VR's paths diverge: A question of scale

Last week, Bandai Namco opened the world's largest VR arcade in Tokyo - specifically in Shinjuku's Kabukicho, a rapidly gentrifying red-light district that'll be familiar to anyone who's played games in the Yakuza series.

VR Zone Shinjuku, as the huge facility is called, is set to operate for at least two years; it follows a more short-lived VR arcade popup on the other side of the city last summer. Bandai Namco reckons the new facility can handle about 1500 visitors per day, and while tickets are somewhat expensive (approaching $50 for a pass that lets you play a handful of games), the impressive line-up of Japan's most beloved pop culture IP that the company has built its VR experiences around means it won't want for customers. Mario Kart, Evangelion, Gundam, Ghost in the Shell and Dragonball Z are among the properties with unique VR versions at the arcade - catnip for both Japanese customers and many tourists alike.

Only a few days later, another development at quite the other end of the VR scale; hand-tracking technology firm Leap Motion received a fresh investment of $50 million, which will fund further development of hardware and software designed to translate precise hand and finger movements into virtual space. Leap Motion's existing hardware can be used essentially in two ways - as a small box that creates a virtual space above a desk in which hand movement is tracked, or stuck to the front of a VR headset to track a user's hand movements wherever they turn.

"We're rapidly heading back into territory the games industry hasn't been in for more than two decades - a situation where the kind of experiences that can be provided in an out-of-home arcade setting are materially, significantly different from those you can have at home"

What's interesting about these two news stories - otherwise related only by the VR buzzword - is the divergent paths they imply, at least in terms of the scale of the VR experience.

VR Zone is a big building (dwarfed admittedly by nearby hotels and the gigantic Toho Cinema complex across the square) whose games take up a lot of space; each is room-scale at minimum, with custom controllers, special rigs to sit in or attach yourself to, and in the case of its Ghost in the Shell game, an expansive play area for players to move around in that's all wired up for VR. The vast majority of the experiences you'll have in VR Zone (which Bandai Namco hopes to roll out in other cities and countries eventually) are experiences that the vast, vast majority of consumers will never have on a home VR setup of any kind.

Leap Motion, on the other hand, is building technology that's suggestive of a different future. It's not that their technology couldn't be integrated into room-scale VR in some fashion; rather, it's that it strongly hints at a future where VR hardware is far more small-scale and far less intrusive. One can think of Leap Motion's hand tracker as being ideal for "desk-scale VR", where the objective is to manipulate objects (for work or play) in a VR or AR space that's pretty much fixed to within a square metre or so; or for "sofa-scale VR", experiences that see the player staying pretty much still apart from head and hand motions. It's pretty much the far end of the spectrum from the "room-scale VR" people will queue up for at VR Zone, or even the "arena-scale VR" offered by the Ghost in the Shell combat game.

Recognising the divergence between these scales is important, I think, for a realistic understanding of where VR is headed and how it can fit alongside the rest of the industry. There's been a lot of fuss and noise around room-scale VR setups ostensibly aimed at the home - but it's extremely hard to see these ever being anything more than an absolutely tiny niche within a niche. Room-scale VR requires rigging sensors around a dedicated space, and even as the technology improves and eliminates wires, it's going to run into the same essential problem that Kinect had in all of its iterations - most people, especially outside US suburbs, do not have enough space in their home for this kind of setup, let alone enough space to devote an area to VR on a regular enough basis to make it worthwhile. Even those who do will only be getting a bare-bones version of the kind of experiences VR Zone and its ilk will provide; one interesting thing about those experiences is just how much custom hardware is set up for each individual game.

In other words, we're rapidly heading back into territory the games industry hasn't been in for more than two decades - a situation where the kind of experiences that can be provided in an out-of-home arcade setting are materially, significantly different from those you can have at home. The sort of games you'll be playing with a Leap Motion equipped headset, or a PlayStation VR rig, are simply not going to be the same as the sort of games you'll be playing in arcades; the physical difference between these settings is going to ensure that games are not simply ported across from one to the other, but developed explicitly with a target "scale" in mind. There will in essence be two different VR platforms, not in the sense that Vive and Oculus are different platforms, but in a much more fundamental sense; out-of-home and in-home VR will share some technology but develop along divergent lines.

It's even possible that we'll see one thrive while the other withers; it's worth noting that even with the relative success of PSVR, the existence of a major home market for VR remains largely hypothetical, and the paradigm of being "something you go to do with friends" rather than "something you do in your living room" could easily be the one that takes off. Meanwhile, desk-scale VR/AR tech like Leap Motion could well turn out to be more suited, in commercial terms, to workplaces than to entertainment.

"If VR Zone Shinjuku's initial two-year run is a success, the company may indeed have a formula that will achieve something long thought impossible - a revival of interest in arcades and a boost for the commercial fortunes of out-of-home gaming"

The rapid pace of change and advancement in VR technology - the displays and the various motion tracking, control and feedback systems which surround them - made it somewhat inevitable that there would be a settling process as the market figured out what to actually do with all this new tech. That's what we're in the middle of right now; VR exists, it works and it's really pretty impressive - now we have to work out in what contexts people want to experience it and, arguably even more important, what they're willing to pay for. High-powered gaming PCs with expensive headsets and room-scale sensor rigs are not a viable market; the question is to what extent you have to scale down that ambition to get to something commercially sensible, and further, in what contexts you can actually use all that cool tech to build something different.

PSVR looks like the sensible answer to the former question, for now, though what Leap Motion and other players are doing is also very interesting, and the question of whether it's workplace applications, entertainment applications or both that will drive small-scale VR is still an open one.

Meanwhile, Bandai Namco is the company making the most interesting attempts to answer the latter question. If VR Zone Shinjuku's initial two-year run is a success, the company may indeed have a formula that will achieve something long thought impossible - a revival of interest in arcades and a boost for the commercial fortunes of out-of-home gaming. Even in Japan, arcades have largely been on life support, giving over more and more of their floor space to UFO Catcher crane games and sort-of-kind-of gambling games each year; VR Zone could be the most important shot in the arm for the sector in two decades.

No doubt other players in the VR space will be watching its fortunes closely; how it fares will help to define the commercial shape of the VR industry for years to come.