If there’s one company I’m going to be paying attention to, it’s Unity Technologies. The software framework company dominates the virtual reality landscape with its namesake engine. The San Francisco based company stands to be one of the major technology companies over the next ten years. Unity just closed on a $400 million investment following a $181 million dollar investment last year.
What makes Unity a player is that creators can build virtual or augmented experiences on its engine and then distribute it across most platforms. That makes is easier for creators, for gaming companies, for pretty much any type of industry that needs these new technologies.
Their CEO, John Riccitiello, is impressive. Formerly the CEO of Electronic Arts, Riccitiello has a clear vision of not only the company’s future, but the entire industry. He recently gave the keynote speech at Virtual Reality LA and laid out in a mentor-like fashion how what now we can call “XR” (extended reality) is, yes, coming on strong…but not quite as fast as many think. In giving out his reasons, he talked of the “Gap of Disappointment”. He gave out his reasons.
The first, of course, is the cost of hardware. Right now, price points can total $2000. That won’t work. Riccitiello tells us that it needs to get below $1000. I would agree. XR is a new concept…it’s not an extension of browsing the internet. But that’s not the only cost. We also have to take a look at the cost of creation and then distribution. Riccitiello calls it the “installed base of hardware”. The types of games and programs that will reach critical mass usage – basically top sellers – are going to cost a tremendous amount of money to build. $20 million to even $100 million. The problem is that, today, there simply isn’t enough devices for that type of investment. In fact, he tells the audience that if there isn’t around 100 million devices in the marketplace, studios won’t build it…because they realize that they won’t get their ROI.
So that’s why cost for us consumer comes in. If it’s not below $1000, it won’t work. The early adapters are likely to be the young. So the purchasers will be either people in the teens or their twenties…or their parents. That’s a lot of cash for people to fork over.
Companies can begin to invest now, but most haven’t played their hands because everyone is unsure about timing. What will the market bear? Should this be a holiday season item? What tactics will make people begin to purchase. Ricciteillo then tells us more.
Mobility. He notes, and I agree, is that people aren’t going to want to shell out a lot of money for something where they’re tethered down to a a laptop or a desktop. Especially if they are gaming. They’re going to want to move around. That’s the point of it, isn’t it? Being stuck with a six or eight foot cord significantly reduces the experience.
For Riccitiello, he says look for it to begin in 2018, but it will really come into fruition in 2019. That may or not be optimistic. I’d give it another year on both counts.
The three points are overall costs to the consumer…under $1000. At least 100 million units sold to start things out. And devices that allow people to be free of the constraints of being tethered to a computer. Not easy for any of them.
Either way, it’s increasingly clear that the future will be built on Unity.