We took a little trip down to San Francisco to learn about the current and future state of Virtual Reality. The industry has grown at an absolutely remarkable pace. Virtual or not, it all feels very real.

By Alexander Milton, CEO of Mostly Harmless Games

Quick introduction, the bloke writing this is called Alexander Milton. Hi. I’m the CEO of the Skövde based game studio Mostly Harmless Games, one of the four companies from the Gothia Incubator that travelled to California two weeks ago for a VR field trip. Together with Guru Games, Lone Hero Studios and Stenkross Studios we networked, studied, fraternized and pitched our way through Palo Alto and San Francisco for about a week and a half.

The main event of the trip was VR Intelligence VRX 2016, a two-day combined conference and expo with distinct VR focus. Companies and developers from all corners of this revitalized industry gathered to share knowledge, market their ideas and expand their networks. We were the only people not wearing suits.

VRX 2016 took place at the Mission Bay Conference Center in San Francisco.

Average length story short: VRX was pretty cool. We learned a lot, met a lot of cool people from all corners of the tech industry and got to experience an array of innovative applications of Virtual Reality.

I would like to summarize some of the biggest insights VRX gave me, in no particular order.

VR is a long-term investment. There’s no escaping the fact that the market is still extremely small. There are a very slim number of scenarios in which a game developer can expect to make decent money of VR games. This will most likely be true for some time ahead, basically until the market matures and grows. We have to expect up to a few years of draught. Developing for VR right now is all about positioning and gathering knowledge and competence, which naturally suggests a plan that spans for a few years ahead.

Tread lightly. This phrase means two things to me. First, tying back to the previous paragraph, do not invest too aggressively into an idea or project. Be ready and able to handle a complete flop, even if your idea is amazing and, without a doubt, super dope. Second, I interpret it as an urge to develop responsibly. The technical, physiological, mental and ethical issues that Virtual Reality may conflict with must be handled properly and respectfully, as not to deter users and risk sending VR back into the abyss. It has crumbled before and there are no guarantees we do not mess it up yet again.

Mobile is everything. Of course mobile is not everything. Did I say that? Seriously though, there are around two billion smartphones in the world, and the additional hardware required to achieve mobile VR ranges from $1 to $150. The mobile market is simply more available from a selling perspective. With Gear VR and Google Daydream out and on the rise, few companies can motivate developing PC applications. Of course, the topic is hardly black and white and there are plenty of reasonable reasons to develop for HTC Vive, Oculus Rift, PSVR and what not, but the general investment trends suggests otherwise.

Bring back the arcade. The idea of arcade halls and internet cafés is slowly dissipating in the western world; we keep our hardware in our homes. But in Asia, especially China and South Korea, the public internet consumption and gaming culture is still very much alive. In light of their private economy, we can predict that Virtual Reality has little purpose in the average Chinese household but enthusiasts will likely be prepared to invest in pay-per-play models at malls, cafés, arcade halls, etc. HTC Vive is already setting up their stations and competitors are popping up all around Asia. It’s not a bad idea at all to analyse, evaluate and target Chinese and other Asian demographics with arcade friendly VR games.

Hardware and tech is becoming hotter than content. Few investors are interested in looking at specific content. Steam very recently reached their 1000th VR compatible application in their store; absolutely nothing that can be considered saturation but just enough for venture capitalist and platform developers to start directing their eyes at other expansion possibilities. Seeking funding or investments for individual projects or non-differentiated applications is becoming increasingly difficult.

Visitors could play Arizona Sunshine on the HTCVive

Whoever creates a perfect narrative experience wins everything. Storytelling in VR was a hot topic at VRX. Everyone dreams of a VR experience that captures and strengthens compelling adventures such as The Last of Us, but no one has really succeeded at an adequate level just yet. Creating relatable and believable characters, immersive logistics and mechanics as well as nailing the story itself will be a recipe of enormous potential on the gaming front. It is only a matter of time.

Still looking for the killer app. As with most new technology, it is expected that the platform will boom thanks to a sole application. In my world, a “killer app” is characterised by an application or service that a consumer will be prepared to invest in the required platform to access. What game or program can urge a person to invest $800 in an HMD for PC? Or $80 for a decent mobile VR system? It is the general consensus of the industry that we have yet to discover the killer apps for Virtual Reality. I’m putting all my money on Harry Potter. I’m calling it. You heard it here first.

Those are the main things I wanted to share with you from my VRX experience. I hope you found this insightful and/or interesting.

Big thanks to Game Hub Scandinavia for letting me hijack your blog and your twitter account for a couple of days!

Want to keep up with my shenanigans? Follow me on twitter, @spelalex.