The Virtual Arena: LBE VR Gets The Microsoft Treatment (Part 1)

Kevin Williams reports from San Francisco as Microsoft prepares to make an enterance into the Location-Based Entertainment sector.

Major developments rock the Digital Out-of-Home Entertainment (DOE) scene as Microsoft and its partners move towards entering the Location-Based Entertainment (LBE) sector. In a momentous business gathering of industry leaders in California; new developments, initiatives, and some revealing observations on the scope of the commercial entertainment scene are reported in a two-part feature by Kevin Williams for VRFocus.

The Virtual ArenaThe first Microsoft LBE Summit was held in San Francisco during the beginning of August – highly selective two-day gathering saw some 200 leading representatives from the LBE, virtual reality (VR) arcade and entertainment sector. The summit held at the Reactor facility in the heart of the city and organised by Microsoft Mixed Reality group.

The Microsoft Reactor facility
The Microsoft Reactor facility. (Credit: KWP)
Microsoft LBE Summit 2018: A strong turnout for the first ever LBE Summit, seeing leading executives across the sector
A strong turnout for the first ever LBE Summit, seeing leading executives across the sector. (Credit: KWP.)

The event kicked off with a welcome from Microsoft Mixed Reality’s Business Developer – the gathering acting as a melting pot to both share information, but also help Microsoft promote their Windows Mixed Reality (MR) environment as an Enterprise platform for this emerging market. Microsoft using the term Location Based Entertainment as an all-encompassing term to include the explosion in interest in DOE (ranging from the pop-up VR promotional booths, independent VR arcades, free-roaming venues, VR and augmented reality (AR) attractions and much, much more).

The scene was set at the summit on why Microsoft felt the time was perfect for the adoption of LBE. Microsoft using one particular chart to indicate the decline of US arcade revenue since 1993, against the explosion in US videogame revenue; while looking at the opportunity in a resurgence in interest in venue-based pay-to-play, as being witnessed in the explosion in interest in DOE VR entertainment, while consumer VR adoption is said to falter.

Microsoft LBE Summit 2018: Brandon Bray of Microsoft, using serval charts to define the revenue opportunity for LBE
Brandon Bray of Microsoft, using serval charts to define the revenue opportunity for LBE. (Credit: KWP)

The investment placed in Windows MR was highlighted and how their “Intelligent Edge” initiative included commercial usage of their MR technology across VR and AR, and even had a place in drones, smart phones and even an updated version of the Kinect for Enterprise deployment. The Microsoft Mixed Reality initiative covering sectors such as Retail, Manufacturing, Healthcare, Education, Engineering, Public Sector and to beginning with Entertainment. The explosion in interest in the (commercial) DOE sector driving investment, that was represented by this summit.

The LBE Summit was run by Microsoft Mixed Reality group but was undertaken in partnership with HP, Samsung and other companies working closely on the LBE initiative in bringing all these voices together – Microsoft using this gathering not only to promote their aspirations in the sector, but also to research and evolve their offering, feeding off interaction with the leading exponents in the field at the summit.

The application of MR technology into commercial entertainment was illustrated in the first presentation, with observations on what it took to create the 2016 Destination: Mars experience that was deployed for a period at Kennedy Space Center. Developed in partnership with NASA and JPL; creating a Hololens based experience that placed the audience on the surface of the red planet. An early taste of the opportunity for their MR platform in an DOE setting.

Destination Mars
Apollo 11 astronaut Buzz Aldrin, trying out the Microsoft Hololens headset during a preview of ‘Destination: Mars’ at Kennedy Space Center in 2016. (Credit: NASA/Charles Babir)

The summit presentations went on to supply case studies from the VR arcade scene – first from SpringboardVR, the company supporting some 300 locations dependent on their management architecture to allow VR arcade operators to managing bookings, operate VR experiences, and monetise correctly the usage of videogame content.

SpringboardVR revealed that the end of the year they will be launching their own commercial software content portal, replacing the need to use Steam, and instead using their own content distribution system. The company is positive about the VR arcade scene calculating that 65% of the locations their support is either breaking even or doing better than that.

Microsoft LBE Summit 2018: Brad Scoggin of SpringboardVR revealing a strong sector seeing 40-50 new openings per month
Brad Scoggin of SpringboardVR revealing a strong sector seeing 40-50 new openings per month (Credit: KWP)

Following that, Suvios presented their case; the well-known VR videogame developer (known for VR titles such as Raw Data) discussed their entry into Out-of-Home entertainment having opened the first of their VR arcade franchises, alongside developing several games that have been equipped for VR arcade adaptation.

It has been a hard learning experience for Survios regarding working out what the market requires with regards VR arcades, but they feel they have learned valuable lessonsthrough both opening their own arcade and their global network of arcade distribution partners, and have seen a healthy 40% repeat visitation from their audience.

 

Michael Festa of Survios championing the move by the developer into the LBE business
Michael Festa of Survios championing the move by the developer into the LBE business. (Credit: KWP)

A major part of the summit was the panel sessions, where leading providers passed on their experience so far in the adoption of this new environment. One of the first was to discuss developing high-end LBE experiences. The organisers inviting leading executives from Hyperspace XR, The VOID, Zero Latency and Nomadic to give their views on the key issues impacting their sector.

Hyperspace XR’s Jeff Ludwyck, Zero Latency’s Tim Ruse, Nomadic’s Doug Griffin and The VOID’s Sarah Marsh, moderated by Microsoft’s Alykhan Jivraj
Hyperspace XR’s Jeff Ludwyck, Zero Latency’s Tim Ruse, Nomadic’s Doug Griffin and The VOID’s Sarah Marsh, moderated by Microsoft’s Alykhan Jivraj. (Credit: KWP)

The VOID confirming an ambitious roll out plan, building on their original work with their Ghostbusters experience, and their current Star Wars VR adventure – the corporation revealing their schedule for The VOID “Hyper-Reality” facilities internationally. While new developments from Nomadic and Hyperspace XR were confirmed to already be in the works and soon to be opened.

The Australian-based company Zero Latency revealed they have seen some 500,000 guests across their 19 operations, since opening. One of the earliest developers of High-end free-roaming VR experiences (what the company has called “Warehouse-scale”), they look upon the Windows MR initiative as a strong opportunity for their platform, already using the cloud-based elements of the system for their Customer Relationship Management (CRM) side of the business

Zero Latency also came to the LBE Summit with plans for major redevelopment of their offering – part of this has been encouraged by restructuring at their headset provider OSVR, which recently saw the impact on their business with the closure of their partner Sensics – Zero Latency preparing to announce their new platform.

The next part of the LBE Summit saw reflections on the differences in the Asian market toward LBE development with a panel session comprising leaders in the field, SoREAL, Jaunt China, Digital Domain and SPACES. While the Asian VR park scene has seen great growth, there has been some turbulent changes in the territory and the new investment in the Asian market is for more compelling high-end VR experiences including free-roaming (Arena-Scale) attractions.

Microsoft LBE Summit 2018: Microsoft moderator Nancy Li, with Sam Wang from SoREAL, Jaunt China’s James Fong, Digital Domain’s John Canning and SPACES Anthony Jacobson
Microsoft moderator Nancy Li, with Sam Wang from SoREAL, Jaunt China’s James Fong, Digital Domain’s John Canning and SPACES Anthony Jacobson. (Credit: KWP)

The next panel sessions comprised venture capital investors working with new operations in the LBE VR venues and developers, speakers included Super Ventures, Comcast Ventures, Anorak Ventures and The Venture Reality Fund. It was revealed that most new investment opportunities crossing these VC’s desks represented start-up’s in the Out-of-Home entertainment sector, and that this market was offering a very interesting opportunity while the consumer VR scene seemed to soften.

This concludes the first part of our report from the Microsoft LBE Summit, we will complete this coverage in the coming report, looking at the final panels and several advance technology demonstrations that were presented to the audience of industry leaders.

Watch this space for the next part, coming later this week to VRFocus.

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