The ninth annual GamesBeat conference, which began with a special one-day pre-conference dedicated to exploring augmented reality and virtual reality applications in cross-platform games, centered around catching Pokémons and riding the AR/VR trend. Industry speakers from venture capitalists to platform providers and game developers shared insights about AR/VR gaming, as well as their visions for the future. A few key takeaways:
Monetization Strategy
Virtual reality is still in its early stage, but a few monetization patterns are emerging. According to Mihir Shah, CEO of mobile VR ad network Immersv, add-on purchase and premium subscriptions are two of the most common ways to earn money from VR content. According to Shah, ad rates within VR apps range from $0.03 to $0.10 per view. Guy Bendov, CEO of mobile VR publisher Sidekick VR, maintained that one of the best monetization strategies is to secure sponsorship from brands and media. Julie Uhrman, head of partnerships and distribution at VR video production company Jaunt, agreed, pointing out that, “Ad agencies and brands are really excited about VR and want to be associated with it, in part because VR creation pushes the envelope from a storytelling perspective.”
The Fight Among Platforms
HTC Vive | Credit: wikipedia
Intelligence company SuperData Research has predicted that VR will become a $22.8 billion industry by 2019. While Oculus Rift and HTC Vive have staked out primary market positions in VR manufacturing, Sony is expected to make significant inroads with the launch of its widely hyped PlayStation VR in October. According to Google Play’s Strategic Lead for Games, Jamil Moledina, Google is also launching a new VR device called Daydream, a higher quality VR platform than Google Cardboard. In addition, Richard Marks, PlayStation VR’s senior researcher, revealed that Sony is developing “The Playroom VR,” a multiplayer game that allows several users to interact in a virtual reality setting.
Venture Capital Closes In
It’s clear that AR and VR are generating intense interest in the venture capital community, which is not only investing in individual companies but creating new funds exclusively focused on the the industry. Venture Realty Fund, for instance, is a new $50-million fund set up by gaming veterans Tipatat Chennavasin and Marco DeMiroz, former chief executive of PlayFirst, to invest exclusively in early stage AR/VR startups. In an interview with Newscenter.io, DeMiroz said his fund has made multiple investments in the VR space, and he expressed optimism about the number of compelling early-stage VR companies he is currently seeing. HTC, the Asian smartphone manufacturer that is also the creator of VR headset Vive, co-founded Presence Capital, a $10-million fund for investing in seed-stage VR startups. The most extreme example of the VC appetite for VR is the Virtual Reality Venture Capital Alliance, a $10-billion fund whose partners include such leading venture firms as Sequoia Capital, Matrix Partners, and 500 Startups.
Call for Creators
According to Phil Sanderson, managing director of IDG Ventures, 16 percent of game developers are currently developing for VR. The recent success of AR games like Pokémon GO has generated additional impetus to create the next big thing.
Google’s Moledina emphasized that creative new approaches to VR are critical: The new platforms, he said, are “not looking for existing games with a VR wrapper.” He expressed the hope that Daydream will spawn “games that transcend what came before,” in the same way that the film Citizen Kane raised the bar for later filmmakers. Moledina’s desire for developer creativity was echoed by Peter Levin, president of interactive ventures and games at Lionsgate, the entertainment company that owns the Hunger Games and Power Rangers franchises. Levin told GamesBeat 2016 conference attendees that Lionsgate has tried to uncover the best ideas possible, by making a conscious effort to “work with as many developers as possible.”