Ready Player One

We’ve been waiting two years for this. Steven Spielberg’s Ready Player One, based on the 2011 Ernest Cline novel of the same name, was released Thursday to much anticipation in the VR community. The story’s conflict plays out in two worlds: a dystopian “real” world and a virtual one. The real world has deteriorated to a point where the world’s entire population spends the majority of their time plugged into the virtual one, a game called the OASIS, a place with countless possibilities where anyone can be anyone or anything they choose. The film impresses the extent to which people prefer their virtual lives over their real ones. Loup Ventures is asking ourselves, is this a glimpse of the future of humanity with virtual reality?

Is this a world we want to live in? We wouldn’t want to live in the world of Ready Player One but would welcome the ability to immerse ourselves in an OASIS-like virtual world. Taking a step back, the premise is that the “real world” has become so terrible that everyone escapes into the (aptly-named) OASIS. The concept of an OASIS-like virtual world is something we’re more excited about than afraid. VR has the potential unleash the human imagination. The infinite possibilities of this virtual world create the ultimate environment for creativity and community. Players are able to do anything they can imagine with anyone on earth, and connecting people with similar interests becomes infinitely easier.

Today’s VR winter. In 2016, there was hype and hope around the technology and its potential, but things slowed down in 2017, and we’re still waiting for that “killer app” or breakthrough that spurs mass adoption. We expect late in 2018 and 2019 optimism around VR will improve. Hardware is holding VR back, but that soon may start to change with two upcoming catalysts; the release of Oculus Go ($200) and Lenovo Mirage Solo ($400). These headsets are about a quarter of the price of today’s standards, HTC Vive and Oculus Rift, and easier to set up and use (wireless). These will make VR more accessible. They’re both rumored to be released sometime in May. Another factor in a compelling VR experience is the ability to move around freely, know as degrees of freedom. Six degrees (left, right, up, down, forward, back) is the highest level. We’ve tried Mirage and were impressed by the ability to move with six degrees of freedom inside VR, while not being tethered to a PC or console. Oculus Go offers four degrees at half the cost of Mirage. The bottom line is a lot more people need to get compelling VR in their hands to advance VR through the winter. We eagerly await the thaw.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Nvidia; Buy More GPUs, Save More Money

  • NVDA shares dropped 8% today on the announcement they temporary stopped autonomous testing and market sell off.
  • While the company did not comment on timing, we expect testing to resume in the next 3 months.
  • CEO Jensen Huang held a keynote today. The message was more GPU’s save money.
  • The company announced 5 new products targeted at AI, autonomy, and VR.

Nvidia started its GPU Technology Conference on Monday with their focus on AI & Deep Learning. On Tuesday, CEO Jensen Huang gave a keynote on Nvidia’s latest developments in a few key product categories, but Nvidia’s stock dropped by 8%. We attribute 2/3 of the decline to the company announcing they’ve temporary stopped autonomous vehicle testing until they receive a diagnostic report from the Uber accident last week, and 1/3 from the broader tech sell off.

Buy more GPUs, save more money. The message from Jensen Huang was if you buy Nvidia’s GPUs, you can save money. The idea is using an Nvidia architecture requires less hardware that consumes less energy.  That said, users of these systems are solving more advanced problems like AI, which will require an increase in total spending. We remain comfortable with our Nvidia revenue growth estimates of 31% in CY18 and 21% in CY19.

New Products. Nvidia made product announcements today:

  • RTX (AI and blockchain). On the workstation front, the company announced the Quadro GV100 with (real-time ray tracing) RTX Technology. The RTX technology offers a measurable improvement in rendering times.
  • DGX-2 (AI and blockchain). Nvidia also announced the DGX-2 platform for AI. The DGX-2 claims to be the first to offer 2 Petaflop single server deep learning system. Nvidia compared this platform to a traditional hyperscale center, which would have 300 dual-core CPUs and cost about $3M. The DGX-2 is may seem expensive at $399K, but it takes up 1/60th of the space and consumers 1/18th of the power.
  • Isaac SDK (AI) Adding artificial intelligence to robots for perception, navigation, and manipulation. Nvidia showed a video of one of its first Isaac projects, a two-wheeled delivery robot named Carter.
  • Drive Orin (Autonomy). Drive Orin is comparable to two Drive Pegasus supercomputers while being smaller in physical size. Jensen shared that many customers were including two Drive Pegasus chips in each vehicle, and it made sense to package the same computing power into one product.
  • Drive Constellation (Autonomy). This is a datacenter solution used to test and validate self-driving vehicles in virtual reality.
  • Project Wakanda (VR). See details below.

Nvidia committed to an autonomous future. Given the Tempe accident, Jensen spent most of the self-driving segment of the keynote talking about the importance of safety, and why fully-autonomous future means safer transportation. He also reiterated this his belief that self-driving cars are “probably the hardest computing problem that the world has ever encountered”.  The company did not give a timeline of when testing will resume, but given the hold is based on the Uber review, we would expect it to take a few months. Autonomous simulation will play an increasingly important role in the future. Drive Constellation can run thousands of virtual worlds, each while running thousands of scenarios in order to collect more data. For example, 10,000 constellations can simulate about 3 billion miles in a year, significantly more than 5-10 millions driven each year by the current fleets of test vehicles.

Project Wakanda hints at the future of relationship between man and machine. Nvidia closed the keynote by unveiling what has been dubbed “Project Wakanda.” Similar to what we saw in Black Panther, Jensen showed a driver operating a vehicle in virtual reality, while sitting in a fully-equipped cockpit. Next, a third screen appeared and showed a driverless car at a remote location.

While Nvidia didn’t share much about its direction with this project, Jensen did share that he views virtual reality as a way to provide humans with teleportation – augmented with autonomous machines.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Feedback Loup: Virtual Reality for Retail

Virtual Reality, which remains a high-end tech gadget that has yet to gain mainstream traction, is often misunderstood in terms of the span of its use cases. As we mentioned in The Future of Retail, VR will allow consumers to experience products in a more lifelike way before purchasing, which will lead to greater customer satisfaction and fewer returns. Brand experience is another benefit of VR in retail.

If your brand is how people experience your company, then it’s no surprise that VR is a helpful branding tool. VR is the most experiential computing platform. Traditional mediums like television, print advertisements, and social media posts reach a large audience but are inefficient (this is why you might see the same ad every commercial break), whereas VR gives brands an opportunity to immerse a consumer in their world. To see for ourselves one example of a retail VR experience, we visited the Arc’teryx store in Minneapolis.

Using an Oculus Rift, we watched Hut Magic, a VR film that immerses you in the world of Arc’teryx-wearing backcountry skiers staying in a remote alpine hut and skiing uncharted terrain in British Columbia. The film teleports you to the middle of nowhere, portrays a spirit of adventure and associates Arc’teryx products with that spirit. You also get the sense that their gear is built for extreme conditions. If only slightly, we left feeling more excited about the Arc’teryx brand. And dying to go skiing in BC.

Fun but gimmicky. We had to find a store clerk, sign a waiver, and click through some menus before putting on a headset (which still feels odd in public). Ultimately, we’re skeptical on the use of VR in retail stores. Virtual reality makes sense for immersive, experiential shopping at home – and brands will get on board. However, stores are built for retailers to connect and consult with their guests. VR doesn’t facilitate or leverage the retailer’s core reason for being.

Stores are built for retailers to connect and consult with their guests. VR doesn’t facilitate or leverage the retailer’s core reason for being.

If VR headsets were common household items, virtual commerce could gain traction as a way to shop in virtual stores tailored to a company’s liking and your buying habits. Users would be able to try on clothes or see what furniture would look like before buying it, ultimately boosting online sales. Today, however, give the price tag on a VR system, in-store VR makes sense. The store manager we talked to said it drove in more foot traffic simply out of curiosity after seeing someone with a headset on by the window. Also, after an in-store experience, customers are able to try on gear they saw in the video, or talk to a sales expert, but we didn’t get the sense that the VR movie was driving meaningful sales.

In the meantime, some companies are using VR to build their brands in new ways. For example, TOMS put together a “virtual giving trip” video. The viewer visits Peru to see first-hand the joy on children’s faces when they are given the shoes that TOMS customers helped make possible. TOMS brand tells a story, and VR is a great medium to bring that story to life. Other brands from The North Face to Lowe’s have invested in VR. Unfortunately, until VR breaks out of its current position as a high-end entertainment gadget, these use cases will be limited.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

AR and VR: Living, Breathing Storytelling

Written by guest author Jesse Damiani, Founder and CEO at Galatea Design

Story telling yesterday and in the future. For the past several millennia, our stories have lived in two dimensions. We translated our creative impulses into 2D formats—whether it was around a fire, painting, page, poster, motion picture or video game. But with VR and AR, that’s all changing, and fast; it’s no exaggeration to say that we can’t even begin to grasp what the storytelling content of 2028 will look like. The irony, of course, is that this shift to spatial media just means we have to revert back to our spatial understanding of the world—something we engage with every moment of every day—except now we’re no longer constrained by the physical laws of nature. The stories of the future are not just pieces of content, the spaces for immersive experiences.

The “Narrative Potential” of space. Ask any architect, interior designer, or DIY home-renovator: every space tells its own story. Take the example of a library. When you walk into it, what’s communicated to you? Lots of carpeting muffles sound, and often, high ceilings dissuade us from speaking too loudly. Shelves of books, ample desks, and fluorescent lighting imply a place intended for scholarship. These embedded details drive us to make automatic assumptions about how to behave and what to expect—the “story” of that space in time.These perceptual opportunities constitute “Narrative Potentiality,” the chance for creators to fill the space with information that will kickstart our brains’ native storytelling impulses. If I, as a VR experience designer, seat you in front of a table where a vase is positioned precariously close to the edge, I’m tapping narrative potential by making you think about it falling and shattering around you.

The space is the story. In other words, in VR/AR, the space is the story. It won’t be long before most of the digital materials we currently conceive of as 2D exist as 3D spaces. What might your favorite website or social media page look like as a “real” space?

Living, breathing stories. Buckle up: it gets wilder. Our understanding of stories is rooted in linear storytelling—the model we’ve had since we invented storytelling sitting around the fire with each other. In this model, a teller projects the story, and audiences receive it. It has a beginning, middle, and end. Audience participation (listening) doesn’t impact the outcome in any significant way. Where we’re headed is toward participatory stories that we share with each other in real time—whether we’re talking about AR or VR.

It’s a shift from linearity into semi-linearity and non-linearity, from pre-written stories experienced from a remove to stories optimized for impromptu co-creation (using narrative potential). Think about it, when you show up at a wedding, you have a general sense of what’s going to happen—but the fun of it is the experience of it spontaneously unfolding around you, and your ability to participate and impact it. The memory you leave with is your story of that event. Everybody else has a story too, both similar to yours and altogether unique.

In VR, reality is the medium. A friend of mine put it best: “In VR, reality is the medium.” Science tells us that our brains are incredibly plastic; they have space to carry multiple, simultaneous realities in them. If you’re in a story experience with your mom and she’s a purple alien, you carry two versions of her in your head: human and purple alien. Of course, she’ll be playing with her new identity as a purple alien, so your understanding of her will have to expand to include this new information. The point is: it’s all up for grabs. Want to be able to control a third arm using your pinky finger or two winks? Want to bend the laws of physics? That’s the narrative potential that VR and AR open up for us. The best part is we’ll be sharing in them together.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.

Feedback Loup: PlayStation VR vs HTC Vive

Head-to-head. We compared two of the most popular tethered virtual reality headsets, the PlayStation VR and the HTC Vive, to get a sense of where VR experiences are today, what needs to improve, and where they might go tomorrow. While each headset has its own specs and limits, VR experiences differ mainly as a result of the type of machine driving them, a computer (Vive and Rift), a video game console (PSVR), or a smartphone (Daydream and GearVR). The takeaway is that the HTC Vive delivers an unmatched experience around visuals, motion tracking and overall performance, but the PSVR is easier to use. Virtual Reality technology as a whole is more developed than many realize. If it is your first time in VR, both of these headsets will blow you away. While we mostly tested games, our experience with these headsets leaves us more optimistic than ever about VR’s future in consumer and commercial use cases from entertainment to training and therapy.

The PSVR is the most popular VR headset out today (2m units in the year after its Oct-16 release), while the Vive – along with the similar Oculus Rift – is on the high-end of both cost and performance. We believe there will be 536m VR users in 2023 with a market value of $62B compared to the 25m users in a $3.5B market today. These headsets have reinforced our faith in the technology’s potential, but have also shown us there is still a long road ahead.

Untethered VR around the corner. Last week Lenovo announced Mirage Solo, an untethered standalone hardware VR headset, that runs on Google’s Daydream platform.  It will be priced around $400 and ship in the spring of 2018. We believe Mirage Solo will mark a measurable step forward in the utility of VR. More later this week.

Verdict. The clear winner was the HTC Vive. The games look better in Vive because its based on a PC that’s capable of better graphics. The superior visuals of the Vive played a significant role in our feeling of immersion compared to the PSVR. Another major advantage for the Vive is the positional tracking via the sensors versus the PSVR which only uses a camera-facing headset. While both have 6 degrees of freedom (meaning it can track up/down, right/left, and forward/back), the Vive’s sensors allow for a “freer” experience than the PSVR. There were a number of times playing the PSVR where we moved out of the camera’s view to peek around a corner or duck behind cover and it caused the game to pause and instruct us to get back into view of the camera. With the Vive we avoided tracking problems almost entirely. The more we played, the more we came to realize that the Vive is simply a better system.

Price. The Vive retails for $599 but requires a PC with sufficient performance specs, which bumps the total cost to around $1000 at a minimum. The PSVR headset sells for $299, but a $430 bundle should be considered the true base price since the camera and controllers are necessary to get the optimal experience (that bundle also includes a full-length game in addition to VR hardware). However, that $430 doesn’t include the actual PlayStation 4 console ($300) bringing the total cost of PSVR to $730 if the bundle route is taken, more if it isn’t. Both devices have a high price point, and to us that means that a quality experience requires significant investment. The PSVR is considered more accessible because of the large install base of the PlayStation 4, while the average PC owner often needs to upgrade their graphics card or buy a new machine with the processing power to handle VR.

Performance. We experienced very few technical problems with either device. We had a couple instances with the Vive where the display in the headset, but not the computer monitor, would go gray for a second and then return to normal. It’s an issue with the headset not being properly tracked, but we were unable to replicate it when we tried. The handheld controllers in both systems tracked beautifully (when unobstructed by each other in the PSVR’s case). They were responsive, felt natural, and have intuitive navigation and controls. One of the games we played in the Vive, Superhot VR, relies exclusively on the tracking of the headset and hands in order to dodge, aim, and throw objects at enemies. We were completely blown away by the system’s ability to accurately detect our every move.

Visuals. The Vive outshined the PSVR here. The PSVR’s graphics are not the PS4’s graphics. They actually look a little worse than PS3 graphics, which was released in 2006. The Vive was notably better, though both headsets suffered from the “screen door effect”, where it appears as if there’s a screen door between the wearer and what’s seen in the headset. The new Vive Pro headset, unveiled earlier this week at CES, reportedly cuts down on this effect while improving overall resolution. In the PSVR we have been playing a lot of SkyrimVR, the repurposed version of 2011’s smash hit fantasy RPG. Skyrim is famous for its stunning visuals, so as you can imagine there was a great deal of excitement over being able to experience it in VR. Unfortunately, we were disappointed by the PSVR’s visuals relative to its two-dimensional counterpart; it was unable to deliver the beautiful in-game graphics we were hoping for. That being said, the giant spiders were still incredibly unsettling in a very visceral way, and we believe that to be a credit to the headset’s ability to fully immerse its wearer.

Comfort and fit. Both headsets felt comfortable but the Vive edged out the PSVR because it was easier to put on, calibrate to different wearers, and lighter. We enjoyed the velcro straps on the Vive to secure the headset over your eyes more than the tightening wheel on the back of the PSVR. The fitting system on the PSVR has a “head squeezing” feel and while not uncomfortable, it didn’t fit quite as well as the Vive. The Vive also closed off the area below the eyes more completely than the PSVR, meaning less light was allowed to seep through the bottom part of the wearer’s periphery.

Problem areas. The biggest shortcoming for both headsets was in-game movement. The headsets are both tethered to the PC/PS4 so there isn’t much freedom to physically move around. Most games use a form of teleporting, where the player presses a button and selects where on the ground (in the display) around them they would like to move to. It feels clunky and definitely is immersion-breaking. In Skyrim we were able to change the settings to move normally, without teleporting, which felt much more natural. Separately, eliminating or even mitigating the screen-door effect on visuals is imperative. Cutting the cord is also a must – they get in the way, become tangled, and in general are a hassle. We recognize these as growing pains that should be expected of any new tech product, but this issue is already being addressed by the Oculus Santa Cruz project and the Vive Pro.

Bottom line. The Vive is without doubt the superior headset, however the PSVR is great and any PS4 owner interested in VR should consider getting one. The two were not without their drawbacks, but overall we came away feeling optimistic about the future of VR. The industry has hit a rough patch and isn’t seeing the adoption many were expecting, leading some to believe VR will go the way of the HD DVD instead of Blu-ray. We, however, are still strong believers in VR. It’s fun, the games are accessible and attractive to non-gamers, it has limitless potential outside of gaming (despite only being in the embryonic stage), and above all it works. The biggest concerns for VR are whether technology can advance to a point that allows VR to fix its current problems as well as improve on what we have today (smaller headsets, better graphics, haptic feedback), and allow for compelling content to be created. Only time will tell.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.