Question: A good friend of mine used to say that good interactivity is more important than good graphics. We see things like Angry Birds become huge hits, not exactly high-end graphics there. Do you think one is more important, or do they both go hand in hand?

Allison: Beat Saber isn’t really a technological wonder, but it’s really popular. Another thing that makes it confusing for me is that it doesn’t really need to be in VR. Why is that game in VR? But I’m in there all the time playing it, so there must be something pretty awesome about it.

But yes, that’s another example. You need something fun and engaging. The way it’s designed, how you grow your achievements throughout, is really addictive. Certain games are better at it than others. You don’t need to have incredible graphics unless that really enriches your story, or you have three years of development to really polish it.

Oculus Quest

Above: The Oculus Quest sits behind the Touch controllers.

Image Credit: Oculus

GamesBeat: The Oculus Quest is interesting in that it’s not high-end. It can’t do what the Oculus Rift can do. But it may be good enough anyway, because it’s the only thing that lets you swing a lightsaber around with two hands, 360 degrees. It’s no surprise that they have a Star Wars game to show it off. I feel like the opportunity there is to be something like the Nintendo Wii of VR. If they can capture that market, Nintendo has shown that there’s a large group of people out there who don’t demand the highest-end graphics.

Question: In the traditional mobile gaming space, free-to-play is a very popular business model. You charge for cosmetics and extra content. Is that a viable business model for VR game content?

Fallah: We think so. Once we reach a critical mass of players, that will be a viable business model, depending on what your game does. We were talking earlier about sampler games. Free-to-play games are always easier because we have such a small market right now, and a demographic that isn’t as willing to spend a lot of money. They come in and take a look and hopefully see some things they like inside.

We have a few games that are coming out like that and doing well by VR standards. Maybe not by mobile standards. We talk about eight-digit numbers when we talk about mobile. But it is viable in the long term.

Allison: Personalization will get bigger as the platform moves forward. That’s a big area of microtransactions. It also depends on how in-game or in-experience purchases are done through your interface. People find it really obnoxious to be immersed in a world and then all of a sudden they’re asked to purchase something. That might not work well in VR. It depends on how well it’s woven into the experience.

Question: Where is most of the developer investment going toward now? Is it the lighter, mobile headsets, the 835s, or is it desktop?

Fallah: Right now we’ve heard about some VR companies getting investment recently. Revolution Games got some nice investment. You have the Magic Leap products coming out, and some others. But really, most of the money right now is going to AR. Part of the reason for that is that AR doesn’t have the limitations in VR that we were talking about earlier. The platforms are much more open. AR is more robust. People are more familiar with it. It’s more usable for the regular user, outside the VR demographic we were talking about.

Having said that, all of our new products coming out in 2019 and onward will incorporate AR and VR together. They will not be separate products. We’ll have AR wearables out. Several will be coming out over the next two years. They’re intended more for the regular user that just wants utility applications, rather than a full entertainment suite. But we don’t think VR is going away.

Part of the reason we want the higher-end graphics we were discussing is because the lower-end graphics are appealing mostly to the demographic like me, Gen X and before. We don’t mind if a game doesn’t have the greatest graphics. But we find that the newer generation, the ones that we really want to bring into this, they can’t afford as much, but they want to have the higher-end graphics.

The new way of living is different. People cohabitate with more people in their houses now. We realize that privacy is hard to find in today’s world. VR, by its nature, is kind of your own little private world. You can live with five roommates, but then you put on your headset and you’re alone in that world. Believe it or not, the top three VR applications, to this day — and we have more than 10 million users on Samsung VR, so we have pretty good numbers — are still services like Netflix and other movies. We can cross-reference with other things and find out that a lot of these people have our beautiful high-end TVs in their homes. Why are they watching on the VR headset? Because that’s easier for them.

Above: Samsung’s Gear VR headset and Oculus-powered controller.

Image Credit: Ken Yeung / VentureBeat

Allison: My friend has it next to his bed, with his wife. If she’s sleeping he can still watch something without disturbing her.

Fallah: Every week it still amazes me. “They’re watching so much Netflix in their headsets. Why?”

Allison: Because you can isolate yourself. Like you said, it’s about privacy a lot of times.

Fallah: And that’s the wave of the future, more and more. Anybody who lives around here is probably familiar with that. I grew up in San Francisco, and I’ve watched privacy gradually go away in San Francisco. That’s why we need the better graphics, the better solutions.

People ask if mobile is the way of the future. Not mobile in the sense of, it’s attached to a phone. But mobility, yes. VR has to be able to go with you. Whatever the headset is, for it to go mainstream you have to be able to carry it everywhere with you, with or without a phone. Four or five years from now, that will be a reality.

The new Vive Focus 6 degress of freedom dev kit and controllers.

Above: The new Vive Focus 6 degress of freedom dev kit and controllers.

Image Credit: UploadVR

Question: I opened a VR arcade in 2016, about six months after Vive came out, and we’re participating in the first Archangel arcade tournament. Our guys won in the second elimination round, so I’m really excited about that. I have to say, one of the most exciting esports experiences I’ve ever seen was watching our two guys show up there. I hope that becomes a bigger part of the esports community.

As a VR arcade owner, what we really want to do is build the influencer community in our area. I was wondering if you have any tools or recommendations on how to build a VR enthusiast community in our area and get connected with local VR players.

Allison: It’s really cool that you bring that up, because we’ve been giving that a lot of thought as well. We’ve been thinking about, for example–with a tournament, if there are 16 arcades doing really localized buys on Facebook or any other social media, they can find people in their local areas to push them there. We’ve also talked about, with the next thing we’re doing, which is the Walking Dead, doing something that’s almost like a tour. Influencers are all over the world, but if you can find them and bring them together in one place, you can do events at places like an arcade.

There are lots of things to do. It’s just always about the budget. Nobody in VR is making money yet, so saying things like, “I’m going to throw a bus tour!” sounds really great until you start running the numbers and putting them in front of your boss. But that’s why we’re trying to find reasonable ways to get people interested. Things like point of purchase standees for your place where people can come and do a pose, something that brings people through your doors. Or events where we push people there even if we can’t go ourselves. We’re exploring it and we’re very interested. It’s just a question of where those dollars can come from. We’re open to ideas.