down after purchase is quite high, higher than most would want to talk about. And it's because the content gap there, there needs to be a compelling reason to pick up the hardware and do it all over again. For enthusiasts, that's not a big issue, but for a wider demographic of users, it's a harder prospect for them. And again, it's true of every single platform. They'll come out with these numbers about how great their headsets are selling, but they don't talk about what the actually active user base is. And so whenever we're doing internal numbers on trying to project what kind of profit we'll get from this niche and working all that out, it's always based on the active user base, not the number of headsets that have been sold.

[00:05:25.585] Kent Bye: And they're not selling us either one of those numbers. So how does anybody who's not initiated into that secret cable of having your direct empirical experience of your titles, how is anybody supposed to

[00:05:36.450] Denny Unger: gauge that? Yes. So that crosses over with a really challenging problem in the industry where when VR kind of first kicked off and rebooted, there was a lot of money going into content. There was a reasonable amount of money being injected into the system because it has to be. But as we kind of fell down that curve of the hype cycle, that money started disappearing from all of the major headset manufacturers. You know, there were still investments happening, but typically for a small handful of AAA titles. And so on market, what the consumer would see is, you know, three or four high quality titles, and then this big middle line of shovelware and shitty clone experiences, or low risk projects by basement developers, like one or two guys, and they'd have nothing to lose. And then at the bottom of that pile you had a bunch of middle-tier developers that were truly innovating in the space and doing some crazy, I'm not talking about us, I'm not being egotistical in that way, I really believe there's this really strong foundation of middle-tier development that completely got left in the dust, proportionally, by funding mechanisms in market. So, my argument is kind of, there needs to be a greater influx of money going into middle-tier development, as well as AAA content. And now, more than ever, that needs to happen.

[00:06:52.720] Kent Bye: This is a decision that Oculus made in terms of them kind of funding these high AAA games which I'm here for I guess I started coming here in 2015 and this is 2018 so it's like my fourth year being here and here at the Valve room there's so much innovation when it comes to the different user mechanics and there's innovation that's happening here. And literally some of the demos I saw at Oculus' booth was on the Oculus Go with an experience that could have been created like three or four years ago. It was a board game. It was the Settlers of Catan, and I have a 3DOF controller and a mobile headset, and there's nothing innovative with that. like I get frustrated because they're not pushing the innovation forward on that side, but they're also have decided to fund all these games that don't actually use the unique affordances of VR. They have these levels of abstraction where you're pushing buttons and trying to do this slow transition into VR where it's, you know, trying to take people who are used to the embodied reactions of being able to use a hand track controller. I mean, just the fact they didn't launch with the Six Degree of Freedom controllers is an indication that they were trying to do this slow and easy transition into this new medium rather than using the unique affordances of that medium. And still to this day, a lot of the content that they've developed, very little of it has been pushing the edge in terms of embodiment or the very unique things that you could only do in VR.

[00:08:06.780] Denny Unger: Yeah, what I want to say about that is I would really like to see a change of tack from those studios, thinking more about the innovation that comes from the middle tier, because it's going to drive content that fits platform much better, right? So instead of giving money to a handful of AAA buddies who maybe never even had development experience in VR, you're going to get a certain... There's a big gap between what a studio with knowledge in VR can do versus a studio that has zero knowledge in VR. And sure, they can read best practice guides and they can do all that, but there is some kind of inherent lessons that take time to learn in design and how you handle and tackle hard problems in VR. So not that those studios can't do that, but it's completely disproportionate. So yeah, that's a big problem. So you have this kind of perfect storm of like zero mainstream press coverage for developers who are dumping millions of their own capital to take the risk in VR. and not enough support on industry for developers of a certain studio size. And that's not to say that all the OEMs, all the manufacturers aren't dumping in resources, it's just I see billions being poured into hardware and a fractional percentage going into software development. And this is the first time really that that's happened. Like when you look at Xbox and when it first launched, they were paying for titles outright. For developers to, you know, we've got this new platform, we need software built for the platform, here's money, go do that thing. And we started on a good trajectory and it's kind of gone downhill from there. So, yeah, a redistribution of wealth, some more creative thinking there. Maybe it won't happen, but the other thing I would like to talk about with the industry is maybe a moratorium on RevShare models for all of the storefronts that are doing VR right now. This isn't gonna happen.

[00:09:56.484] Kent Bye: Do you think that you need a private container to do that amongst a group or just to have it open out in the public?

[00:10:03.901] Denny Unger: I don't think it's going to happen, but it's a discussion that should happen. HTC is doing it with Viveport. There's no RevShare on a specific program. You'd have to look it up to read more about it. But I think it's an important strategy for the stimulation of new developers getting into the space. So companies that might be on the edge of going, I don't know if we should take a risk here, would suddenly see, oh, well, they're forgiving RevShare for a year. So maybe that makes sense for us to make that investment and do the innovative thing we want to do, right? So I think it would stimulate software growth from all tiers, but that's unlikely to happen. So there needs to be more discussion about a creative distribution of funds to develop more content on every level because I don't think it's just, you know, support the middle tier and everything gets fixed. You have to be generating AAA content. You have to be generating a healthy middle. and that's the only way you're going to get over this bloat of garbage that the consumers typically see. Because then it's a vicious cycle of a consumer seeing this massive catalogue of awful titles, and that's kind of their entry point into VR, and then putting the headset down, there's no retention there. Because they think, well, that's VR, it sucks, you know? So curation is another big issue, I think, and I think the industry started strong with giving the press a good kind of bucket of curated content to look at. The mainstream press, I think, especially as we're kind of trying to climb out of the bottom, that has to happen again. There needs to be an aggressive push to give the mainstream press hardware and a curated list of titles that represent sort of the best of, in terms of experience, so that the mainstream press has a basis of comparison to talk about these experiences. So when they review the next game, they've already had that bucket of experiences, they know what the capabilities of platform are, and they go, okay, I have that reference point and now I can speak to this honestly. Because I think a lot of times what happens in the mainstream gaming press is they just have that basis for comparison doesn't exist at all So they're trying to review this game and very typically they'll get a game that is ported or doesn't make sense for the format and think that that's what the state of VR is and Once again, they have no basis to understand what a good VR experience is So I think there needs to be a stronger push now, especially There's something else I'll think of in a minute

[00:12:22.760] Kent Bye: Well, I think that there's a couple of things here. There's the marketing aspect of getting the word out, and there's the press angle, but there's also a word of mouth and, you know, recommendations, other things to, you know, generate buzz and marketing for each company. But I think that we were talking a little bit about, like, you know, looking in hindsight and maybe doing some armchair quarterbacking and sort of making judgments as to how things went. I mean, in some sense, that's done and it's over with, and hindsight is 20-20, and it's really difficult. As you're creating something completely new that's never been done before, it's hard to know exactly the best path. But at the same time, because there isn't a lot of transparency on anybody in the industry in terms of what is either the sales numbers but also the the attach rates of how many active users are monthly or daily active users. Without that level of transparency, it's a little bit of everybody shooting in the dark. And I think that the lack of talking about it, I think is also creating this more fear of the FUD, fear, uncertainty and doubt. And so the way to break the FUD is to talk about it. So if you were to go to HTC PlayStation and Oculus and any other major marketplace that's out there, whether it's Steam or the Oculus Home, and you would want to have available for not only yourself, but the entire community, what could they do if they made a decision to be able to help give some analytics to allow people to see, oh wow, this particular game is taking off, but nobody's known about it. I mean, in some ways there's a private element for each developer. But I'm just curious if there's a way to have some balance between the privacy aspects for each individual company, but also something that's going to be cooperative in terms of what's going to help the overall industry figure out the status and what is working and not.

[00:14:06.623] Denny Unger: That's really difficult because, like you said, it depends on how much a developer is willing to share. But, you know, there's Steam, the SteamDB thing. Steam Spy. You can find out some general analytics that way, and that's helpful. I think the big problem, though, is that every OEM doesn't want developers to stop taking risks. So if they start talking about hard numbers, there's going to be a reduced risk investment from developers, right? And they can't afford that right now because content supports platform, platform supports content, they need that sense of stability. And I think that's what everybody's scared to discuss is, is there a sense of instability? And I'm not saying that there is strictly. I think that there's so much money invested in VR right now that they're not going to let it fail. But what quality of experience are we going to have at the end of it, you know? And how are we building a healthy ecosystem together so that when it does peak in 2020 or whenever that magic date is, we have a compelling mass-adopted experience, consumer experience? So, I believe that you have to kind of, as a studio, you have to cover kind of a two-year gap, while, you know, knowing kind of what we know of all the industry players, it feels like there's a tipping point coming in 2020 because of advances in hardware, you know, there's better resolution, wireless, form factor changes, there's different players coming to market with different hardware at different times leading up to that date, and it's all leading to, you know, a better performing product at a lower price point. And that's going to translate into more sales, more adoption. So I do believe that that turn is coming. But as a studio, you have to think about small projects over the next two years. You know, 10 to 15 person teams, 800K to $1 million budgets. A million is absolutely the top end of what you can expect to get any kind of money for. And, you know, one year projects. Did I say that already?

[00:16:06.484] Kent Bye: So the original game, the Call of the Starseed that came out, that was sort of the peak of what was possible, and you did really quite well, but yet, Heart of the Emberstone was, what you say, the trough, can you give any sense of the percent, like what, any indication as to what that delta, or what that change was, and as you're moving forward, for other people to sort of get a sense of, there's some number for somebody talking about it.

[00:16:31.400] Denny Unger: Yeah, I don't know that I'm comfortable getting explicit about the number, but it did okay, but it didn't perform as well as Starseed, obviously. But again, to no fault of the studio, it's a deep market change that we saw, and our validation for that was talking to a number of top-performing VR studios, all of our peers that came up with us through Steam and everything else. Everybody's experiencing the same balance, right? So our situation is not unique at all in the market. And that's why I'm talking about these things. That's why we want to have a more broad conversation with the industry and industry partners about all of this stuff. Because not enough of that is happening. But I really do want to boil down to what studios out there who are taking a risk need to think about and fixate on, which is keep it nimble and small, focus on location-based, but have broad platform support on the home market. That's the way you're going to recoup your investment. So that's what I'd like to see. I'd also like to see... I would like to see hardware manufacturers being less precious about hardware. And what I mean by that is that, you know, I want to see headsets in McDonald's. I want to see broken manufacturer headsets in these locations, some amount of funding going into expecting breakage. I want to go into Best Buy or a big box store and put on a headset without an attendant there. I want people to have that as their entry point experience. You know, there's ample money to do this, to push it out to brands and like let it be, let it stand on its own and let people play with it and break it and do whatever they're going to do with it because the best way to tip people into buying is to let them experience VR, right? So that's why LBs, location-based amusements, arcades, are super important as we go through this curve as well. Like, I'm a kid of the 80s, so my first point of contact with gaming was going to the arcade, you know, at lunch, and playing Gauntlet, and that's how old I am. But that's where I had this need to have that system at home. And then once that was achievable, it was like the best thing ever, right? I think it's difficult for consumers to get into a high-end VR experience or have access to it for different reasons, and some of them are financial, obviously, but they still need the opportunity to experience that thing. So there needs to be another broader push to get the hardware just in the general public in ways that are sometimes free or they're curated in an arcade. That's going to help as well.

[00:19:06.243] Kent Bye: So what can you share with me in terms of your personal plan for Cloud Head Studios? I mean, you mentioned location-based entertainment and smaller number projects. What's next for you personally as you go through this couple of year gap into where you see this inflection point?

[00:19:21.949] Denny Unger: Yeah, we have kind of like a two-pronged strategy. We have, on the left side, we have these nimble small projects. We have like six different projects that are achievable in a year. They're small teams. They do all the right things. They're great for location-based, but they're also great for the home market. And on the right side, we have kind of this extended development plan for titles that fit the market. when it supports those titles. So Episode 3 is a great example of that. It's in pre-pro, but it's being aimed at the inflection point market, right? And so we're doing bridging projects to get there. And I think every studio needs to be nimble that way and needs to pivot and do that thing if they want to stay relevant in the current market.

[00:20:01.009] Kent Bye: Do you get the evidence or data to show that the location-based economy is really growing and vibrant enough to really sort of bootstrap this whole middle tier and higher tier of VR developers?

[00:20:11.565] Denny Unger: So there's two kind of answers to that. One is, you know, there's billions being poured into LBEs in Asia, obviously, but that's occurring more in North America as well. And that's all starting now. So there's a number of different entities creating arcade networks in North America. I mean, IMAX is one visible example, but there's a number of others that we've talked to. So it is a growing market with money going in, especially this year.

[00:20:34.983] Kent Bye: Especially with Ready Player One, if people don't want to invest all the money, maybe they can go have an experience.

[00:20:41.163] Denny Unger: Yeah, for sure. Exactly. But I believe, honestly, that broad platform support is still going to give you the most return. So you need to do both. You need to do both things, because I can't say LBEs are going to save the day, but I know that they're a component of saving the day. Right.

[00:20:57.284] Kent Bye: And you said there was two prongs, was that one of them or was that both?

[00:20:59.827] Denny Unger: I'm saying, you know, don't dismiss the home market because that's still your biggest market. It is still going to generate the most revenue for you, but you need to make sure you're on every platform.

[00:21:08.596] Kent Bye: I see. So do a bit of a stopgap, smaller projects. If you want to do the episode three, have the release date in 2020, but have these smaller projects that you could have quick turnaround and get it out there on all the platforms as well as in the arcades, is what it sounds like.

[00:21:20.588] Denny Unger: Yeah, it's just about remaining viable through these couple years, and making sure that we're still doing the big thing, but we're also supplementing with the little stuff, right?

[00:21:30.171] Kent Bye: That's really helpful. I mean, I think it's, I've been trying to find what that story is, and it sounds like a good viable story. And finally, what do you think is kind of the ultimate potential of virtual reality, and what am I able to enable?

[00:21:44.114] Denny Unger: Well, you probably get this question a lot, like, what's the killer app for VR, right? That comes up all the time. But there is no killer app, and I think most of us in the industry are aware of that. I think the killer app is the fight for the metaverse. Whatever giant corporation ends up winning that battle is likely to have the killer app.

[00:22:02.690] Kent Bye: Or a decentralized network. Don't forget that there's the open web. There could be both. There could actually be the competitive private one, but also an open metaverse. There could be an open metaverse with self-sovereign identity and privacy and all that.

[00:22:14.799] Denny Unger: That'd be great. Yeah, that is the killer app. It's the persistence. It's the need to pick up the headset and socialize. It's the retention product. It's the thing that replaces the way we handle social media right now. It's the thing that allows us to maybe go to work. I mean, I think, you know, Ready Player One, a lot of people give it crap because it was a pulpy kind of novel, but he's right on the money in terms of how I believe it will be utilized in the future, right? It might take longer to get to that ultimate vision.

[00:22:48.948] Kent Bye: You said 2045, which I think is reasonable.

[00:22:50.808] Denny Unger: Yeah, I guess. Yeah, that is reasonable. Okay, I take it back.

[00:22:56.670] Kent Bye: 2025 is a little early, but 2045, we got some time, so. Is there anything else that's left unsaid that you'd like to say?

[00:23:04.314] Denny Unger: I don't think so. I just, I hope everybody just stays strong and sticks with it because the market is going to turn and you just need to be really smart with your resources and how you're looking at market. Don't, don't blindly develop for a market that won't support your product, you know, because you can dream up a massive project and that's great, but it's very likely not to be supported by the current market. So think smaller, but have the grand ambition for the thing later down the road. Make sure you're, in planning or in the works for that thing, because it's really not that far away.

[00:23:37.786] Kent Bye: Awesome. Well, Denny, thank you so much for joining me today and having this candid conversation about the state of the industry and some strategies, some pragmatic strategies for people to use. Thanks for joining me here.

[00:23:48.311] Denny Unger: Thanks, Kent.

[00:23:50.291] Kent Bye: So that was Denny Unger. He's the co-founder of Cloudhead Studios and he was talking about the state of the VR industry and some strategies from how to survive as an independent game developer between now and 2020. So, I have a number of different takeaways about this interview is that, first of all, it was such a breath of fresh air to be able to talk to Denny because I had been talking to a lot of the different headset manufacturers and I didn't get a sense that I was actually getting the full story as to what was happening in the VR ecosystem. And I think there's a little bit of a disconnect between what the public relations story that's being told and the ground truth reality of what it's like to be an independent VR developer these days. And I think that it's a little bit of like feast or famine. Either you make a huge hit and you're able to really survive or there's a huge tier of developers that it's more difficult for them to really make it as an indie developer. So I think there's a couple of things that are going on here. One of the things is that there is this Gartner hype cycle where you go through these different phases of like the peak of inflated expectations. That's the peak of the hype cycle. And I think that VR has actually gone through multiple hype cycles over many different generations. You can trace the hype cycle back to like 1968 when VR first started and then in the 90s was another hype cycle. This is almost kind of like the second or third big hype cycle in VR and I think that what Danny is reporting is that from the release of the Vive and his first VR title, which was a launch title, they had a certain amount of like success with that title. And if there's any developer that's out there, it would be Cloudhead Studios to be able to see how many headsets were even out there. And so when he released the second episode, there was a lot less response to that. And so there's a couple of different factors. One is that the active attachment rate of how many people are actually picking up the VR headsets and using them day to day is low. Just from my own direct experience, there are some experiences that I can do every day, but I think on the whole, most VR enthusiasts may not even play every day. I think it's a small percentage of people who do that. And there's been a lot of people who have been curious about it, but maybe haven't found the content that's out there that is really engaging them. So I think that there's a couple of things going on here. One is that there's a bit of a challenge of matching the content that you're creating with the temperament of what you're going to like. And I think most of the VR content that's been out there up to this point has been very focused on active shooters, first-person exploration. There's been a lot of translation from what existing titles work really well in a 2D platform and then porting them out into VR. Then there's an entirely new range of embodied experiences that, when I went to GDC this year, that was the major takeaway, was the future of gameplay and virtual reality is going to be completely embodied. And it was really stark to see the difference between what was happening in Valve's booth and adding trackers and more and more higher fidelity of getting more of your body into the experience versus the approach of Oculus, which most of their experiences that they were showing were on the Oculus Go, which is actually going the exact opposite direction of embodiment. I think in some ways Oculus and Facebook are trying to like go for mass scale without really understanding the magic of what makes a compelling VR experience. And so I got to play like Settlers of Catan, which is literally just a board game of being able to point at objects. And that was kind of the extent of some of the latest cutting edge VR demos that Oculus was showing was kind of like stuff that really could have been made two or three years ago. Whereas at Valve's booth with HTC trackers and everything else, I was seeing stuff that, you know, was just completely blowing my mind. I saw a soccer demo where I had like four trackers on my foot and I was able to actually like kick a soccer ball in a way that felt completely real. And they're using that to train elite athletes. And Beat Saber is an amazing game and you totally get your body into the experience. And Creed is another boxing game and Electro Knots, you know, a lot of the big experiences that I saw in the Valve booth were all about embodiment. And I think that there's a certain amount of the creative direction of what content is being funded by Oculus. It's kind of like by these AAA game studios who are taking people who have never created VR experiences before, they're giving them a crap ton of money, and they're producing stuff that's totally uninspired, not original, and kind of boring. So the argument that Danny was making is that, hey, you know, actually, in order to cultivate a viable ecosystem here, you have to support the middle tier developers and not just give huge amounts of money to these AAA developers and have them learn how to do VR development, but create these experiences that aren't actually using the real affordances of virtual reality. And I think that Denny from Cloudhead Studios feels like he's been kind of left in the dust from these existing funding mechanisms but also the mainstream press ecosystem when it comes to the mainstream games journalism press where there hasn't been a lot of clicks on these journalism articles and so they've kind of turned to doing these clickbait articles declaring that BR is dead and that the The medium's going nowhere. And I think that, first of all, that's kind of ridiculous in the sense to just declare an entire medium dead because of all of the history of technology, there's never been a new communications medium that's been introduced and then just has gone away. Once it's been introduced, it's not going to go away. The question is, at what point is it going to latch on and cross in the chasm into the mainstream? And so that's the biggest question. Is it going to be like by 2020? Is it going to be 2025? Or is it going to be 2045? I think each one of those goalposts, either it's going to be a couple of years, it's going to be like eight to nine years, or it's going to be another 25 years before we get to the Ready Player One era that's being depicted in the film that's coming out this week, showing the full manifestation of virtual reality. So my sense is that it's going to happen by 2025 and that it's going to be a little bit of like a stopgap through location-based entertainment. So, having a lot of money that's being invested in putting up all these different locations around the United States, and as people go to those, they'll have a direct experience. They won't have to invest all the money in order to have the experience. They'll be able to pay money to have the experience that they can only have at this location-based entertainment, and then eventually maybe that will inspire them to try out virtual reality. The other thing that's happening is that you have these headsets that are standalone, and At start, though, they're going to have three degree of freedom. And so they're going to have very reduced agency. And I have a question as to how much those platforms are going to take off. I think once you get the six degree of freedom and the room scale experiences both together, I think the Santa Cruz is the best example that I've seen of that. I don't know what the release date is, but I project it's going to be likely sometime in 2019. And the Vive Focus, even though it has a six degree of freedom, it only has a three degree of freedom hand track controller. Whether it's the Oculus Go or the Vive Focus, both of those technology platforms are not really pushing at what is the bleeding edge. And so in order to get access to that bleeding edge, you're going to have to go and have an experience of location-based entertainment. So the other thing that I would just say is that there is a games journalism and all that ecosystem, but with social media kind of going through this reboot right now, I think that virtual reality, live streaming, there's going to be a little bit of like going back to the basics of like having these direct one-on-one conversations with people. And I think the whole advertising ecosystem is just being kind of shook up right now, especially if people start to really adopt this rejection of the social media like Facebook because of all of their practices of gathering up as much data as they can. I think that people are finding that they may actually be happier without social media. So I expect that. there's going to be a continuation of people getting away from social media and going towards either live streaming or direct engagement with either face-to-face interactions or social VR interactions or live conversations on Discord servers and playing games and stuff like that. So in that context, what that means is that as an independent developer, that means that you have to really find new ways of engaging audiences and building that audience and cultivating that audience. And it's going to be a little bit less relying upon these major mainstream publications to be the windfall of getting the word out about your experience. So it's going to be more of a question of how do you as an individual cultivate your fan base. And whether you do that on your own or you start to turn towards independent publishers who have started to do a lot of that legwork already. So overall, I'm still completely convinced of the power of virtual reality and that I think part of the challenge, though, is that trying to find the unique affordances of VR, of what makes the medium really compelling and finding ways to be able to match someone's temperament with the different types of experiences that are out there. And I think that has been also part of the challenge is that maybe some of the experiences that have been really heavily promoted and out there, if you try them, if you're not really into that type of experience, there may be other types of either cinematic VR or embodied VR or puzzles in VR or like active shooters or exploration. I think there's a wide range of different types of either experiences and stories that are told in virtual reality. And I think the challenge moving forward is to understand yourself enough to know what your temperamental balance is and then to be able to match what type of experience you're going to end up liking. And I am completely still all in in virtual reality. I am convinced that it's only a matter of time before this medium reaches the mainstream. But for independent developers who are out there, I think there's a little bit of just being creative with your strategy of seeing where the market is going in terms of this location-based entertainment. What are these shorter experiences that you can have smaller teams that give a compelling experience that really show to the affordances of VR so that at some point once it turns the corner and everybody having like high-end VR or at least a full spectrum of different platforms, like how can you create an experience that's able to go across all those different platforms? There is a little bit of fragmentation that's happening with all of these new standalone devices with three degree of freedom and then adding up six degree of freedom. It actually is really difficult to create a unified experience across all those different platforms that are really playing into the unique affordances of each. And so it's kind of like picking your platforms that you're going to design for, and then just trying to hit as many of them as you can until at some point we move into this crossing the chasm where it's just way more available and you're able to make it as an independent developer. So that's all that I have for today, and I just wanted to thank you for listening to the Voices of VR podcast. And if you enjoy the podcast, then please do spread the word to your friends and consider becoming a member to the Patreon. This is a listener-supported podcast, and so I do rely upon your donations in order to continue to bring you this coverage. So you can donate today at patreon.com slash Voices of VR. Thanks for listening.

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