XRSpace Hoping to Make VR More Social

XRSpace recently announced its plan to launch a virtual world/social platform, Manova, and a standalone Virtual Reality (VR) Head-Mounted Display (HMD), Mova, in 2020. XRSpace is headed by Peter Chou, a former CEO and co-founder of HTC, so the “pedigree” is certainly strong with XRSpace, although there are some potential hurdles. The Mova HMD will include hand tracking out of the box and will notably offer 5G (and LTE) connectivity—it is based on Qualcomm’s Snapdragon 845 platform and is targeting a price of US$599. The social platform takes the form of a virtual world and has drawn comparisons (at least in vision and ultimate goal) to something out of the novel and movie Ready Player One. Manova will support both public and private areas for entertainment, work, and socializing, including branded corporate areas, personal virtual home spaces, places to exercise, public events (e.g., sports, concerts, etc.), learning centers, and other spaces. The global launch is planned for 2020, will begin with telecom partners Deutsche Telekom and Chunghwa Telecom, and will later rollout to Europe, the United States, and China.   

Oculus’ success with the Quest standalone HMD bodes well for XRSpace’s Mova HMD—it is based on a newer Qualcomm platform and supports Six Degrees of Freedom (6DoF) experiences and hand tracking natively, a feature that was added by Oculus for the Quest but was not available at launch (although it will arrive at the higher price). 5G is a differentiator, but it is unclear if the often-demoed VR applications (using 5G) will materialize and offer enough value to encourage upgrading to 5G and/or paying higher fees for next-generation services. VR, by nature, due to its occlusion of the real world and the relative bulkiness of its hardware compared to some Mixed/Augmented Reality (MR/AR)-based implementations, typically finds use cases within private (both personal and commercial spaces) or location-specific indoor environments. 5G VR demonstrations initially showcased applications in public transportation (e.g., VR experiences on buses, taxis, etc.) and autonomous vehicles, but neither application currently represents significant opportunities in the near term due to limited content and willingness in relation to current generation HMDs and a protracted timeline for mainstream availability of autonomous vehicles. The focus, therefore, has shifted to cloud and remote connectivity but, due to the aforementioned use of these devices within the home or office, the value for remote connectivity may be limited, at least beyond remote training and applications like tourism or group activities (e.g., exercise/meditation, education, etc.). If the use of cloud VR allowed for much cheaper HMDs then the value proposition would change, but this is not the case with XRSpace’s initial product offering.

The virtual world, Manova, has a grand vision, and while the company cites its VR first approach as a differentiator from past attempts that either failed or didn’t live up to their promises/vision (e.g., Sansar, Sony Home), it could find the market challenging; High Fidelity cited the limited installed base of VR hardware as a critical problem. In addition, if XRSpace’s solutions create a closed ecosystem (as early reports suggest) it will only compound the hardware issue, which will severely limit the value of a social platform like Manova. There are certainly opportunities, much like those highlighted in a previous ABI Insight, Immersive Communications and Virtual Goods—Pointing to a Virtual Future? (IN-5788), which discussed virtual goods and currencies and the possibility of significant self-expression (and brand exposure) through virtual means. While that ABI Insight looked out to a longer-term horizon, there are plenty of examples to reference, both today and historically, where virtual goods/services and cosmetics have generated significant revenue. The need and increased demand for communication and collaboration tools among remote workers has also spurred interest and demand for these types of video services, hardware, and immersive collaboration platforms as well.

A common sentiment from the COVID-19 pandemic points to the tendency of a significant market stressor to accelerate certain market trends—this could be the adoption of Over-the-Top (OTT) services (and cord cutting) or, germane to this ABI Insight, the adoption and use of virtual communication and social tools and services; while it is a necessity now, there are certainly individuals who were introduced to these forms of communication and will continue to use them, and there have already been long-lasting changes to company policies that reflect this changing landscape: for example, Facebook announced it would allow employees to work remotely indefinitely and Google extended its remote working option through the end of the year.      

The success or failure of XRSpace will rest with its willingness to support the widest range of devices, services, and platforms. The desire and admittedly large market opportunity to build and control/manage a “metaverse” that serves as the confluence of the virtual, real, and Internet worlds is understandable, but if such a future awaits, no one company will control or build it. Following a relatively strong 2017, the VR market found itself in a precarious position as consumers lost interest and companies started to look toward the next, next big thing. The VR market, however, is proving to be more resilient, and recent successes such as the Oculus Quest and game titles like Half Life: Alyx are bringing renewed attention to the market. The recent pandemic has also broadened IT departments’ and companies’ horizons when it comes to exploring new technologies, including immersive.

To continue cultivating the VR market, the industry needs to focus on as much cross-platform and service support as possible—it cannot support, let alone thrive with, multiple separate ecosystems competing with each other. From a developer’s perspective, the fragmented market would not yield enough value to merit significant investment, and for the users it would fail to live up to its potential and promise. This was the fate of many of the early virtual worlds: limited developer support engendered a space with too little to do to keep users engaged, and the resulting attrition only put more strain on the already tenuous social network. Second Life from Linden Labs remains a bright spot in this segment of the market, but replicating or extending its success to new markets has proven difficult. This does not mean XRSpace is doomed to fail; rather, it highlights the challenges the company faces as it seeks to build upon its rather grandiose visions for Manova, especially if it seeks to keep its ecosystem relatively closed.

There are, however, some additional positive signs to point to that could help the VR space in general and XRSpace if its platform is opened to a wider breadth of VR solutions. There have been some lower cost VR viewers—devices tethered to an external device for processing/battery/connectivity—hitting the market, with many of the launches originally expected in 2019 now targeting 2020. In its previous incarnation (as a smartphone holder), mobile VR failed to resonate with consumers and quickly fell off, although there are reports that these devices have seen renewed use during this pandemic as users leverage what they have at home versus in the office for things like immersive collaboration and training. The future of this class of devices, however, should it fully rise from the ashes, will be in the form of the viewers, which in many ways addresses the pitfalls from the holders. If pricing of these devices is well below standalone alternatives, while providing an equitable level of performance/experiences, then this could be the spark that the market needs to help make the technology more palatable to a more mainstream audience. This is also a much easier way to bring 5G into the VR market.

The pandemic is accelerating the interest in and likely the adoption of immersive tools and technologies, and if the device side can capitalize then the market opportunity for companies like XRSpace, or those in immersive collaboration, will grow in kind, but these steps need to occur as a unified industry.