Column: L.A.'s Video Game Industry Becomes a Safe Haven in Times of Uncertainty

Xinjie Ma
Xinjie Ma is a co-founder of rct studio, a next-generation interactive entertainment company harnessing the latest in AI to offer immersive VR experiences. She jointly founded rct studio with other former members of the Raven Tech team, which was acquired by Baidu in 2017. While at Baidu, Ma headed marketing for the company’s hardware division. Specifically, she assisted with bringing Baidu’s smart speaker to market and achieving best-seller status. Prior to her role at Raven Tech, she served as a brand designer at Studio Output, a digital-first design agency in London. Ms. Ma holds a Bachelor's degree from the University of Arts London. For her work designing consumer technology user interfaces and marketing, she was recognized among the 2020 Forbes 30 Under 30 for both Asia and China.
Column: L.A.'s Video Game Industry Becomes a Safe Haven in Times of Uncertainty

It's hard to believe that residents across vast areas of the U.S. are about to enter their third month of quarantine as a result of COVID-19. With millions of businesses forced into complete shutdown during these unprecedented times, there have been few, if any, positive outlooks for any industry.

But hidden amongst dispirited stories across hospitality, real estate, retail and many other markets, there are glimmers of hope for industries that this crisis may actually be a catalyst for. Gaming is undoubtedly one of the markets seeing an uplift during the pandemic.

Xinjie Ma is a co-founder of rct studio.

According to Verizon, video game internet traffic is up 75%, while 95% of the country shelters at home. Meanwhile, Activision Blizzard, one of the gaming industry's largest holding companies, has seen its stock go up around 10% so far in 2020, while the S&P 500 has dropped around 15%.

Well over half of Americans are gamers and during this crisis, which is taking as much of a mental toll as a physical one, there is no better medium for escaping our current reality. However, the amount of time on consumers' hands is increasing their desire for experiences that extend beyond the status quo.

A rct studio survey of 1,000 U.S. consumers found that right around 1-in-3 people are bored of the same entertainment options during the quarantine and are searching out new virtual experiences as they shelter at home. In this sense, gaming will likely be the gateway during this crisis to new VR experiences. In doing so, it may finally bring VR mainstream. Here's three reasons why I think that will happen.

Today's Needs Are Immersing Consumers in VR for the First Time

While the percentage of VR gamers continues to only hover in single-digit percentages, the crisis has shifted the use of VR technology from a nice-to-try to a need-to-have. Can't access your favorite gym? No worries, you can access a better workout with your Oculus Quest.

With movie theatres shuttered, theme parks closed and concert halls muted, it turns out VR is one of the few technologies that can keep the entertainment industry relevant in these trying times. Our own research shows that the use of AR and VR is up 49% during the pandemic. Additionally, the latest Steam data shows over one million active VR users in March alone.

Through their headsets, consumers can embark on exhilarating journeys that may not even be possible in post-COVID-19 times. Whether it's taking in the sites at Machu Picchu or diving into the action-packed survival horror game Half-Life, the relief experienced through VR right now from societal anxieties is enormous.

And for developers of VR headsets, supply is buckling under this unprecedented demand. Devices like the Oculus Quest — which retails between $399.99 and $499.99 — have become virtually impossible to buy without paying a huge markup. These prices will likely continue to rise the further the quarantine is extended and consumers' appetite for novel forms of entertainment grows.

If interacting with our physical communities continues to be a challenge as we respond to COVID-19, we shouldn't expect any of these VR gaming needs or demands to dwindle. More than 7 in 10 online gamers in the UK and U.S. have noted they feel part of a gaming community. Never has this community been as critical as consumers seek out some connection amid lockdown and separation.

New virtual landscapes will offer even more opportunities for connection that feels human. Next-generation VR environments are already being built with new ways for players to communicate and collectively alter storylines in real-time while they explore virtual worlds.

Technology is Finally Here to Build Lifelike Environments At Scale

The VR industry has already had numerous false starts. Many of these problems can be singularly traced back to not combining proper hardware with engaging content. Getting one right has proved difficult, succeeding with both has been impossible. Furthermore, the promise of immersive VR experiences is limitless choice and opportunity. A new world to escape within.

The problem with the first few generations of VR has been the restraints caused by the sloppy intersection of hardware and software. In a VR environment not too long ago, I walked into a wooden cabin during a summer afternoon in Austria. On the surface, the situation existed. However, if you stared at anything in the cabin for more than 10 seconds, you would start to feel its loss of reality. Not so different than slowly shaking out of a dream. Everything in the room, even the room itself, was modeled in such an inadequate way. The only way to accept the experience as reality was to believe that our world is now only seen in 960X1080.

Fortunately, we're at a point where artificial intelligence advancements can address these issues. Deep and reinforcement learning can lessen the budgets and lengthy timeframes needed for developing vast virtual environments, while also solving limitations of pre-mapped narrative paths that existed in first-generation VR. We can even render these environments in real-time without needing to rewrite any code. Just a few lines of text will do.

While gaming and VR companies have utilized AI in the past to improve gaming, we're just getting to a point where we can train machine learning models to make a sequence of decisions that result in narrative-driven AI. Imagine a not-too-distant VR world where there is no need to script every alternative for each scene in advance. Once the main storylines, character descriptions, motivations, and parameters are mapped, AI can create a seemingly endless number of experiences. And unlike the gaming environments today, every non-player character is powered by its own AI model. VR players can essentially enter into their own Westworld.

Microsoft has been gaining ground with Hololens and AR for the business

FAANG Shows An Increasing Appetite for VR & AR

As they do in almost all aspects of the technology sector, Facebook, Amazon, Apple, Netflix and Google have veto power when it comes to allowing VR to go mainstream given their chokehold on distribution. For much of the past decade, Apple and Google have been resistant to adopting usages of this technology.

Meanwhile Facebook and Microsoft, if we add the sixth biggest player in technology into the mix, have shown the most interest in becoming leaders in the fledgling market. Facebook, of course, is through its efforts with Oculus. Microsoft, on the other hand, has made the most ground with Hololens and AR for the business world.

However, the two perceived leaders in big tech are beginning to see company in VR and that is likely to increase as the crisis spotlights consumer desire for VR experiences. In April, amidst the growing pandemic, Apple has been rumored to be finalizing a deal to acquire NextVR, a virtual-reality video-streaming service for around $100M. Prior to that, details leaked in March, of a controller for an AR/VR headset that Apple may have in the works.

Netflix, the global leader in streaming content into the homes of Americans, has also started to pick up its interest in VR. Its app on the Oculus store, which allows Netflix users to watch certain content in VR. Likewise, Amazon has made VR content available for its Prime Video users with apps available for Oculus and Samsung's Gear VR.

So while Facebook has been carrying the baton for VR over the last few years it has begun to wake up the rest of the major players to virtual possibilities. While the current market downturn may force some of these companies to refocus on core businesses for the short-term, there's little doubt that these leaders also see the opportunity for VR in the new normal that awaits us on the other side of the crisis. If they all jump in the water, the VR floodgates will open.

Xinjie Ma is a co-founder of rct studio, a next-generation interactive entertainment company harnessing the latest in AI to offer immersive VR experiences. She jointly founded rct studio with other former members of the Raven Tech team, which was acquired by Baidu in 2017.

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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Inflation Reduction Act Officially Passes the Senate, Revamping Electric Vehicle Pricing

David Shultz

David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.

The Capitol at Sunset
Courtesy of Mike Stoll via Unsplash

Over the weekend Senate Democrats officially passed the Inflation Reduction Act in what amounts to President Biden’s biggest legislative win so far. The bill includes a host of broad-spectrum economic policy changes and completely reworks the subsidies for electric vehicle purchases. The law still has to get through the House, but this should be a much smaller hurdle.

dot.LA covered the bill in depth as it neared the goal line at the end of July, and the final iteration doesn’t change much. To recap:

1. The rebate total stays $7,500 but is broken into two $3,750 chunks tied to how much of the car and its battery are made in the US.

2. The manufacturer caps are eliminated, meaning even EV companies that have sold more than 20,000 vehicles are once again eligible.

3. Rebates will now only apply to cars priced below $55,000 and trucks/SUVs below $80,000

With the new system placing a renewed emphasis on American manufacturing and assembly, the calculus of which vehicles cost how much is still being worked out. The most comprehensive (but unofficial!) list I’ve seen has come from Reddit user u/Mad691.

In addition to the EV rebate program, the bill also includes a number of economic incentives aimed at curbing emissions and accelerating the country’s transition to electric vehicles.

There’s $20 billion earmarked for the construction of new clean vehicle manufacturing facilities and $3 billion will go help electrify the USPS delivery fleet. Another $3 billion will go to electrifying the nation’s ports. Then there’s $1 billion for zero-emission trucks and buses.

Now that the bill is about to be codified into law, VC investment in the sector might heat up in response to the new money flowing in.

“I do anticipate more climate funds standing up to invest in EV infrastructure,” says Taj Ahmad Eldridge, a partner at Include Ventures and the director at CREST an ARES Foundation initiative with JFF/WRI that aims to provide training for people in the new green economy. “However, we do see funds being a little more thoughtful on diligence and taking their time to fund the right investment.”

The sentiment seems to be shared across Southern California. ChargeNet CEO and Co-Founder Tosh Dutt says the Inflation Reduction Act “super charges” the company’s effort to build infrastructure across the country.

“This investment accelerates the transition to renewable energy and gives companies like ChargeNet Stations the confidence to expand more rapidly, especially in underserved communities,” says Dutt.

For Rivian, the bill’s passage has left would-be customers in a sort of limbo. Because many of their models will exceed the $80,000 cap for trucks and SUVs after options, customers who’ve preordered are scrambling to sign buyers’ agreements to take advantage of the current EV rebate scheme which doesn’t include price caps. As I noted in the previous article, if you buy an EV before the bill is signed, you’re eligible for the current rebate system even if the vehicle isn’t delivered until 2023. Any existing contracts under the current system will remain valid.

With the legislation seemingly on the fast track to become law, it’s unclear whether or not Rivian will expedite the purchasing process to allow customers to sign the buyers’ agreement before the new rebate program becomes the law of the land. Tick tock!