VRguy podcast Episode 26: Kevin Williams discussing updates in out-of-home VR

My guest today is Kevin Williams of KWP Consulting. Interview transcript appears below the media player. This episode was recorded on Sep 5th, 2017.

Kevin and I have spoken 18 months ago on the out-of-home VR industry and this is an opportunity to cover a lot of the new trends that have developed since.


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Yuval Boger (VRguy):     Hello Kevin and welcome to my podcast.

Kevin Williams:  Oh, thank you very much for having me.

VRguy:  So who are you and what do you do?

Kevin:   Oh my name is Kevin Williams. I’m the founding director of KWP and Consultancy in the out of home entertainment sector. I also run and publish the Stinger Reports newsletter. And I’m also the founding chair of the DNA Association, which covers out of home entertainment leisure and that is also the main funder of FOIL, The Future of Immersive Leisure Conference, which takes place in September.

VRguy:  Excellent and you and I have spoken on the podcast about a year and a half ago and so first, congratulations on being the first repeat guest.

Kevin:   (laughter) Thank you.

VRguy:  Sounds like one or two things have changed over these 18 months in the out of home entertainment. Would you agree?

Kevin:   I would have to agree but you know, everybody that knows from my writing and from my presentations, I’m a fanatic about out of home entertainment, so all I can see is fantastic opportunities.

VRguy:  Excellent, so what has changed over the past year and a half?

Kevin:   Well I think the fundamentals are that the industry, let’s look at it as a three way industry. We have the virtual reality sector, the creation of virtual worlds using head mounted displays. We have the augmented reality sector. You’re using objection systems and overlay systems to superimpose synthetics into the real world. And then we have the mixed reality sector, which are the people who use projections for 3D projection mapping or the guys that are using enclosed environments for immersive entertainment. Those sectors have been bubbling along.

               The aspirations that consume a sector was going to be the big thing, you know, remember the comments, 2016 was going to be the year of VR? Sadly, the reality set in and it looks like the price points, the availability of software, the complexity of the hardware has meant maybe VR for the consumer side is not as imminent as some thought. Where for us for the out of home entertainment sector, we’ve been opening bottles of champagne because that’s really fallen into our sector and people still are interested to try VR, but what they’re doing now, it looks like they’re going to out of home entertainment facilities to get their VR enjoyment, rather than purchasing it for home.

VRguy:  How many sites are out there these days?

Kevin:   Oh, you’d have to hire a really good consultant to tell you that. (laughter) In reality, in China, we think that there’s about eight to nine thousand different VR parks or VR arcades. The rest of Asia again, in the high thousands. We’re seeing a lot of them popping up in their arcades, in their cyber entertainment cafes. That’s where they’re stand alone. In the West, in Europe, about a thousand to two thousand. This includes theme parks that have included virtual reality roller coasters, as well as specialist facilities and pop ups and the same for America, you know. I think it’s fair to say from the calculations we’re doing, it’s in the high thousands of VR arcade entertainment facilities and it’s a wide mix.

VRguy:  Would it be fair to say that most of these many thousands right now basically use, you know, off the shelf consumer hardware and off the shelf consumer software from just app stores and then rent usage of those?

Kevin:   Yes, from the Asian, the Chinese perspective, there has been a little bit more control of what content is available out there and so it’s a pot luck situation. Either people are using bi-ports arcades under license or they’re just doing individual licensing deals on content, or they’re not doing anything at all and they’re just doing it totally naked, totally illegal.

               In the west, we have seen a growing trend for the VR arcades to come a little bit more politically aware. From the early days where we saw a lot of startups that just purchased consumer software, went onto Steam and downloaded like crazy, without giving any royalties or license commissions or getting any insurance. We’re now seeing a more professional approach.

               So you look at companies like VR Junkies, with quite a considerable number of locations dotted around the Northwest of America and they’re offering a turnkey solution, the same way that Control V is and Virtuality. These companies are now offering a professional plug and play solution, rather than the Heath Robinson bootstrap illegal approach. And of course there’s still a lot of companies out there that are learning the hard way that if you don’t get a licensed head mounted display and if you don’t get a license contact agreement and if you don’t get liability insurance, then problems will befall you eventually.

VRguy:  Okay and then there are the custom made special for auto form entertainment experiences, right? Like the Void or Zero Latency or some of these others. Go ahead.

Kevin:   I was just going to say, so you have what we like to call dedicated attractions. You have location based entertainment and then you have the pop up VR arcade, so that’s really how we try to distinguish these different attacks and you know, you’re quite right, the location based entertainment approach where you have a facility, you drop an attraction into that is based on virtual reality, usually warehouse scale or arena scale, where you’re putting on a backpack VR headset. Very similar to the laser tag approach to entertainment. The individual has to be taught, you know, what they’re doing. They don their equipment, they’re then dropped into the environment. They play the game, they’re kicked out and they review their scores. That type of system is gaining a lot of interest and I think, I like to look at the different phases of technological adoption into our sector.

               So you can say with VR that we had the early adoption, where you just put a head mounted and display on and you looked at a 360 roller coaster type film and maybe the seats bounced while you were doing that. Then we moved onto the room scale. You can try out room scale amusement entertainment titles. Now we’ve moved onto warehouse and arena scale VR and then the next generation getting a lot of people excited is dedicated theme park attractions, where you have a high level intellectual property IP film content, turned into a virtual reality experience that you can walk through.

               So you’re seeing that kind of approach with Void and their Ghostbusters experience. The Ghostbusters, as I mentioned, they’ve opened in New York and in Dubai and they just opened up in Utah and Canada. We had a chance to try out their new Utah facility, taking that Ghostbusters experience. It even had the smell of burning marshmallows added into the experience and then you have the warehouse, the arena scale that you know, our friends at Zero Latency have developed, which is multiple individuals either combating zombies or working out puzzles as a group in a space station. And you know, I know a little bit about that, but you know, I think you’re in a much better position to give it a little bit more heads up on what those guys are doing with their VR systems.

VRguy:  Probably (laughs) but I’m not sure how much I can share. Zero Latency has been a long time customer. We have been working with them for several years on using those OSVR HDK2’s with some modifications for their current attractions and we’re hoping that they will soon graduate to our high resolution latest version that designed specifically with Public VR in mind.

Kevin:   That kind of leads us on nicely to the point about what’s the separation between the consumer VR experience and the commercial, the out of home, the enterprise, whatever you want to call it. We prefer out of home entertainment because it says what it does on the side of the tin. From a person’s point of view, the experience that you’re going to be able to achieve at home using a Gear VR or a Rift is going to be limited by the space that you have available and the horsepower that you have in the computer.

               With out of home entertainment application, we can take the experience to the next level and that now is including the use of next generation head mounted displays that would be too expensive and too cumbersome for consumer application, but they’re just what the doctor ordered for the out of home application.

VRguy:  So if I think about VR cafes, you know internet cafes come to mind and you they used to be popular because people didn’t have internet at home or maybe they didn’t have high speed internet at home, so they came to public places to do that and I’m wondering, what do you think about the longevity of VR cafes, given that analogy?

Kevin:   Well it’s an analogy which is based on the idea we had during a period of time when PC’s were expensive and land connections were difficult. But, you know, individuals start up their own facilities to allow people to play, you know, Command and Conquer and all of those network games and generate revenue and when the price of PC’s went down, everybody moved to their homes. That analogy for the VR sector is an interesting one.

               You know, I don’t see it as just one answer fits all. I see that the VR arcade approach, where these machines are created more as amusement products that are located into their own unique facility is more the model that is gaining traction, than shortening these machines into glorified land sites and you’ll notice what we’ve seen in Japan with the VR Zone. That is a unique entertainment environment with VR experiences that are modeled closely on the arcade equivalent. We what our friends at IMAX VR have done, is they’ve created a unit that drops into a unique space within a cinema that would’ve once been previously occupied by an amusement site and you know, let’s not get it wrong.

               Though the Asian market still has a strong amusement industry, the west still has a strong amusement sector with what we look at with what’s being developed with our friends at Dave and Buster’s and Main Event, the brand new Chucky Cheese facilities and a whole hoard of new family entertainment center is coming on, marrying hospitality with a component that includes a high level of entertainment. And again, VR can fit into that, as well as MR, mixed reality, as well as all forms of immersive entertainment.

VRguy:  So you mentioned IMAX, when I go into an IMAX facility and I visited the one in L.A., they can reconfigure the space to say, you’re running this experience now and you’re going to run this other experience for next, if they wanted to and contrast that with someone like the Void, where say, this is Ghostbusters and that’s the only experience that you get. Do you have a preference in one versus the other on the reconfigurable space, I’ll show this movie in the morning, this one in the afternoon, versus the fixed views, it’s only one type of experience?

Kevin:   I think that the market is moving very quickly and where certain companies had one idea maybe a year ago, a lot of consideration and development has changed. I can tell you now that the Void has already started working on a flexible component to their operation. They’ve already dropped what we would call a standalone attraction into a family entertainment center in Canada and they’re looking at that as a kind of a roll out. We also know that the Void are creating that kind of standalone attraction that can be dropped into the Disney area when they launch at the end of this year, their Star Wars experience.

               So these are all components towards the end game, which is trying to create a playable, updateable game system. That goes back to your original question, the longevity. You don’t just want to pay a couple million dollars and drop in, you know, multiple player VR experience, only for the game to get tired in six or seven months. You need to have a constant rolling amount of content to these and that’s why a lot of companies in the cinema, in the movie industry, are looking at this technology, possibly as a future successor on a component to their business. Strong IP, constant changing content, and interactive narrative all seem to talk their language, as well as it does the consumer game scene.

VRguy:  So for VR in cinemas, are you looking more at truly VR cinemas, I sit in the chair, I put on a head set and I watch a 360 movie with some enhancements, or are you more bullish on the, next to the popcorn stand, they’re going to be some VR attractions that are either complementing with what’s going on inside the theater in terms of the content or are completely separate, just a different kind of entertainment?

Kevin:   Well, I don’t believe that anyone has proven at the moment that you can sit through a two hour film with an HMD on and you look at an experience that isn’t going to leave you uncomfortable. The same way that the 4D theater industry that uses the motion seat systems and the 3D glasses as hats, work at creating the best mix. I do believe that the 4D movie sector, the people that go into a closed environment, sit on a special motion base and then watch a ride film for three or four minutes is a part of the VR mix and we have a number of exhibitions and conferences coming up, where companies that manufacture those systems, like Simuline or Mediamation are promoting their technology. There is also the sitting outside of the cinema popcorn stand pop up approach. There is the dedicated VR arcade component of the cinema and then there’s the stand along out of home entertainment system. All of these have their place.

VRguy:  Let’s talk a little bit about the money side. Do you have a rule of thumb of how much a consumer is willing to pay for, per minute, for a 30 minute experience, for a 10 minute experience and so on, or do you just see very big divergence and variance across the world?

Kevin:   I work in the out of home entertainment sector. So for me, VR is just one of the tools in our arsenal, be it a motion ride technology and enclosed simulator or an augmented reality ride. So we see commonly with facilities opening VR centers going for the dollar a minute approach, so no average most people are playing for 15 to 20 minutes and they’re usually paying between 15 and 20 bucks for that experience, but there are moves afoot as the experience has become more and more engaging and lasts longer and longer and have more and more technology, that that price may be pushed up into the 35-45 bucks for a 20 minute experience.

VRguy:  And someone told me actually the other way around, so now you have a VR experience in a shopping mall and it’s next to the food court. Maybe the family is not expecting to pay $15 per ride and they’re looking for an entry level, very short experience. Would you agree with that?

Kevin:   I have problems with the pop up shopping mall approach. It is leaning more towards the faddish, play once, never play again approach. The fundamental aspects of deploying media entertainment systems into the market is to generate repeat visitation. It’s the benefits and the curse of our business. We create systems that can at the flick of a mouse can be turned into a dinosaur experience or a zombie experience, but we need the audience to come back. We need them to be compelled. We would be wasting our money if we only had individuals just play once and then walk away. And that shopping mall experience is called transient play. That’s where someone goes, oh look Daddy, there’s a virtual reality system, I want to try that out, give it a go and then they’ll walk away and then they’ll never come back, unless you’re really clever.

               Making that cheaper, just so you can get more bums on seats as it were, only helps you in the short term. It’s a false economy and this is why we’re going to see a very large churn in this sector, where these smaller start up, pop up facilities that don’t embrace a longer play model and the more engaging model are going to fall by the wayside because the mathematic problems won’t work out, but at the same time, we’re going to see certain development systems come out with more and more content exclusively aimed at a home sector and they’re going to generate a repeat visitation, even maybe create a compelling franchise, like a cinema and generate a good price point. You know, we see $18 is the good price point for the top premium cinema experience. Could we see the $20 point for a strong 20 minute game experience against a three hour movie or two hour movie experience. These are the things we’re going to be learning in the next few months and years.

VRguy:  So as we get close to the end of our discussion today, let’s assume I was new to this industry and wanted to experience it, wanted to meet some of the key players. What are good places they chose for experiences that I should go to, to start getting involved in the industry?

Kevin:   We’re lucky enough, through the DNA Association, to be running the Future of Immersive Leisure Conference in Las Vegas, September 13th and the 14th and that will have the premier selection of leaders and developers in the field. We also have a number of investors and we’re looking not just at the virtual reality side, but we’re looking at the immersive entertainment side. We also have a bit of the future touched upon with some involvement from the casino industry, as they tell us a little bit more about what they’re thinking of doing in the virtual and immersive entertainment sector. But other than plugging my own conference, I would really recommend that anyone interested in keeping up to date on this get the subscription to the Stinger Report and they can do that by going to our website, www.dna-association.com, where we have information about our members, we have news and there’s an email contact there if you want to get a subscription to our service. And then we have in November, a really big show in Orlando. Now this is about three football fields big. It’s an incredible conference. It covers the whole of the Orange County Convention Center. That takes place in November, if I remember correctly, 18th to the 20th and that covers everything from inflatable bouncy castles to popcorn to candy floss, but it also has the latest amusements, attracts and there will be quite a few of the latest virtual reality and immersive systems there. So if you can’t make September in Las Vegas, there’s always Orlando.

VRguy:  And that’s the IAAPA Conference, I believe.

Kevin:   That is IAAPA.

VRguy:  And how about, E3, GDC, VRDC? Do you see VR amusements also happening in these conferences or really in the more specialized ones for the park industry.

Kevin:   I’ve had the chance to present at most of those conferences that you’ve listed and we were invited as an adjunct, as an addition to what could be happening with the technology. It’s very difficult to be talking about consumer VR one day and then suddenly slam the brakes on and pivot and start to talk about commercial VR because of the way our industry works. It wouldn’t surprise me if we see a lot more commercial VR systems appear at the shows, purely to fill the vacuum that is going to be left as things calm down in the consumer VR sector as things go through the inevitable restructuring and changes. There’s a fantastic conference dedicated to people who want to start up pop up VR arcades. The VR arcade congress that takes place in March in California, run by one of the partners of our conference. But really, all of the other conferences, the E3s, the SVVRs, the AWEs, are all really dedicated to the consumer application of the technology and I think maybe they may have an component to look at out of home, but really they have to be a jack of all trades, which can be very difficult.

VRguy:  Okay, so I think we’ve covered how to subscribe to your newsletter. Is there any additional conflict information you’d like to share.

Kevin:   Well, I think the best way for someone jumping into this is to go to www.dna-association.com, just to get a rounding there. My email and details are there. They can contact me directly if they have any questions about either attending our conferences or getting their hands on a subscription, or if they just have general questions about entering the sector. There’s a lot of people out there who know little about out of home entertainment.

VRguy:  Very good Kevin, thank you very much for joining me on the podcast today.

Kevin:                              Thank you very much for the opportunity




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