Real Innovation, Virtual Reality

Chris Schwalbach  ·  December 19, 2016  ·  6.7 min

Owlchemy labs—a leading name in VR game development—successfully completed a $5 million Series A round in August with the bulk of that money coming from Qualcomm, HTC, the VR Fund, and other major players in the arena of VR technology. It’s no surprise Owlchemy’s gotten so much attention; VR itself is poised to be a $30 billion industry by 2020, and they’ve already made a name for themselves, producing launch titles for the HTC Vive hardware and collaborating with Adult Swim to produce a companion game to the beloved animated series Rick and Morty.

Why such growth?

Two reasons (mostly). First, studies show interest in VR is massive; a poll of 1,200 individuals conducted by Greenlight VR reveals that between 60% and 70% of people are “highly interested” in VR tech.  Google’s ‘Cardboard’ app, an inexpensive way to experience VR through your cell phone, has been downloaded over 10 million times. Second, VR has practical utility that goes far beyond gaming; the top use categories highlighted by poll respondents were: travel, movies, home design, and education/training.

To this last point, the military was one of the most recent adapters of VR for training applications. The healthcare industry quickly followed suit with their HumanSim software, a VR program that simulates a hospital room and presents trainees with different patient health emergencies, reading their reaction times and providing valuable feedback. Flight simulators, perhaps the oldest and most common form of VR training, have long been embraced by aviators and pilots. It’s these government and commercial uses that have helped foster VR’s early development, and offer much growth potential over the next few decades.

But despite the market enthusiasm for VR technology, developers face major obstacles. Rapid changes – fueled by intense competition to innovate and tackle problems – are commonplace in all industries, but magnified in the realm of VR due to the fundamental issues developers are still working through.

Take movement, for example. VR has nearly perfected the sights and sounds of a virtual world. Put on a headset, look around, and your view will change accordingly. But take a step forward and you’ll quickly learn that you are limited by the size of your room and the lengths of the cords connecting your headset to the computer. Unless you’re in a room that perfectly matches the digital game environment, you’ll have all kinds of unpleasant experiences like running into walls and tripping over coffee tables. And more importantly, the VR device won’t know you’re moving without some sort of tracking system, none of which work as well as developers—and consumers—would like.

Interacting with the digital world is another problem. Essentially all VR companies have produced hardware for your hands; paddle-like “controllers” that allow a modicum of interaction with VR. These are big, clunky, and unnatural-feeling, taking the user out of the virtual experience. These peripherals are likely prone to many refinements and changes over the next few years.

Cost is another issue for VR developers like Owlchemy. The average consumer remains “priced out” of the VR market, since the major systems require a PC with high-end graphics capabilities, which can run over $1,000 not including the cost of the VR device itself or any games. Early adopters of the technology are, for the most part, part of the hardcore-gamer crowd for which VR is an easy sell. But what of the average person? They may be interested in the technology, but it’s not yet known where non-gamers will draw the budgetary line.

So, what does a company like Owlchemy Labs do in a field where the future is both promising and uncertain?

Owlchemy’s answer is a blueprint for all startups in similarly unique and unprecedented fields: develop quality content that fits into the ecosystem as it exists now, while still innovating and staying ahead of major developments.

Take Owlchemy’s Job Simulator game, for example, which offers an ingenious workaround to VR’s movement problem. Instead of walking around, players “teleport” themselves to a new spot where they can perform tasks and actions using only their arms. In this way, a player can feel like they are moving through space when, in reality, it is the virtual world that moves around them. Most hardware utilizes gyroscopes in the VR headset to calculate height, allowing a player to duck or kneel in the digital world, and Job Simulator has integrated this too, offering a degree of free, though restricted, movement.

Another AVL Client, Occipital, is wrestling with the same limitations in VR movement, albeit with a completely different solution. This month Occipital announced Bridge, a wearable VR headset that works with your iPhone. Mobile VR has existed for some time, but Bridge offers “inside-out positional tracking”, or, in plain English, the ability to see physical objects in the real world as you move through the virtual one. No more worrying about running into that coffee table – Bridge will give you a handy outline of physical objects when you get too close.

How? By using your existing cell phone GPS positioning capability, Bridge is able to measure your actual movement through space and map it to a 3D environment. No need for expensive camera peripherals that only cover a fixed physical space; Bridge knows when you move in any direction, no matter where you are, thanks to satellite positioning. And using the lens of your cell phone camera, Bridge can detect physical objects in the real world. For now, these 3D environments are constrained in size and scope by the average cell phone’s storage space and processing power, but Bridge is an ingenious and promising solution to a classic VR problem.

Owlchemy too is developing technology that might simultaneously improve VR’s movement and interaction problems. According to a company blog post, “our work in VR has led us to understand that direct interaction with virtual worlds using your real hands will not only define what makes VR great, but will shape all content to come.” Easier said than done, no doubt, but Owlchemy will continue to develop and refine their camera motion tracking systems to map physical movements to the digital world and eliminate the need for big, clunky paddle controllers. This technology is sophisticated and new, and Owlchemy is just one of the pioneers on a rapidly changing new frontier.

For companies like Owlchemy and other manufacturers of more traditional VR games—that is, games that need all the under-the-hood horsepower of a high-end PC—the pricing problem doesn’t have an easy solution. To this day, VR hardware companies like Oculus and HTC are still pumping their own money into development because the ecosystem isn’t yet self-sustaining. Data shows, however, both the usefulness of VR training applications and the excitement around the technology for everything from movie-viewing to education. This, so far, has been more than enough to convince investors to fuel these still-young technologies.

It’s clear that the future of VR includes a marriage of fully realized, graphically beautiful virtual worlds (like those created by Owlchemy), and the unrestricted, virtual-to-real movement offered by Occipital’s Bridge technology. How this marriage will work is unclear, but there’s no doubt that an integration of these systems would create a fully immersive VR experience a cut above the current systems.

The applications for VR are many, the implications huge. Virtual reality isn’t perfect yet; one can’t explore digital worlds as big and wondrous as the real one around us. But this isn’t far off, and plenty of evidence exists that VR provides a ton of value across industries.

And don’t forget, it’s quite fun.

If you like watching great companies in a growing field with a huge amount of potential and application to our everyday jobs and lives, Owlchemy Labs and Occipital are great organizations to keep your eyes on. The virtual world is growing by the day, with capabilities that couldn’t have been imagined even a decade ago.

By Sean Conte
AVL Growth Partners, 2016