Busy downtown San Francisco provided an apt setting for XRDC 2018(October 29–30, 2018), a popular conference that focuses on the AR, VR and XR industries. The compact and well-attended show brings together innovators, technology-makers and stakeholders involved in these emerging platforms.

XRDC 2018 San Francisco

XRDC also attracts attendees from a wide range of relevant and often overlapping verticals working in immersive tech for games, entertainment, enterprise, healthcare, science, automotive, advertising, analytics, and government-focused initiatives. As such, the show provides a good mix of program content tracks with talks and panels spanning business, product and creative for these sectors. Given its timing, location and the buzzy presence of key stakeholders, XRDC definitely provides a fair number of networking opportunities for those who are plugged in because of talent, access, tech or deep pockets.

Technology and device makers also show up in full force at XRDC, working hard to impress and connect with potentially key developers and keep the momentum and enthusiasm going for their wares. It’s been a busy conference season and still XRDC generates excitement among developers and people working in the experiential tech space for these reasons. Below are a few key observations from the XRDC conference and this week in XR.

Hardware and Development Standards Announcements

Several important announcements on the technology front were made either at XRDC or were announced via various news and social network outlets at the same time. Of note, device makers made moves to drive adoption and utility via greater levels of USB standardization among the largest manufacturers thanks to the VirtualLink Consortium for advancing these open industry standards. Such moves to standardization are much needed and it’s maybe surprising to see this happen after major efforts were already made to drive mass acceptance of XR devices and to monetize content via revenue-generating marketplaces. However, sometimes that’s just how things happen, especially when everyone is in the midst of simultaneously launching and defining revolutionary platforms that have the potential to forever change the nature of our very existence on this planet. If that sounds lofty, that’s because XR will impact our world in one way or another in ways we’re only beginning to imagine. (To me, some of the most promising areas where this occurs are in the medical and scientific fields and that’s a topic for another article.)

Coinciding with conference, the XR Association (XRA) also released an impressive inaugural XR standards guide for application developers. The guide is the result of a collaboration among leading XR headset makers and developers and sets best practices for developing responsible and ultimately enjoyable XR experiences. The guide goes a long way to promote dialogue around the responsibility of creators share for always putting the user front and center in terms of comfort, safety, usefulness and even fun.

Image via XRA.org

XR Hardware Fanfare

What may feel like progress in the hardware space at XRDC may seem tempered in light of challenges some see in terms of the pace of hardware production was well as improvements needed in the quality of XR experiences from especially the standpoint of the headsets and also the content in order to successfully go mainstream. The same week XRDC took place, for instance, people were still buzzing about Oculus Co-Founder Brendan Iribe stepping down amid the cancellation of plans for a next-gen Rift 2. Instead, the powers that be over at Oculus are opting instead for a “modest update” to their standard headset — which many in the know deem as the opposite of what’s needed to make this industry truly viable on a mass level. Case in point, and happening to coincide with Day 2 of XRDC, another Oculus Co-Founder Palmer Luckey published on his blog additional pointed critiques regarding the need for better user experiences in terms of VR hardware. Luckey’s criticisms, not without controversy, were summarily rejected by others working in the XR device space, who countered that “no technology has ever had ‘be perfect’ as a prerequisite for adoption.”

Image via Twitter

Whatever one’s opinion, it’s hard to escape the fact that XR hardware still has so far to go in spite of already great achievements. Even when XRDC attendees who work in the space are praising the experience of playing Funomena’s fun and immersive fairytale game, “Luna”, on Magic Leap, it’s peppered with multiple excellent suggestions for hardware improvement in terms of the Magic Leap product lines, exemplifying again that hardware has to catch up to where the creators want to go and what the audience will ultimately want in terms of where to spend their time, money and attention.

Image via Twitter

Evaluating Opportunities in XR — Not One Size Fits All

It would be difficult not to admire the range and versatility of the creator community working in the XR space. There is also an openness among experts to share knowledge and these early stages of content development for new platforms feels extremely collegial. Also, there are some stand-out titles. Who wouldn’t be excited by much-anticipated music games like Beat Saber? Or the fact that (as industry experts have pointed outVRChat can claim about 50,000 active subscribers. Beyond those who have a break-out title, find a viable business model, win game jams or occupy a “most-favored” status among headset makers in terms of perks and funding, will dedicated XR developers be able to usher in marketplace maturity ahead of improvements in hardware and devices? What about return on investment?

Image: Beat Saber, by Hyperbolic Magnetisms

In a sponsored session at XRDC, HTC Viveport focused on delivering the message that their platform provides more ways for developers to monetize. For example, the subscription service allows developers to collect 100% of subscription monetization through the end of 2018. Still one has to ask if short-term incentives like these, combined with more significant moves to Rift compatibility, will be enough to sway developers and publishers to commit to embracing a subscription service. Will these incentives be enough to help drive a portfolio management strategy and to devote resources to adapting content to be subscriber-ready? Also, if you build it for subscription (or any content marketplace channel) will they (the players) come?

Image via the Viveport Subscription service portal.

In painting the “more ways to monetize” landscape, do we risk ignoring criticswho point out an environment of declining XR revenues? Maybe. It really all comes down to KPIs for anyone invested in managing one or a series of XR titles. Namely, what does success mean to you and for this title? As a business owner myself, I’ve allowed some of my games to be included in subscription services in the past. Crunching the numbers and understanding how revenues are calculate to really understand the opportunity is one way to figure out if subscription makes sense for any given title, XR or not. It also involves understanding player habits, the true engagement potential for a title, and seeing what additional incentives might be thrown into the mix (e.g., marketing commitments from the service?) that will help determine best steps moving forward on this front.

As a business owner, a maker of games, an entrepreneur and someone with a love of innovation and design thinking, it’s obvious to see that I continue to be of two minds about the current XR landscape. On the one hand, comprising the majority of my opinion, my enthusiasm and commitment to XR and the promise it holds on so many fronts (many explored at XRDC) continue to be unwavering. I’ve mentioned that I am particularly compelled by XR uses and applications in the health and science spaces and yet I’m also equally compelled by the fun and potential of location-based “arcade” style experiences that explore the realm of creativity in a variety of context and settings.

Still, there are developers who can’t or won’t risk it all to jump into immersive tech on an exclusive basis. Maybe that’s ok since the marketplace has to mature and not everyone is going to have everything in place (e.g., resources, runway, vision, access to device makers) to make a significant play in this space. The fact of the matter is that the top-funded headset and device makers need more time (and maybe a lot more time) to iterate on perfecting the technology.

Maybe the incredible rush to mature the marketplace before some would say it was ready for mass adoption and deployment is where the problem lies, if any: A disconnect between the makers and the quarterly numbers crunchers. I believe that if we ever get around to conducting a post-mortem on this time as far as the advancement of XR platforms and devices go, we’ll see R&D people on the device side haven’t had enough time to develop and research features and coordinate around all of the enormous logistical muscle needed to design and deploy any kind of hardware like this on a global level. It doesn’t have to be perfect, and yet to echo sentiments already expressed by others, XR does have to be engaging. At the same time there are companies, entrepreneurs, educators, scientists and game makers who are using XR successfully and, in some cases, generating the revenues to keep going.

Of course, none of this is intended to slag on the device makers. Greatness takes time. At the end of the day, hardware makers need and deserve the time to get it right. We’re all on this incredible journey together. For this reason alone, XRDC was a great opportunity to observe all of these movers and shakers in the same room together first-hand.

Some Useful Links:

Contact me to discuss how I can help you grow your product or business.

M2 Insights follows the XR space from an analytics and marketplace standpoint, tracking and analyzing trends.

XRDC has a YouTube Channel, where talks from the event are posted from time-to-time so if you missed the show, you might catch some great talks posted there.