Virtual reality, exciting as it may be for enthusiasts, is a technology that has yet to truly take hold with the masses, let alone transform people's daily lives in the way that smartphones have. First, 2016 was supposed to be the "Year of VR." Then, in 2017, we've heard over and over about the trough of disillusionment from VR developers. But that's okay, because these early VR developers believe that they can become the leaders of a VR space that one day will be mainstream.
Certainly that's what Oculus VP of Content Jason Rubin thinks and it's why his company continues to invest hundreds of millions of dollars into the ecosystem. If you ask Rubin to respond to analysts' assessment that VR's so-called trough is becoming more of an abyss, he'll tell you why comparisons to other technologies, like Kinect, simply aren't valid.
"I tried to explain this in my keynote [at Oculus Connect] in a few sentences and I think I utterly failed to get the point across," Rubin tells me. "When I said that VR gets compared to other technologies, each technology is different. I would suggest the easiest explanation I can give to a type of technology that VR gets compared to that is exactly wrong to compare would be 3D TV. 3D TV, when it came out, you could understand exactly how good 3D TV could get... It's two cameras sitting next to one another. It's still not real 3D yet. It's stereoscopic, but you can't move your head and see behind things. So I could say right then and there I am not spending a dollar extra on 3D. And, for that reason, none of the networks wanted to make 3D content...So you saw the entire potential of that device in the moment it was launched and you could easily dismiss it.
"You can imagine a world in which VR can do literally anything you can imagine. So, if we judge VR on today's market, we are making a mistake"
"Let's look at VR. I can tell you that there is a world in which VR acts a little bit more like a holodeck than it does today. That is way out of our timeline, but if you talk to Michael Abrash about what VR could be in his lifetime or the next lifetime, you start to get into some weird discussions, because VR could be, literally, anything. There is nothing that can come after VR because VR could simulate anything.
He continues, "VR's potential is literally infinite because as we go from, as Mark [Zuckerberg] said, admittedly bulky goggles to smaller glasses to tricking your inner ear to getting into haptic and touch, you can imagine a world in which VR can do literally anything you can imagine. So, if we judge VR on today's market, we are making a mistake. Even if the trough of disillusionment is deeper than many analysts might have wanted it to be, or they're making that momentary discussion, this is silly... Can we imagine a world where there's no screen door effect? Yes. Can we imagine a world where it's not heavy? Yes. Can we imagine a world where there's more content? Yes. So, unlike 3D TV, in exactly the opposite way, it has infinite potential. Not limited potential. Infinite potential. The question is, how long will it take to get there?"
Some have used the discontinuation of the Kinect from Microsoft not only as a reminder of the demise of traditional motion gaming ushered in by the Wii, but as a cautionary tale for technology that just doesn't resonate on a large enough scale.
Rubin dismisses any Kinect comparisons as well: "Kinect was not as easy to understand as 3D TV. So I cannot look at Kinect and say, 'Well, that's [like] 3D TV.' When I looked at Kinect first, I thought, 'Huh, this could do some interesting stuff.' But it was also not [something with] infinite potential because, ultimately, all it can do is track one or more bodies and put the information that those one or more bodies was transmitting onto a screen.
"So Kinect looked great, reached its potential quickly, and then the additional potential failed to deliver. And developers looked at Kinect - and I was there, I remember I was talking to Microsoft about building a Kinect game at one point very early on - and two years later it was pretty clear to everyone that this was not going to be the future. We had reached the potential. So, while Kinect started looking like VR, it very quickly reached its potential. I will tell you as we sit here today, whether this generation of VR, or a next generation of VR, one generation of VR will take over the world. That's infinite potential. And that's why I don't like any of these analogies. They all fall flat for me."
"Whether this generation of VR, or a next generation of VR, one generation of VR will take over the world. That's infinite potential. And that's why I don't like any of these analogies"
An analogy he does like, however, is one that Intel's Kim Pallister shared with me recently. And that is the VR space is still searching for its Wii - a headset that sacrifices some performance for a much more attractive price and accessibility. When Oculus Go launches next year at $199 - $100 more than Gear VR, with which it'll share a library - Rubin believes the standalone headset could be the answer to the Wii question.
"The perfect product market fit is the right hardware quality with the right price point and the right software to drive it," he says. "I would suggest that VR is on the path to finding that perfect product."
Go is far from perfect, but Rubin believes it will offer consumers a good balance between price and performance. "That $199 buys you a significant amount of capability," he offers. "First of all, it's fully contained. It doesn't need a phone to plug into it. So, right off the bat, if you happen not to be a Samsung phone user... it doesn't require you to switch to Android from iOS or switch to Samsung from another Android marketplace. In being all-in-one, it also allows you to take it on and off quickly. It won't draw on your phone's battery. Updates, carrier things, other stuff like that are taken care of much more cleanly because it's not doing double duty as a phone and a VR device.
"The lenses are fantastic. They're our latest technology. They're amazing. If you try it, you will know I'm not exaggerating. The ergonomics are fantastic. When you take apart a phone and you take the pieces you need for a VR device out and distribute it around a headset appropriately, the weight isn't slung all the way out at the end of your nose, so it feels better. [Gear VR] is still a great way of getting VR inexpensively. But if you're a big VR enthusiast and you use it often or if you don't have a Samsung device, Oculus Go gives you an opportunity to jump into the market. So our addressable market at low price point radically improves."
The other major hardware announcement at Oculus Connect was the company's Santa Cruz headset - an all-in-one HMD that offers six degrees of freedom and hand-tracking (as compared with 3DOF on Gear/Go) but Oculus isn't revealing it as a consumer product just yet. Similar to the multiple dev kit iterations that Rift went through following its Kickstarter reveal, it appears that Santa Cruz is going to continue to be tweaked by the engineers on the team. One thing is clear, though: barring a technological miracle, there's no way Santa Cruz will be able to replicate the exact high-end VR experience that Rift provides.
"To be completely honest, that [power equation] is still a part of our research," Rubin notes. "That's what we're doing. We're looking at the marketplace that it would come into. We're looking at the capabilities that are needed to run inside-out tracking, because all of that has to be in the device. We'll make that decision. Having said that, anyone with a mild amount of technical expertise, could pretty quickly determine that the power usage, the cooling, and the other demands of the PC min spec even that we've taken on Rift is not likely to show up in a portable device in the immediate future."
"The chaos and excitement is creating a lot of failure that will eventually lead to success. So if a company or three or five or ten are struggling, that is the business. They understand that"
There's no doubt that committing to VR remains a risky proposition for many studios still. EVE Valkyrie dev CCP Games just exited VR altogether, and while this interview was conducted prior to that news, Rubin sees a light at the end of this chaotic VR tunnel. Studios may rise and fall around VR in the next few years, but those who manage to stick around may be amply rewarded.
"The chaos and excitement is creating a lot of failure that will eventually lead to success," Rubin stresses. "So if a company or three or five or ten are struggling, that is the business. They understand that. They may complain, but that's the world we live in. They're betting on the long-term success of the hardware, and their ability to be the Naughty Dog, the Zynga, the Rovio, whatever, of VR. There are companies now that are succeeding if you look at the numbers, making million dollar, multi-million dollar titles.
"That did not exist a few years ago. They could not [invest that much]. A few hundred thousand dollars, maybe you could make your money back. Could you make a million dollar title? Probably not. But if you just read across the press, there are companies out there that are self-sustaining and they're making titles that are a few million dollars... As we continue to make more and more [games with larger budgets], we bring more consumers into the marketplace. As we keep our price reasonable, we bring more people into the marketplace. That allows $2 million games to become $3 million games, etc, etc. As long as we stay ahead of that curve, and continue to expand the size and scope of the products we're making, we will continue to make the ecosystem larger and larger, and that will bring more and more people in and that makes developers more likely to succeed on their own."
For that reason, Oculus has been funding games by investing hundreds of millions of dollars into the ecosystem. But it's clear that Oculus would rather see the ecosystem become self-sustaining. At that point, then we'll truly see some AAA efforts on digital storefronts.
"If we pull this off - and I intend to - in the long run, we will be able to back away, and there will be companies like EA and Activision and Take-Two and everyone else that are putting $100 million into VR games and making their money back without any input from us," Rubin adds. "That is the eventual success state. When we reach that point, to wrap this into some of the other questions you asked, some of those people will also want to do non-game things, and that will lead to opportunities to create the next Uber of VR or the Airbnb of VR or whatever strikes the people."
"If a team comes to Oculus with a $1 million title or so, the question we ask ourselves is, 'Do we need to finance this?' That title can make its money back"
There's been a fair amount of controversy surrounding Oculus' exclusives, but to Rubin it's the competition that's not doing VR any favors. "Again, if you're not investing in the ecosystem, you are not driving VR's success. You are coming along for the ride," he states.
These days, Oculus closely scrutinizes every project before it commits to funding rather than looking to fund every small developer that comes knocking at its door.
"If a team comes to Oculus with a $1 million title or so, the question we ask ourselves is, 'Do we need to finance this?' That title can make its money back," he says. "Especially, when we don't fund it, they can put it out on multiple VR platforms, which we're all for. It just increases the odds of making their money back. As Microsoft and others enter the marketplace, that is good for VR, because it is yet more pieces of hardware out there. Unfunded content that comes out for all of them has a better chance of making its money back.
"The shape of what we fund will change as that window of investment that can pay off gets larger and larger every year as the consumer base grows. And it may be that we continue to stay ahead of that to the point where we're funding very expensive games and very expensive non-games. If we get to that point where we're spending twice what we're spending now on an average title, the only way we've gotten there is the average self-invested title is significantly larger too, because it can afford to make that investment and get a return on its investment. I'm not looking to retire anytime soon. But I do think we'll get there some day."
As Rubin alludes to, non-games could very well become a large chunk of Oculus' business in the future. Right now, Oculus is a games-first company, but clearly social platform software and enterprise software for various industries is gaining in importance. And with the new VR interface for Oculus (called Dash) that allows you to control all your programs within VR, thereby eliminating the PC monitor, it's conceivable that Oculus could become more like Microsoft - gaming would be just a slice of the corporation.
"Games were a big part of the launch of the [Apple] App Store because it was a low hanging fruit and it was obvious. But, in the long run, there is no question that, when we reach a billion people [in VR], games will be A use case, not THE use case," Rubin says. "Social will be a massive use case...So will applications and utilities, because we all have things to achieve in our life. Seems to me, since I've been alive, every year we get more things we need to achieve in our life. So if we find a technology that makes some of those things easier, faster, or more efficient, we will adopt it. And that is exactly what drove mobile phone usage. It's in your pocket. Look at how much easier I can do x, y, or z, and you immediately start doing it. By definition, as a computer platform, we will do all of those things. But we will start with entertainment and move towards them. By the way, we announced our enterprise partner program, so we are already taking steps to broaden."
"The one thing I have no control of at Oculus is bringing software through production any faster. And it pains me... I hope we can figure out a better way"
One of the problems that content producers may have with VR is that it's such a young technology that keeps evolving. It's effectively changing faster than some studios can keep up with. This, too, will stabilize, Rubin promises.
"As a long-term developer of content... the most frustrating and exciting times always happen at the same point," he says. "It is frustrating because there is so much change. So as a developer, creative, or other app creator, you are frustrated by how much things are changing and how rapidly they're changing. But it's also the most exciting time because, invariably, that change leads to opportunity and then opportunity leads to success. I can give you an endless number of examples of this. When cartridge based 2D games went CD and 3D, 2D cartridge based character action game makers stuck with 2D because 2D was something they knew and they made hundreds of millions of dollars at that time making those products. My little team at Naughty Dog didn't have that background, so we joined the frustrating and exciting change to 3D and we watched a lot of companies try and fail at how to get various things into 3D. My company happened to get it right and we created Naughty Dog and billion-dollar franchises.
"The exact same thing happened at the beginning of mobile," he continues. "If you remember iPhone 1, iPhone 2 - every resolution of the screens would radically change. The capability of the screens would change. It was crazy town. And we didn't know what people wanted out of the devices... Again, when Facebook opened up the opportunity for people to make apps on Facebook, nobody knew how to make a social app. [That] created Zynga. Was it frustrating? Oh my God! I actually was working on games back then. I'm sitting in Facebook's offices [and] I will still say this. They changed the underlying SDK and rule-set on a bi-weekly basis and we were working on stuff that was going to take six months to a year to come out. It was incredibly frustrating and crazy. [But] it created multiple billion-dollar companies."
VR developers are in the midst of figuring out how to best leverage the medium's best traits. Titanfall creator Respawn, for example, announced a new project at Oculus Connect that aims to depict the realism of being a soldier. Rather than simply glorify the violence the way some shooters do today, Respawn wants to make you feel the tension and fear that someone on the battlefield must endure.
"VR is very empathetic," Rubin notes. "I would also add that it may be that if you experience certain things in VR, it will teach you a lesson about what that would be like in real life. And so everything is a lesson and a learning. I will also say that Respawn is very aware of what they make. They're good citizens. So judge us when the product comes out."
Respawn's title isn't due until 2019, but as we've seen with the VR marketplace itself, patience is a virtue.
"The one thing I have no control of at Oculus is bringing software through production any faster. And it pains me," Rubin laments. "All the Crash [Bandicoot games] were made in a year. Jax took two years. Two years is aggressive these days. At some point, it's going to be a lifetime to bring out software. I hope we can figure out a better way. But, yes, unfortunately, it will take a little while, but the payoff will be there when we finish."