rct studio
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.
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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About the Companies
Artie is a platform for next-gen interactive content that is hyper-personalized, exponentially engaging, and can be shared and played instantly inside of popular apps like Instagram, Facebook, Snapchat, Twitter, YouTube, and Twitch, with no app download or integration needed. Our team includes AI scientists, engineers, and interactive storytellers from Activision/Blizzard, Infinity Ward, Disney, DreamWorks Animation, Snap, Mozilla, and Facebook. Our seed investors include Scooter Braun's Raised in Space, Jeffrey Katzenberg's WndrCo, Founders Fund, Warner Music Group, Shrug Capital, YouTube co-founder Chad Hurley, angel investor Cyan Bannister, and top executives from Twitter, Amazon, and Square.
rct studio is a next-generation creative studio and interactive entertainment company, harnessing the latest in Artificial Intelligence to offer truly immersive VR experiences. Powered by the company's Morpheus engine, the technology instantly mines millions of data points from a vast repository of storylines and human behaviors to create realistic stories with an almost infinite amount of endings. With the ability to slash production costs and development time, whilst unleashing boundless creativity, rct is revolutionizing the way people tell and consume stories.
Squab Gaming is a marketplace for video game players to hire on-demand gaming partner in 3 clicks. Gamers can easily find their perfect teammates at anytime. Squab Gaming also provides expert players an opportunity to make money from the games they are good at. Squab Gaming essentially fills the gap in the current esports ecosystem and makes it more sustainable.
About the Judges
Gregory Milken
Gregory Milken is a Managing Director at March Capital Partners, where he focuses on investments in gaming. Gregory has led March Capital's investments in broadcasting solution Genvid Technologies, esports organization Immortals Gaming Club and game developers Nifty Games, Dorian and Knock Knock.
Prior to March, Gregory was an active angel investor for companies such as Viagogo and Small Giant Games. Gregory has over 15 years of entrepreneurial and operational experience. He was the co-founder and COO of AltEgo, a cloud-based technology and gaming company. Prior to his work in technology, he worked in strategy and operations for Knowledge Universe Education, new business development at Warner Bros. in Hong Kong and London, and at Twentieth Century Fox.
Actively involved in philanthropy, Gregory currently serves on the Board of Overseers for Penn's Graduate School of Education as well as on the boards of the Milken Institute and the Milken Family Foundation.
Gregory received his M.B.A. and M.A. in International Policy Studies from Stanford University, as well as a B.A. in Asian Studies and a B.A. in International Relations from the University of Pennsylvania.
Peter Y. Levin
Peter serves as Managing Director at Griffin Gaming Partners, an early and late stage investment vehicle singularly focused on the video game sector.
Prior to Griffin, Levin served as President of Interactive Ventures, Games & Digital Strategy at Lionsgate.
He is the former CEO & Co-founder of Nerdist Industries, a multi-platform creator of genre and popular-culture content, as well as the former Co-President of Digital Strategy at Legendary Entertainment.
Nerdist Industries was acquired by Legendary Entertainment in July of 2012. Levin serves as Chairman of Immortals Gaming Club and serves on the Board of Directors of N3TWORK, Wizard Labs and Next Games. He also serves on the Los Angeles Sports & Entertainment Commission Board of Directors.
Previously, Levin was founder and co-owner of the 2006 World Champion Chicago Rush of the Arena Football League. He was also a minority partner in and strategic advisor to Strikeforce, a mixed martial arts promotional entity, that sold to the Ultimate Fighting Championship in 2011. In June 2009, Levin served as the exclusive representative of Deadline.com in its sale to PMC. Levin is the founder of Course of the Force, an annual Olympic torch-style lightsaber relay in partnership with Lucasfilm Ltd. that led up to San Diego Comic Con International and benefitted the Make-A-Wish Foundation.
He also serves on the Board of Governors at Cedars Sinai in Los Angeles and co-teaches a competitive gaming course at the USC Annenberg School of Communication and Journalism.
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