Sean Peasgood, President & CEO Marcel Valentin, Vice President www.SophicCapital.com V IRTUAL R EALITY : I T ’ S R EAL A LL R IGHT Immersing Ourselves at the 2015 Game Developers Conference March 9, 2015 We attended GDC 2014 and 2015. While virtual reality was present last year, this year we are convinced it is here to stay and will have wide spreading impact across several industries. The number of head-mounted devices has increased significantly along with numerous sensors and input systems to support the ecosystem. Content is beyond belief; it really is real. You experience fear, joy, anxiety; your heart can race; this stuff is amazing. Science fiction has become real, and we believe that wide-spread adoption could occur within a year and a half – quicker if open source virtual reality gains traction, which we saw evidence of already taking place.
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Transcript
Sean Peasgood, President & CEO
Marcel Valentin, Vice President
www.SophicCapital.com
VIRTUAL REALITY:
IT’S REAL ALL
RIGHT Immersing Ourselves at the 2015 Game
Developers Conference
March 9, 2015
We attended GDC 2014 and 2015. While virtual reality was
present last year, this year we are convinced it is here to stay and
will have wide spreading impact across several industries. The
number of head-mounted devices has increased significantly
along with numerous sensors and input systems to support the
ecosystem. Content is beyond belief; it really is real. You
experience fear, joy, anxiety; your heart can race; this stuff is
amazing. Science fiction has become real, and we believe that
wide-spread adoption could occur within a year and a half –
quicker if open source virtual reality gains traction, which we
Sean Peasgood: www.SophicCapital.com March 9, 2015 - 6
HMDs in the Kingdom
This year there were several new HMDs on the scene. Samsung Gear VR was used in several
booths including Oculus’ (Samsung developed Gear VR in conjunction with Oculus). This wireless
HMD is essentially a shell that slips over a Samsung Galaxy 4 mobile phone. Gear VR is the second
major HMD available for consumers (Google2 Cardboard was the first), and is available on
Samsung’s website for $199.99 (not including the phone). Enthusiasts also queued for their turn
with Gear VR, and although the wait was not as long as that for Crescent Bay, their enthusiasm
was as intense. Whenever we strolled by Oculus’ booth, all Gear VR seats were filled. Our take is
that Gear VR is one of the slickest-looking HMDs around. It was light, comfy, and had a pleasing
“iLook” to it. But…
…we had some issues with Gear VR.
While the Gear VR still gave you a sense
of movement and rendered seamlessly
when you moved your head, the lenses
fogged up after five minutes, which
limited the experience3. I actually took
the Gear VR off before demoing all of
the games and content because my left
eye blurred. On other occasions our Gear
VR experience was not nearly as
problematic, but we agreed that the
games and content didn’t have the
“WOW!” factor when compared to the
Crescent Bay demo.
Perhaps the issues we had with Gear VR were due to the fact that it isn’t tethered to an
external video card via a cable like Oculus, HTC, OSVR, and Sony’s Morpheus. Gear VR uses
a processor resident on the HMD to drive content to a Galaxy screen, and the resolution of the
content was visibly less than that provided by Crescent Bay. For now, “cableless” HMD processors
are slower than a computer video card, but we believe that several years down the road they will
likely provide an equal experience.
But we thought we’d give Gear VR another shot. We had tried Oculus twice, so in the interest
of fairness, we decided to extend the same courtesy to Gear VR. For some reason, we enjoyed the
Gear VR substantially more. Perhaps it was because we had time to anticipate what we needed to
do before immersing ourselves: get a tight fit, focus the lenses, and stop thinking about the
technology. We relaxed and both had a great Gear VR experience, but the graphics were still not
close to as impressive as what we saw with Crescent Bay.
Look Out Oculus, Others Have Come to the Party
The OSVR platform seeks to unify input devices, games, and output in order to take VR to
the next frontier. With contribution from VR leaders, including Unity, Unreal, Intel, Bosch, Razer,
2 Speculation in The Wall Street Journal suggests that Google may be getting serious about VR. Sources
say that Google has tens of engineers working on an Android operating system to run VR applications. 3 Last week at Mobile World Congress, Samsung did announce a new, smaller Gear VR for the Galaxy S6
and S6 Edge that has incorporated mechanical vents to eliminate this issue
laser and fiber engineering, and processing positions. Putting on our engineering caps, this suggests
that Magic Leap may not implement a Gear VR-style, smartphone solution, but rather an optical
lens system that directs light onto the user’s eyes.
Plenty of New Input Devices to Enhance the Virtual Experience
An input device is an accessory used to enhance VR beyond just video and audio. Last year,
we found several companies showcasing their offerings. This year, they were everywhere. Guns
with haptics (feedback through the sense of touch), controllers that slide over a finger, sensory
rings, light sabers – all were there to support VR games. A few input devices stole the show.
Omni VR treadmill could
be the ultimate immersive
experience. One of the
most popular booths at the
show, Omni showcased an
input system that allows for
complete freedom of
movement within a small
space. While public demos
were not available and we
were unable to try the
product, the booth was
mobbed by onlookers all
day long. They watched
one of the Company’s
gamers work up a sweat as One of the most popular booths at GDC 2015
Virtual Reality: It’s Real All Right
Sean Peasgood: www.SophicCapital.com March 9, 2015 - 10
he walked, ran, and sprinted his way through a shoot ‘em up game. His motion (all 360º of it) was
streamed to a display that allowed spectators to see what each of his eyes saw through his Oculus.
Omni’s treadmill first gained widespread attention when it appeared on Shark Tank (ABC’s
investment reality show). The Sharks turned down the Company’s proposal, but weeks later, Mark
Cuban joined venture capitalists in raising $3 million for Omni.
Speaking with Omni’s management onsite, they mentioned that they already had preorders
for units on their website. And although Omni plans to tweak the model slightly for the consumer
launch, the treadmill is close to completion. The consumer version is expected to be released this
summer with a price tag of $699 for a package that includes:
1. Virtuix Omni gaming platform,
2. one pair of Omni Shoes for comfortable, extended gameplay (you have to use these shoes),
3. one pair of Omni Tracking Pods and tracking software,
4. one Omni Harness for support, safety, and rapid, untethered action,
5. one year limited warranty (voided if purchasing from an un-authorized re-seller), and
6. TRAVR and other demo games demonstrating novel VR game dynamics with analog, de-
coupled player direction and speed.
While we do not see everyone gaming on a treadmill, it may make
more sense to be in a secure treadmill environment when immersed
in VR rather than stumbling around a room with furniture and
obstacles. Omni is clearly a peripheral to watch, and with one killer
game/application we think it could be a major consumer product to
complement VR in the future. A few people we chatted with
commented that this was the future of gaming. We agree and also see
the future of home exercise and injury rehabilitation to include the
Omni.
Privately-held Nod is a new company developing wearable gesture
rings; rings that allow people to engage objects via movement.
Based in Mountain View, California, many on the design team are
alumni of Apple, Google, Facebook, Amazon, HP Labs, Samsung, and
NASA. The ring on display at GDC 2015, which is also called the Nod,
is a universal controller that allows for communications with all smart
devices within a 30 foot range. No commercial Nod is available,
although it is slated for release sometime this yearvi. No word at the
booth on when Nod will unleash its game controller unto the public.
Are you ready for some Star Wars? Sixense demonstrated their
virtual lightsaber with their STEM (Sixense Tracking Embedded
Module). The system comes with two hand controllers with built-in
sensors, another sensor that’s installed on the HMD, and a base station
that transmits an electromagnetic field to read the sensors. Although the
system cannot detect finger motion, it can detect where the controllers
are even if they aren’t in the line of sight. This allows future Jedi
masters to twirl, parry, dodge, and thrust to their hearts’ content without
the letdown of being removed from an immersive experience.
Nod gesture ring
May the force be with you, courtesy of Sixense
Virtual Reality: It’s Real All Right
Sean Peasgood: www.SophicCapital.com March 9, 2015 - 11
Our last day at GDC 2015 revealed an unbelievable surprise. At the end of one isle was a
Japanese haptics company named Miraisens. We had walked by their booth several times on our
way to see the “big VR names”. Few people milled around Miraisens booth but had we been more
observant, we would have caught on that something special was happening there.
“3D Haptics Technology” was what Miraisens banner read. Haptics involves bringing the sense
of touch to VR and has been around for a while. But “3D haptics?” We never heard of it before.
BIG mistake. What Miraisens does is recreate
the sense of touch in several dimensions by
means of vibration. Some way, somehow, they
had a tiny, mouse-shaped black box that could
simulate water running down our fingers,
electricity shocks, the bumpiness of running
your fingers over bumpy rocks and smooth
pebbles. It was magical. Even better, it felt real.
We were then treated to a driving simulation (not
VR) where we held a secret sensor in each hand.
While driving, we could feel the bumps in the
road, the slippery grass when we drove off the
shoulder, acceleration – we felt the car
accelerate. We’re positive Miraisens technology
will also have a major role in the future of
gaming – 3D touch.
Best Friends Forever
“What’s Pong?” a young coder asked after I joked that Pong was my favorite game. The
young man was serious. He shook his head, and my smile collapsed. Dejected that the young fellow
would never know the fear of burning a tennis court into his dad’s black and white TV, we
wandered over to the North Hall of the Moscone Center to check out the software companies.
And that’s when we saw it – a museum of arcade games. We froze, bit our bottom lips, and
stared. Glancing at each other and cracking smiles was all it took to read each others’ minds. We
dove onto the machines taking turns playing Asteroids, Galaxia, Frogger, and Star Wars. The games
were fun, interactive, and just as intense as any VR experience that we had. These games were
immersive but without headsets, 4K video screens, or 3D audio. They drew us into their world
using only knobs, joysticks, and crappy television monitors. Yet, in spite of the ancient technology,
these boxy dinosaurs opened trunks of childhood memories from the days of hanging out in noisy
arcades, watching girls play Ms. Pac Man while we self-debated whether to spend that last quarter
on another game of Qbert or bus fare to get home. Arcades were places to escape the real world,
which is exactly what virtual reality aims to achieve. But in spite of the complex interlacing
requirements of current HDMs, it doesn’t take much to get away; it really doesn’t.
Baby you can drive my virtual car. Powered by Miraisens
Virtual Reality: It’s Real All Right
Sean Peasgood: www.SophicCapital.com March 9, 2015 - 12
After 20 minutes, it was time to go. And as we
rounded the last machine, there it was: Pong,
standing proudly albeit with neglect. We were
drawn to the ol’ boy, and stood silently in its
glory. No longer functioning, we gave Pong’s
simulated wood-grained finish a stroke and its
dials a gentle spin.
After paying our respects, we left. But as we
turned to give it a last glance, Pong’s huge
screen looked like it was watching us. A couple
of teens took our places before the machine. We
watched them inspect the weathered carcass
and engage in a discussion with full smiles.
Maybe they knew they had just had an ancient
VR experience; maybe they didn’t. All we
know is that Pong didn’t care; it wanted their
quarters.
Acronyms Used in this Report
AR augmented reality
GDS Game Developers Conference
HDMI high-definition multimedia interface
HMD head-mounted display
OSVR open-source virtual reality
STEM Sixense Tracking Embedded Module
VR virtual reality
References
i Brad Chacos, Move over, Oculus: HTC announces SteamVR-powered Vive VR headset, PCWorld, March
1, 2015 ii iFixit, Oculus Rift Development Kit 2 Teardown, March 19, 2014 iii Nicole Lee, HTC's Vive made me believe in VR, engadget, March 4, 2015 iv Nicole Lee, HTC's Vive made me believe in VR, engadget, March 4, 2015 v Vuzix Delivers Working Enterprise Smart Glasses Solution to DHL for Warehouse Picking, Vuzix,