When attending a show as massive as CES, it can be difficult to come out the end and properly digest everything that you just witnessed. Sometimes it can be helpful to find someone else who went through a similar experience and just talk things out with one another to see what they got out of the show, and more or less compare notes.
One of the topics that I attempted to dive deeper into this year was the VR/AR segment of consumer tech. VR had a markedly smaller footprint at CES in 2018, but that didn’t mean it made any less of an impression on attendees. AR, for its part, cropped up in tons of new smart glasses concepts that were on display, and in a variety of unique non-glasses based applications.
Not long after returning from Las Vegas, I had the opportunity to sit down with Mike Bloxham, the Senior Vice President of Global Media and Entertainment at Magid, a market research firm that focuses on a variety of different industries, including consumer technology. Bloxham, who attended CES 2018 as well, paid special attention to what was happening in the virtual and augmented reality spaces, and brought some very interesting perspectives to the table on how the space progressed over the past 12 months.
Here’s a look at our conversation.
Dealerscope: What did you think were some of the bigger trends to come out of the AR and VR space, and what really stuck with you as you left CES?
Mike Bloxham: I think some of the things that I came away with, and of course, A) you can never see everything, and B) I think you’re approaching this question in the right way, because it is what sticks with you. It’s probably a reflection of the things that are the most prevalent.
One of the things is, we hear a lot over the last year or so about the, probably increased importance of location-based VR to the growth of VR generally in the nearer term, as headset sales have not necessarily hit targets that people put out there originally—although, in fairness, that’s pretty much always the case with emerging technologies and new technology propositions for consumers. But it’s true to say that I think location-based VR was much more prevalent and more advanced than even just a year ago.
There were a lot of propositions there, which were potentially important in all sorts of different places. And the user experience that I witnessed of those kinds of propositions seemed to be very much more advanced as well. The quality of the image, the quality of the immersive experience. Actually, in my experience at least, the total absence of any hint of motion sickness in any of the environments that I ventured into through VR, because people seem to be operating at higher frame rates, technically speaking, was definitely the case. I perceive that there’s been quite a lot of movement forward in that respect over the last year.
Others seem to agree—I mean, more than one person used the phrase “quantum leap” when talking about how far things have come forward in a relatively short period of time. Of course, “quantum leap” is one of those lovely phrases people like to use, and it’s probably something of an overstatement, but I think it’s definitely the case that things have come a long way in a relatively short period.
Did you come across any specific examples on the showfloor?
There were a couple of examples. One would be this thing called HOLOGATE, which probably was one of the most immersive and visceral experiences I’ve had in VR because you were just aware that you were physiologically reacting to this in-game environment, which was staggering. You’ve got two modes of play: one was collaborative, and one is competitive, you’re against the other people in the game, which pairs players in teams of up to for. And basically you’re playing and you’re defending your space against attack from items that come from the sky and on the ground. It’s fast, it’s frenetic, and there’s a huge amount of movement, and you’re listening to each other in the game, and yelling out where the threat is coming from and so forth. It’s phenomenal. You find yourself breaking into a sweat and shaking by the end of it.
I know that they’re getting a lot of traction where people are spending $10 for five minutes at various points where this is installed. That kind of thing, you can see in the Dave and Busters types of environments. You could also see that kind of installation appearing in the likes of cruise ships or resorts, outside the kind of classical arcade environments that we’re starting to see become very big in the far east.
And then, at the other end of the spectrum with regard to the gaming, is—I just have this wonderful experience playing, basically, Pong in VR. And for those that are older, we remember as kids spending ridiculous amounts in playing this what is now an almost prehistoric video game—the father of all video games. And, in VR it really works, it’s great fun because you’re playing in three dimensions. The other person plays a paddle and you play a paddle, and you’re knocking this ball backwards and forwards. So I have to say, it was a rather rude reminder, because I had completely forgotten that as the volley goes on, the ball gets faster, and you actually have to start moving around faster. So you do actually end up getting something of a workout playing Pong.
The game is still very simple—they’ve added a few special effects in there so that it’s a bit more than it was on your screen. But the elemental appeal of that, and the fact that you get it immediately really makes it work. It is, at the other end of the spectrum from this highly immersive, highly action-based, fast-moving, collaborative thing that the HOLOGATE experience was, but still emotionally and physiologically very immersive and a great experience. And I think it speaks a lot to what VR can be but isn’t always—when you can take a game that’s as iconic and as simple as Pong, and make it really satisfying and addictive in VR. So, you know, that was one element that still resonates with me, I still find myself just talking about socially quite a lot.
One of the other things that I think was definitely a thing was the way the untethered experience is advancing—the way the HTC Vive announced that their new headset which is coming out, the increased capacity basically of untethered headsets I think is going to be pretty critical going forward, and the power that those things are actually going to have to take you into a space that otherwise you’ve got to be attached to your computer for thus far.
That combined with 5G, I think is ultimately going to be critical in the advance of VR, and probably to a lesser extent AR—difficult to say on that front. But certainly in regard to VR, 5G is going to be critical to ensuring that the user experience is as rich as it can be, but also as seamless—that there’s no technical issues with bandwidth in the experience. I think as 5G rolls out, that’s going to facilitate a lot more from a user point of view that is internal just regarding the fact what various storytellers, and brands, and others can actually do as we deploy VR in different areas—not just for entertainment, but in other areas as well, whether it’s educational, engineering, healthcare, architecture, and so on. We’re probably going to see a lot more deployments.
You mentioned the untethered experience—in our coverage of the VR space it’s been interesting to see the widening gap in technology. There’s this kind of lower end smartphone based VR experience that a lot of people are used to. Then you can go all the way out to things like Oculus, HTC Vive, and the higher end tethered experiences. Is that untethered experience intended to fill that gap in the middle? And do you view that gap as a problem for the VR industry?
I don’t know that there’s a gap in the middle. I guess there’s a number of different ways of defining the spectrum here. You can define it by cost, or you could define it by experience. I prefer to lean towards experience because you’re always going to find people that are going to pay top dollar for what is positioned as the most immersive experience at any given time. And we saw that when Oculus first came out. There was a bunch of people who were always going to buy into it. Those are all the people that are already spending a lot of money on technology. They’re likely heavy gamers, and so on. And they sold a bunch when it was first started. But then it slows down because there are those people who say, well, they’re not so convinced, the price tag’s high.
We’ve done a lot of research on this with consumers. We run a consumer research consortium around VR and AR specifically because there is little to no objective research in the marketplace that is wholly consumer centric to get at the awareness, the attitudes, expectations, behaviors, and so on, as it relates to all of these very nascent areas of VR and AR. And one of the things our research has shown is that no one talks about the willingness to buy in at different levels.
A lot of people are doing what always happens with new propositions. They absolutely have been educated to rightly believe that—they say, “Wait a minute. The proposition is going to get better, technically speaking. There’s probably going to be more content, the experience overall is going to be better. And it’s going to get cheaper.” That’s just what we know on the basis of experience with regard to pretty much every technological development. There are very few exceptions to that.
What we found is that a lot of people bought into the level that suited them, which was either a down and dirty cheap headset, or it was Google Daydream, or it was anything all the way out to Oculus or PlayStation VR. But still a lot of people are saying, “Well, I bought in cheap. I’m going to upgrade when it gets cheaper to do so, and I get a better product as a result.” Or they’re saying, “No, I’m using other people’s. I don’t need to buy mine right now. I got access to it. I’ll buy in when it’s cheap.” And there are others still saying, “Well, I’m aware of it, but I’m not going to take the plunge yet.”
As you say, some consumers are hesitating right now to buy into VR because they’re waiting for costs to come down. Is it cost alone that’s causing them to delay in their decision to purchase a VR system? Or are there other reasons why they’re just not quite ready to make that leap yet?
A really good question. I don’t think it is a matter of just cost. Cost, as a factor, varies in importance for different people. But while there’s uncertainty, a factor like cost is cited more often and it is more meaningful, because if I’m less clear about exactly what the benefits are, and less clear that this thing is here to stay and it’s going to continue to get better and better, then cost is something that I become more aware of. There’s more risk involved in the investment.
That’s another thing that we found through our research, which is that there’s inherent risk in the eyes of consumers—consciously or subconsciously—in making the decision of which point do I buy into. Do I need to buy an Oculus? Should I do a PlayStation VR? Is Google Daydream the kind of thing that I need? HTC Vive? I don’t know. And with each of those decisions comes a consequence relating to the kind of content that I can get access to.
There’s a lot of walled gardens in the VR content space at the moment, and from a consumer perspective that’s not good, because it limits what I can get access to. I may hear about one piece of content and find that I can’t get to it because of the system I bought into. And that’s a risk.
The equivalent would be like if I subscribed to cable through Comcast but I couldn’t get access to soccer, or ‘The Walking Dead,’ or ‘Game of Thrones,’ but I could if I was a Charter subscriber. That’s, obviously not the case or how things work with cable and entertainment, but it is the case, in some small way, with VR.
People not only have to make the right choice on an economic basis and a technical basis, but they’ve also got to gamble on a content choice—not only what’s available now, but also what might be available going forward.
What was your impression of the different smart glasses that were on display at CES, or of the developments made in the augmented reality space in general?
I’ll be honest, I don’t know which one I was trying on, but I did look at one of those. I thought it was pretty impressive. Obviously, it’s still in the relatively early stages, and I have to confess, I’m a little skeptical about the smart glasses concept generally.
I think, while they’ll work for those of us like myself that do wear glasses once they go into full prescription mode, I do question, with regard to those who don’t wear glasses—are we going to adopt that kind of thing? Are we going to become a population of people who wear spectacles? I don’t know.
It’s actually impossible at this point to predict the extent to which that kind of behavioral change is going to take place. I think about all those who wear sunglasses at one point or another, so maybe we will. We wear sunglasses as a matter of utility, even if we don’t normally live in an area where they’re required, but we find ourselves in those areas whether it’s vacation or business travel, or whatever. We don sunglasses and we tend to care what they look like as well, and we have issues around their quality.
So, if the utility of those kinds of glasses is clear enough in terms of how people understand it, and clear enough in terms of the benefit they deliver, which ultimately is going to be about how ubiquitous the content is as we move around, if I can access content when I choose to, and that content is always available to me. And that’s the great challenge.
If people start to assimilate that kind of offering, their appetite and expectation of what it can deliver to them is not necessarily going to relate at all to what can be done and how quickly content can populate the offering. That has been the problem for a number of AR propositions so far. There’s the bigger picture goal of documenting pretty much everything around us and making it available through AR. The challenge is actually doing that, and is compounded by the overall expectation of consumers that as soon as they bought into the idea of something that it all needs to be there.
Of course, if people start using those kinds of glasses and they find that only about 10 to 15 percent of the occasions where they actually wore them they actually take advantage of them, they can, and the experiences is not 100 percent what they’re thinking, then they’re likely to just stop wearing them. Not that it can’t be done, and technically not that it’s not a good idea—but managing consumer expectations and ultimately meeting consumer expectations is going to biggest challenge with smart glasses.
How about, then, the AR space in general? What sort of adoption have you noticed as far as—maybe not on the hardware side of things, but how consumers are using AR through existing devices like their smartphones?
The installed user base for AR has really only very recently taken a huge boost as both Apple and Android have made it possible on phones that people already had. And we haven’t seen a massive and very sudden profusion of AR applications that are available on our phones.
I saw a number recently, and I think it’s very difficult to track, but I saw a number that was only about 1,500 AR apps out in the marketplace at the moment. That sounds like a big number, but when you look at the difficulties of actually getting awareness and downloads and use of those apps that’s probably not very many. And I don’t know how many really stand out in people’s minds. I think until we start to see more very high profile AR apps, probably linked with other things, then it may be that that’s going to stop things from growing.
I think we’re going to see AR linking to, for example, TV content much more, probably in the coming 12 to 24 months as networks and IP owners seek to leverage content and programming through AR with advertisements. I know that AMC have already done that with ‘The Walking Dead’ tying up with Mountain Dew. That was a really interesting promotion tied into on-air advertising of course, but you had a whole load of promotional stuff going on in the environment. I think we’re going to see a lot more of that, which, in turn, will serve to raise awareness and interest in AR functionality with the phone that you’re carrying around in your pocket all the time.
That is what I think AR needs above anything else. There’s this massive installed user base, but it’s largely latent right not. The IKEAs of this world are helping, but again not everybody is in the market for furniture all the time. Many more people are tuning into things like ‘The Walking Dead.’ But it needs to happen on a number of different dimensions with different types of functionality, including just downright entertainment. When you start to see the entertainment industry and brands really starting to adopt this as a was of enhancing relations with consumers and also generating revenue, then I think we can expect to see the awareness increase, and then behaviors stack up and really start to become meaningful.
I know it’s tough to go into CES with a mindset of what you hope to find or expect to see, but now that we’re past the show and able to reflect, was there anything you thought you would see and didn’t? Or even any tech that left you a little disappointed?
I try very hard not to go to CES with too many expectations. Part of that is about being open to being surprised and delighted by what I do see, and that usually happens.
But I looked around pretty hard, and I saw some interesting stuff from Intel on augmented viewing, in effect. They’ve done some really interesting work in theirproduct development around viewing sports, which is the stuff they were actually showing but it would apply to everything else. And, similarly, we’re going to see some of that around the Olympics on NBC this coming year.
But, they had some great demos there, watching motorsports, which I think also shows great potential for in-home enhancements in advertising model around that kind of content. Although, exactly what those enhancements to the advertising model will be and what will work best has yet to be defined. But, nonetheless, the underlying technology is there to facilitate it, so I guess that’s the next step.
I didn’t come away feeling that there were gaping holes in what was being displayed there. Now that could reflect a lack of imagination on my part, but I tend to, I guess by virtue of what I do for a living, I sit at the end of the—not a skeptic, but I’m healthily guarded in what I expect to see. We can all conceive these ideas, and vaporware can be created. But I like to see stuff that is either already kind of hitting the ground and has already started to grow, or that has the very clear and obvious potential to do so as opposed to stuff which is still very much like the concept car of VR or AR which is never going to run.
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