VR will soon have its Commodore 64 moment - Schell

Virtual reality may be growing at a slower pace than many would like, but its enthusiastic supporters remain staunch in their belief that VR is still going to take off. Jesse Schell, CEO of Schell Games and a Carnegie Mellon professor, is one such person. His studio's VR puzzle title I Expect You To Die (IEYTD), which launched last December, just recently passed the $1 million revenue mark. GamesIndustry.biz caught up with Schell following the news to learn more about his VR development experiences and to gain some perspective on where he sees the VR/AR business headed.

"We've learned so much. The experience has confirmed our theories that making games specifically designed for the strengths of the medium is absolutely the right thing to do," he says.

"IEYTD works because we focused on protecting player immersion as much as possible: making sure in-game and out of game player body poses are proprioceptively aligned, ensuring there is a depth of interactive sound effects, and playtesting much more than for a normal game, so that you can respond to everything that players try to do in the game. The best part is that our experience confirmed for us that VR is amazing, and that people want great experiences in it."

IEYTD is one of a handful of VR success stories, but even "success" at this stage in VR's infancy when installed bases are so low, doesn't mean profitability is guaranteed. Schell is not deterred, however.

"We don't generally share specifics of internal budgets, but it was more than a million -- so, not quite profitable yet on a pure cash basis, but when it comes to lessons learned, and some of the other projects this has brought our way, this has been a very profitable project indeed," he explains.

"We had the Atari 800 and the Apple II, and they each cost over $1,000... A few years later, and we had the Commodore 64 at $299, and it sold ten times the number of units as the Apple II"

During GDC 2016, Schell gave a talk outlining his 40 predictions for VR/AR, and one of those was that by 2017 we'd see 8 million high-end VR headsets sold, with Oculus Rift at 3 million, PSVR at 4 million and Vive at 1 million. Clearly, the actual numbers are going to fall way short of these predictions, and a big part of that is a result of price. Even with the price cuts we've seen this year so far on the respective headsets, the devices are too expensive for many. It's only a matter of time before that changes, though, and then Schell sees the market really picking up. He likens it to the early computer era.

"The numbers are slower than I anticipated, and this is partly because prices are higher than I anticipated. But the growth is absolutely happening," he says. "What will create a tipping point will be a combination of price drops with a hit title, probably a social multiplayer title.

"We are in a time like when home computers first arrived in 1978. At that time, we had the Atari 800 and the Apple II, and they each cost over $1,000, and people said, 'Yeah, pretty cool, but too expensive -- these home computers will never take off.' A few years later, and we had the Commodore 64 at $299, and it sold ten times the number of units as the Apple II. Price will really be the driving factor. There are already hundreds of great studios making interesting content. When the prices get low enough, we'll see the growth curve take off." While a number of Schell's other predictions will undoubtedly not hold up, there are some that the designer is not afraid to double down on. The social ramifications of VR is one of those.

"My confidence in the power of social VR continues to grow," he notes. "Games like Rec Room are proving that out, and social VR is now the prime focus for our next wave of VR titles. The sense of physical proximity to a real person while you hear their voice and see their body language is powerful in a way that no other medium can touch."

Schell is also still a believer in Nintendo doing something in the space. Thus far, publicly at least, the house of Mario has avoided committing to VR/AR, but Schell thinks that Nintendo is working on a standalone device behind closed doors. And if a company with Nintendo's weight gets behind VR, that can only help make the technology more mainstream and more accessible. That said, it's not vital for Nintendo to get in the game for VR to succeed.

"AR may have more users in the long run (provided it can find some killer apps), but VR will be where the best gaming experiences are"

"With Nintendo's passion for invention, they must be working on a VR device with a unique Nintendo spin," Schell muses. "Certainly they can help make VR more mainstream, but they don't need to. There are already dozens of headset manufacturers, and more on the way, and exciting tech and price breakthroughs are being announced every few weeks."

While many people have predicted a far larger and more impactful market for augmented reality, especially as companies like Apple and Google get involved, the differences between the related technologies are beginning to blur. Additionally, when it comes to pure gaming use cases, Schell stresses that VR will remain the better tech for hardcore gamers.

"One prediction I am definitely rethinking is my prediction that VR and AR headsets would remain very separate entities. I am coming to believe that as VR headsets start to sport stereo cameras, that having video pass-thru AR experiences on VR headsets will actually become the dominant form of AR, because it will be cheaper and have a wider field of view," he says.

"When it comes to games, I more and more think that VR is to AR as console is to mobile... That is to say, VR will be more for the hardcore gamers who want deep, immersive experiences, and AR will be more for casual gamers who want lighter, less immersive experiences. AR may have more users in the long run (provided it can find some killer apps), but VR will be where the best gaming experiences are."

The unfortunate state of actual reality, when you consider global politics, terrorism, climate change and more, could also be a factor in virtual reality's favor. As Schell says, "In troubled times, people are always looking for places to escape to. The Great Depression was the best thing that ever happened to Hollywood. When people are frustrated with how the news cycle makes them feel, their appetite for fantasy experiences vastly increases."

As VR does become more popular in the mainstream, Schell thinks the media may start drumming up stories to point fingers at the tech in much the way that news outlets blamed video game violence for real-world crimes. "The media likes to scare us about anything that is new, because we always want to know about the dangers of new things, so it is good business to feed our fears. I can't say I'm worried about it, but it is certainly inevitable. Horror movies about VR gone wrong will be a hot ticket in the summer of 2019," he says.

"If you are ready to invent the most important medium of this century, and you can afford to be a little patient as the rest of the world catches up with your futuristic visions, this is your time"

One area of the VR industry that is hard to predict is the arcade or location-based segment. Vive has made a big push with its Viveport Arcade, particularly in China, but VR arcades may not necessarily be a more natural fit than VR in the home, as some have said.

"There is room for VR in arcades; I am sure of this because I helped developed the Aladdin's Magic Carpet VR experience that ran continuously at DisneyQuest in Walt Disney World for nineteen years! However, VR in arcades has many challenges," Schell says. "The systems are hard to keep clean, and are often too fragile for that environment. These are solvable problems, but not trival ones. Ultimately, people expect a VR arcade experience that is a radical step up from the home experience, and that is expensive to create, especially because there is an expectation of multiplayer gameplay at VR arcades, because people go to arcades to be in social groups. So, developing VR arcade content is very expensive. Arcades are a great intro to the experience while the tech is new, but as the tech matures, it will be much more at home, uh, at home."

Getting into VR development is not for the faint of heart. Game makers may have to endure some hard times, but the pay off will ultimately be worth it, Schell believes.

"If you are looking for a short-term win, or to just port the same games you've been playing for 20 years to VR, go do something else. But if you are ready to invent the most important medium of this century, and you can afford to be a little patient as the rest of the world catches up with your futuristic visions, this is your time," Schell says.