Stinger Report - 14/06/2021

TSR Newsletter | June 14, 2021

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The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .

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Doubling Down on Entertainment

Part 2 | # 1074

Report Skinny

In The Stinger Report #1074 – This issue covers in detail:

1. [BREAKING NEWS] Commercial VR is vital for growth of the Servius VR scene, with the launch of new standalone VR headsets from Pico Interactive and DPVR which set their sights on Enterprise releases.

2. [BREAKING NEWS] At the same time, HTC breaks the silence and reveals a brand new range of Enterprise-focused VR headsets with a standalone VIVE Focus 3 system, and an update to the PC VR range with VIVE Pro 2.

3. [TRENDING NEWS] In response to this news, Oculus VR starts to defend its market position and promises a new Quest Pro in the wings, along with changes to its TOS for commercial, and all while suffering a high level of executive departures.

4. [BREAKING NEWS] Exclusive news from the show floor of China’s largest amusement and attraction exhibition – The Stinger Report reveals the trends in VR and MR that are revealed from the first real physical show floor of the year.

….and much, much more!

To read the full Stinger Report, register for your subscription here.

- The Stinger Report, published by KWP and its director, Kevin Williams, is the leading interactive Out-of-Home Entertainment news-and-views resource, covering the immersive frontier and beyond.

Main Report

Following on from the previous coverage on the impact of VR in the continuing evolving consumer games scene, and its appearance in the eSports arena, the actual hardware has seen a generational update, with several manufacturers focusing on their core Enterprise business to usher in new advancements in the more defined two areas of investment.

- Serious VR In The News

Speaking of VR development, there was much movement from the other players in the virtual hardware landscape. May seemed to be designated as the month for most of the VR hardware community to reveal their new plans.

These announcements seemed to underpin the progression of the VR community into a two-tier market, split between “Casual VR” for the B2C and “Serious VR” for B2B approaches. Meanwhile, the casual (consumer) VR sector has been getting a lot of hype, supported by Facebook’s investment. It was clear there had been a concerted pivot towards business (serious) deployment as well as the more prosumer user, and key announcements made in the month underpinned this.

- In the Blue Corner

One of the first announcements was made by Pico Interactive, as the company revealed the price placement and launch dates for the standalone ‘Pico Neo 3’ VR headset. The company confirmed an Asian release, and a full Enterprise release schedule for the platform internationally, with a Terms of Service (TOS) for commercial deployment including LBE VR with no subscription or restrictions. This news was followed by announcements from DPVR (previously Deepoon) and their new ‘P1 Pro 4K’ standalone VR system (the previous ‘DPVR E3’ being a mainstay of the Chinese VR LBE scene). All aspects use Qualcomm XR2 hardware, all with TOS allowing commercial entertainment deployment.

The Pico Neo 3 and the DPVR P1 Pro

Following these, the big announcement from HTC was made (following on from the company’s own social media teasing), during a two-day virtual conference and presentation (VIVECon). The company revealed the launch of two VR headsets focused squarely on the high-end B2B approach. First revealed was the new standalone VR headset, the ‘HTC VIVE FOCUS 3’. This is a high spec system with unique features that, like all the other standalones, employed the Qualcomm XR2 chipset. However, in this case, it had been optimized and received additional cooling to improve performance. The whole design of the FOCUS 3 was refined with a magnesium alloy, rather than plastic, chassis for a rigidity and lightweight commercial package, including a “hot-swap” battery configuration, and more ergonomic weight relief.

The second major announcement from HTC was the launch of a high-end PC VR headset with the ‘HTC VIVE Pro 2’. Building off the proven pedigree of the original VIVE series, this latest incarnation included improved 5K visual performance, support of existing tracking, and the ability to offer a great performance supporting commercial requirements. This is a strong replacement to the VIVE Pro that has done stellar work in the VR arcade scene. This move was marked with the announcement of a new service support operation from HTC, called ‘VIVE Business’, that will allow businesses and developers access to all the SDK and content needed to support their efforts in this market and create a cabal of Independent Software Vendor (ISV) partners.

FOCUS 3 and the VIVE Pro 2 [HTC]

Along with the wide selection of Enterprise users gathered for the HTC conference, the Location-Based Entertainment (LBE) sector was represented by HOLOGATE – HTC is not shying away from the needs of the commercial entertainment market. Regarding another element in support of this and the wider B2B landscape, HTC announced their partnership with iFixit to ensure the right to repair their VR hardware, with faster customer support and a sustainable agenda – whereas other manufacturers have looked at excluding the ability to repair products. In other news regarding HTC’s support of their platform moving forward, it was revealed that BANDAI NAMCO’s anime animation studio (BANDAI NAMCO Pictures) had signed a partnership with HTC to license several of their film properties to the VIVEPORT subscription VR app store.

- In the Red Corner

The appearance of new competition in the standalone VR scene saw Facebook founder and Oculus owner attempted to hijack the momentum of the competition’s announcements by giving an interview with CNet, doubling down on their plans to own the consumer VR ecosystem. The Oculus Quest 2 had been the dominant force in the standalone genre, with Oculus having abandoned all their PC VR aspirations, and a partnership with Lenovo to only focus on selling their loss leader headset. Sales had claimed to have beaten previous products from the company (although suspiciously not included was the Samsung/Oculus partnership of the 4m selling GearVR).

In the interview it was also stated, by the Facebook co-founder, there were big plans for a new Oculus Quest Pro headset series that would have new sensors and eye-tracking, along with other new features. The spokesman also stated his vision for VR being a wireless experience, heavily promoting that Oculus move to AirLink. He also focused on the opportunity of Exergaming using VR, which the company has been promoting heavily (with an advertising and billboard campaign), seeing fitness apps replace traditional workout and gym activities. The strategy, going forward for the VR company, was revealed as not looking to sell a premium device and making money off this, but in looking to sell a unique experience in a unique metaverse heavily curated by Oculus. Supported by a next generation of Quest hardware that can straddle high-end and low-end VR via extensive sensors, this demonstrates their goal for the next five years of the operation.

The impact of the new competition seemed to galvanize Oculus to try and win back some of the good-will they had squandered with the Enterprise community. It was revealed that the ‘Oculus for Business’ team had announced they would be waiving the monthly/yearly subscription fee on top of the Enterprising pricing, to be able to use the Quest 2 for commercial applications. This followed recent “re-drafting” of TOS for use of the platform in commercial entertainment. This news from Oculus reveals the impact of recent developments undermining their aspirations to own the ecosystem. But more developments were about to befall. It was announced that the VP of Facebook Reality Labs partnerships (for Oculus) would be leaving immediately, after four years with the corporation. This surprise move came after the Facebook interview and changes in TOS, with some suggesting a reappraisal of their partnership and commercial strategy.

An inducement to re-evaluate the operation’s attitude to the VR community came at the same time as the departure, as Oculus’ only VR headset was removed from the Amazon Europe website. At the same time as the European Union was carrying out an investigation into the means regarding how Oculus Quest gathered and tracked user data, Amazon announced it had delisted the Quest from its website based on the findings from the ‘European Commission Safety Gate’. There were numerous reported claims of the system causing skin irritation – in particular concerning the material used in the foam interface (face gasket). In a statement, Oculus claimed the “issue” had been resolved and the delisting was temporary. However, the statement revealed that this issue had been known of back in December, around the same time that the company also received complaints about a defect with the Elite head strap for the Quest.

- Moving Forward

As stated, the “Serious VR” scene represented by the commercial sector was an obvious focus for the majority of the remaining VR manufacturers – with Lynx, Canon, HP, HTC, Panasonic, Pico, DPVR, 3Glasses, Pimax, VRgineers, and Varjo all with B2B offerings that do not come with strings attached. Meanwhile, not to be outdone, the “Casual VR” scene received some coverage with the news that Sony revealed more details about its planned PSVR2 system. The company revealing that the Sony platform will incorporate a 4k display, the ability of eye-tracking, and haptic feedback; along with rumors of incorporating a wireless capability.

Regarding the unusual peripherals that support the adoption of virtual technology, several companies have attempted to establish consumer-based motion seating – emulating the systems seen in commercial deployment. One of these start-ups was Yaw. After the operation’s first offering in 2018, they announced a new Kickstarter for the new Yaw2, that offered much more believable operational elements. The company achieved over $1m pledges in crowdfunding from the first week of being placed (breaking the initial goal of $100,000) and, with this breaking of the original target, the company has started to add “Stretch Goals” to the Kickstarter. This news came just as Virtuix announced that it had raised over $19m, from more than 6,500 investors, in the conclusion of its Series A-2 financing round.

Speaking of the continued influence of VR, and the finalists for the VR Awards 2021 have been announced. Celebrating its fifth year, the VR Awards have become a gathering point for the promotion of excellence in the international VR scene, covering consumer game and applications, commercial development, and the impact of location-based entertainment within the immersive space. The owner of The Stinger Report, KWP, has been a senior judge for the organization, working with his fellow judges panel to select from hundreds of nominees. Recently several judges, including KWP, held a video webinar on the aspects of VR nominations – which could be seen here.

- Asia Charting Amusements Reinvestment

The Chinese market has been one of the first to attempt to relaunch and return to business, with many facilities now operational, and the amusement trade once again holding full physical events – rather than their brief dalliance with virtual events. Marking this move was the holding of the 2021 Asia Amusements & Attractions Expo (AAA’21) held in Guangzhou, China. This is seen by many as the largest amusement and attraction products event, by sheer scale of exhibition coverage – and this year’s event had a lot to catch up on and revealed many of the key new trends that will play a part in shaping Western amusement business.

Amusement powerhouse WAHLAP Technology, known in the West but a much more powerful force in its home territory, showed new original releases alongside amusement pieces manufactured under license. One of the new releases was the arcade-street-racer called ‘Asphalt 9 Legends – Arcade DX’. This four-player network racer, with a 43’’ display racing illuminated cab with motion base, wind vents, and player camera. The game was, in fact, developed by Spanish studio Gameloft (in 2018) as a consumer release, and then updated for amusement deployment by IGS, with a host of licensed vehicles.

One of the packed show floor halls [WAHLAP]

The appearance of a new racer from WAHLAP also marked the launch of a new initiative within the corporation, with the debut of ‘WAHLAP E-Sports Championship’. The company had its previous racer, ‘Speed Driver 5’, hooked up to the new tournament championship platform that will encourage eSports competition between connected machines and will culminate in a live streamed championship event with prizes. More details on the scope of this platform will be revealed, although this marks the latest amusement manufacturer to delve into the lucrative waters of eSports amusement-based platforms.

Following the more physical play path, WAHLAP showed ‘Crazy Rafting’ – a reimagining of the concept inspired by the 1997 NAMCO classic (‘Rapid River’). Two players take control of the oars interface of their little boat as it is swept down a river, attempting to avoid dangers and obstructions. The bench seating cabinet sits on a rudimentary motion base. Continuing the water theme, the company also had the latest outing for ‘Jet Blaster’. First launched and then vanished in the build-up to the Global Health Crisis, the jet ski racing game was wheeled out again for a proper presentation, now with four-player network action, heavily inspired by the 1996 SEGA classic (‘Wave Runner’).

Physical gaming was also seen with the new release ‘Skip Time’ – the players run on the spot on the special floor sensor, while controlling their character on screen. Like the treadmill video games charted in our AAA’19 coverage, this latest interpretation offered more features. On the booth at AAA’21 WAHLAP also included third party releases from Raw Thrills (with ‘Nitro Truck’), as well as a circular touchscreen rhythm game from SEGA (with ‘Mai Mai DX 2021’) and ‘Pokemon Ga-Ole’, a battling game with card vending, partnered with Takara Tomy. The one major observation from the 2021 booth presentation was only one VR piece on the booth, namely the previously-launched IGS title ‘Overtake VR’. However, WAHLAP brought more up-to-date VR to the show floor.

New virtual reality concept ‘VR Agent’ was shown on the WAHLAP booth – the concept, rather than being a conventional VR deployment, places the 3Glasses Blubur S2 VR headset goggles mounted on the weapon the player wields, rather than worn as a headset, which is automatically tethered, in a self-service kiosk design, with the ability to link four cabinets together. The game itself was developed by 3MindWave, and previously presented at last year’s AAA, but has now been taken up by IGS/WAHLAP. This is an unusual approach, turning the VR system more as a mounted scope, rather than an immersive viewing experience. One element of the WAHLAP booth was the presentation of the ‘SAaaS’ amusement business management platform, this is moving to becoming a standard infrastructure and the company, in China, is an operator of amusement venues (under the ‘Funloop Land’ brand).

Covering AAA’21 remotely was, as always, an interesting process, and we are thankful to our sources. Another major exhibitor was UNIS Technology, with the company presenting many systems we had previously reported on, launched last year. Their VR was represented by the previous success story of ‘Ultra Moto VR’ – but UNIS also showed the self-service VR kiosks system. Also, LEKE VR had a self-service VR system on display – along with a selection of their previous releases. Most of the familiar names in Chinese VR showed products that have already been reported on in previous coverage.

Other exhibitors showed their VR kiosk approaches. On the joint NetVios/Sanm Technology/Movie Power booth were the new VR upright kiosks (‘NetVios Mini’), incorporating an automated tether system and incorporating the HP G3 headset. This platform was running the Western game ‘Raw Data’, developed by Survios, and offering a network cabinet capability based on the NetVios tournament/eSport platform. While the hardware for this system has been manufactured by Movie Power, it was revealed that the platform will also support the WAHLAP ‘SAaaS’ management system, offering a combined library of popular Western VR games to choose from. No word on if this version of the game will see a Western release.

Latest VR self-service kiosk platform [NetVios]

NetVios is a joint venture between Chinese NetEase (Chinese online service and gaming provider) and US consumer game studio Survios. The new operation, launched last year, hopes to bring American game content to the Chinese market. The business is hoping that the VR self-service kiosks will prove a strong ecosystem, supporting an eSports and management platform. Survios has previously attempted to enter the VR arcade scene, launching a site, and installing a VR installation at the Las Vegas LINQ Hotel, as well as a partnership with Immotion previously in this field. On the booth at AAA’21, the ‘NetVios Mini’ was also shown, running ‘Raw Data’ along with ‘Beat Saber’ – the popular VR music beat game. No word was given on Beat Games’ involvement with this project after pulling ‘Beat Saber’ from VR arcade usage in the West.

Regarding the music game scene, Chinese developer ARCCER Amusement revealed its new platform, ‘Dance Battle’. The system not only tracks the players’ feet on their illuminated dance floor, but also the arm movements of the two players as they dance to the game. This is seen by ARCCER as a new generation in the popular music game genre.

Another of the packed show halls [UNIS]

ACE Amusement has been gaining Western recognition through its representation by UDC, and the company was on the AAA’21 show floor with its latest games, including a two-player game where the players roll their character on screen to push out their competitor. The game uses a large trackball-style interface to control the characters and two cabinets are able to be connected for four-player action. This is a genre of game that has been seen from other manufacturers. ACE also had a plethora of its water splash shooting screen games for younger players. One of the perennial trends of the show was the popularity of crane games, with hordes of different designs as seen on the vast Season Amusement booth – interest in the skill merch dispensers is seeming to not diminish.

Along with the VR and amusement, other new technology made a showing on the expansive show floor. The deployment of Projection Mapping and MR experiences were seen, with exhibitors such as Sindrax Technology showing their kidtainment based interactive floor and wall projection systems. Several other exhibitors also promoted this approach, with the deployment of several new facilities using large interactive wall projections, demonstrating how the genre is growing in popularity.

AAA’21 covered some 60,000sq.m. of showroom space, attracting over 1,100 exhibitors. Along with the amusement and attraction, the VR/AR Conference was also held in parallel to the amusement and attraction event, as seen in previous years, and this event also saw VR headset developers Pico, 3Glasses and DPVR, along with HTC supporting. Regarding technology trends, Augmented Reality (AR) was seeing a revival in the attraction scene. One such example on the AAA’21 show floor was ‘KUN’, a multi-player AR karting experience. The players sit in electronic buggies and steer around the space, blasting their fellow players – the action is represented through the AR glasses system. This is remarkably similar to a concept experimented from other developers such as Meleap, although the hope is that this new system will be released.

One additional element incorporated into AAA’21 was the inclusion of the Self-Service Technology & Vending Summit. Along with more traditional vending business, several examples of robot vending systems and robotic serving systems were seen – illustrating the growth of interest in Machine Learning platforms. Another interesting new trend in “Vendertainment” was the appearance of 3D-Printer vending stations, allowing users to insert their designs to be rendered by the 3D-Printer inside, with examples seen from manufacturers such as Miniwow.

Regarding the Japanese amusement scene, and the much-speculated restructuring of the amusement factories in the territory seemed to continue, even while the business continues to languish in the local lockdown. After reorganization of executive roles at KONAMI, SEGA, BANDAI NAMCO, now TAITO announced there would be a transfer of director with the positioning of a new President. The company stated that the changes in the board were to enable the execution of a newly-formulated strategy more quickly and reliably. This seems to suggest that major changes are to be undertaken in the structure of the operation.

TAITO is owned by parent company Square-ENIX (who reported its highest revenue at ¥332 billion ($3b) for the fiscal year of 2020), with this wholly generated from its consumer game business. For the amusement subsidiary, it is expected that the loss of business from the extensive ‘TAITO Station’ chain of amusement facilities, as well as overall impacts to their core businesses, will force the operation to make considerable changes – we will report on those changes when they are announced.