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Survios has been toiling away in virtual reality since 2013. The Los Angeles company has seen the hype cycle around VR since before Facebook acquired Oculus in 2014, and it has persevered through the slower-than-expected growth of VR in the past couple of years.

Other companies have pivoted into video games or enterprise VR, but Survios has stayed true to its roots in consumer VR games. And it has had strong titles such as Raw Data, Creed: Rise to Glory, and the newly launched Battlewake. It also teamed up with HBO to create Westworld Awakening, it launched a VR arcade, and its games are now played in 2,600 VR arcade locations around the world.

I met James Iliff, cofounder and creative director at Survios, in the early days of Survios, when it was showing off a demo called Zombies on the Holodeck. I recently interviewed him onstage at the Greenlight Insights VR/AR/XR strategy conference in San Francisco.

Here’s an edited transcript of our interview.


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Above: Survios’ CCO James Iliff will bring his virtual reality expertise expertise to GamesBeat 2015’s VR panel.

Image Credit: Twitter

GamesBeat: We go way back.

James Iliff: 2012, 2013? Some of the stuff was already out there.

GamesBeat: Yeah, with your zombies-on-the-holodeck demo. Can you talk more about your background?

Iliff: Certainly. I’m the chief creative officer at Survios. We’ve been around since about 2013. We focus on making software for virtual reality experiences, first for home retail environments, and now we’re building a lot of stuff for arcades, which is a big new business for us. We’ve brought about seven products to market. The latest one is Battlewake, a pirate ship game, as well as Westworld, a game we did in conjunction with HBO. That’s more of a story-driven, linear campaign.

We have a wide range in our portfolio of games. We like to do different genres where we can, different types of mechanics. A big piece of my work I focus on is working with the engineering team to create new interaction technologies, new UX technologies, so every one of our products has a new piece of tech that pushes the industry forward on the software side. For example, we had a racing game with a new locomotion method. With our latest game, Battlewake, we had a new vehicular locomotion method. There’s a lot of different things we like to do to expand the industry where we can.

GamesBeat: You have your own VR arcade now. What do you call it?

Iliff: It’s the Survios Virtual Reality Arcade in Torrance. It’s our testbed.

Watch out for the Kraken.

Above: Watch out for the Kraken.

Image Credit: Survios

GamesBeat: Was that always part of the plan, or did that represent a late-breaking pivot, doing arcades?

Iliff: It certainly wasn’t at the beginning. I think probably around 2016, 2017 we started looking at the market and realizing that although home users — there’s a large retail market and steady, slow growth, but the arcade market, when we really caught wind of it and paid attention and started researching, was a smaller market, but it was having exponential growth. It’s growing much faster than retail.

This is around the time where we wanted to start making games that functioned well in arcades. We were building games for home users that had very advanced mechanics and very layered mechanics. That’s fantastic for someone playing at home who wants to get a lot of hours out of a game, but it’s not necessarily something that a new user in an arcade can pick up and play very easily.

We started to adjust our thesis and started to build some of our content for arcades first. We knew we needed a testbed to actually make sure these games are what users want, so that’s what we created. We opened up an arcade that’s around 2,000 square feet in Torrance, at the Del Amo Fashion Center, which was a great place for us demographically and geographically.

GamesBeat: There’s a lot of different kinds of VR arcades out there right now. What was the design philosophy for what you wanted to do?

Iliff: With this one, we wanted to establish a strong foundation, a strong baseline for research. We could funnel all our games through, get user testing done, understand the users in a natural arcade market. This is in what are essentially bays with full motion VR hardware. We’re starting to explore free-roaming as well. A lot of arcades are doing that, and also larger, fully immersive experiences, like what The Void is doing. For us, those aren’t standard technology stacks. We wanted to focus on one that was a standard set we could put our games through, get feedback, and ultimately optimize our games so we could sell in the arcade market as well as at home.

You can summon a hurricane in Battlewake.

Above: You can summon a hurricane in Battlewake.

Image Credit: Survios

GamesBeat: You’re in about 2,500 different VR locations now, right?

Iliff: The one in Torrance is our one owned and operated location. We also have about 500 direct relationships with arcades here in the U.S., and we have about 2,500 arcades in a network in China through our joint venture with NetEase. We’ve also been opening up other joint ventures in Japan and Korea.

GamesBeat: I didn’t know there were that many places in China. Is that everywhere you can be?

Iliff: Essentially yes. Every major city, every corner of every city. It’s a lot. Part of that–it seems weird to us. There’s, what, 500 Chuck-E-Cheeses in the U.S., but there are thousands of these iCafes, PC bangs and whatnot on the other side of the pond. What’s interesting is they never had the console generations. They never had that home user focus. A lot of their market — teens and millennials over there — they’re very accustomed to going to internet cafes or PC cafes and playing their games there, in an arcade format. Because consoles never existed, really, until just now — obviously the rules have changed recently — this has just been growing ever since. They have a lot of arcades.

GamesBeat: Running people through gets you all this information, but if you’re in 2,500 locations elsewhere–can you extract the kind of information you really need only from what the owned and operated location elsewhere gets you?

Iliff: We have a lot more fine tuned control over the owned and operated one. We can change layout. We can change how customers interact with the hardware and how onboarding works. We still get a lot of customer data, demographics data, from all of our arcades. We learned a lot about how birthday parties are a really big thing, and corporate events. Building a game that has multiplayer components to it, that allows you to have a group of 10 people playing a game together. That’s a huge thing.

GamesBeat: Can you get there with Battlewake, then?

Iliff: Exactly. Battlewake was one–that’s a game we made for arcades first. We did sell it at retail, but the focus was selling it into arcades, and it’s doing really well. We have several multiplayer modes. We have a four-person co-op mode where you can go through the campaign, and we also have an infinitely replayable proceduralized mission with four players. We also have a 10-player deathmatch mode called Plunder. You can have 10 people on the open seas, all in different boats, all battling it out with different crazy weapons. That’s a lot of fun for parties.

GamesBeat: Is it turning out to be a game that people will go back to?

Iliff: From what we’ve seen so far, yeah. There’s enough varied mechanics, enough different boss battles, enough different weapons. With this game, there’s a lot of stuff online about it, but the crux of it was we wanted to streamline the experience of piloting a ship without making you nauseous. We actually used some smoothing algorithms to make it more comfortable when you’re sailing on the ship and wrecking into other objects.

Anywhere you point–I can point forward and it’ll shoot the forward guns. It could be machineguns or whatever. I could aim left and it’s going to shoot cannons. I can aim left and it’ll shoot a mortar or flamethrower. You don’t have to pick up interfaces or look at different buttons and all these things to choose what you’re shooting at any given time. You just aim and it fires a different weapon based on where you’re aiming. That was an example of a streamlined user experience that was really vital for arcades.

GamesBeat: If you play any sailing game on PCs or consoles, you can’t learn it in just one session, right? How did you think about enabling people to learn this right away?

Iliff: Thinking about it from the ground up, making it as streamlined as possible. For our more legacy content, like our big action combat game Raw Data, that wasn’t originally built for arcades. That was made for the home. But we wanted to sell it into arcades, so we had to do a variety of changes.

This simplifies the difference in the customer set, but it’s a very different customer set. The one at home is a hardcore gamer. They’ve spent a lot of money on a PC gaming rig. They’ve bought a VR rig. They’re playing games, and they want core titles. The person walking into an arcade is likely a casual gamer, or even a non-gamer. How do you handle that?

For example, with Raw Data, although we had this very long profile progression across many missions for home users, where you can get upgrades and upgrade your character over time and get special abilities, instead we switched that to a match-based progression that we automatically rewarded to you in arcades throughout the course of a 20-minute match. I’m playing a match, fighting a bunch of robots, and within 2 minutes I automatically get my next upgrade. My character’s leveling up constantly. You’re slowly learning how to play the depth of the game over a short period of time because it’s introducing it to you in an easy way, instead of having to go through the longer, denser retail experience, where you have longer profile progression.

That’s one example of streamlining. Also the direct user experience, making it easier to pick things up and interact with items, just making some assumptions about what 90 percent of the users want to do. You have less optionality, but more focus.

GamesBeat: As far as the revenue side of things, what would you be willing to say about what you’ve learned from when revenue comes in? What are some lessons for people about that?

Iliff: We’re seeing right now that the arcades are growing at about three times the rate that we’re seeing in the retail market. Depending on how many partnerships you can have, that can become pretty profitable fairly quickly. We’re lucky enough to be able to expand rapidly, especially with our joint ventures. We’re not selling onto distribution platforms. We have direct licensing agreements.

At retail, the best thing we can say is to keep your budget in a certain place, where you can make your money back and then some. We’ve seen a lot of folks overbudget their titles. We try to hit somewhere around the $3-4 million range for our own original IP. If we’re doing licensed IP or work for hire, we can go much higher than that of course. But one thing that’s changing now is that I’m starting to see some companies go into traditional.

This is an interesting aspect of the industry that’s just now emerging. There are some examples of this, like Payday 2 VR. That’s a game that was traditional, but now has a VR expansion to it. Some folks are building games up for VR and for traditional at the same time. What this allows you to do is, if you’re selling to to the traditional flat screen market, you can have bigger budgets, because your revenue is going to be much larger and you can support unique, interesting, in-depth VR features that you otherwise wouldn’t be able to make if it was strictly a VR title.

Above: Raw Data from Survios is now on the Oculus Touch.

Image Credit: Survios

GamesBeat: How much is each person paying per session in arcades?

Iliff: That varies widely. It totally depends on the location and the partner. For us, we’ve done a lot of different pricing tactics. It changes every couple of months to test different things. Right now it’s around $20 for a half hour and $30 for an hour to play whatever you want. We just do it by time. Some folks have had success doing it by title, although that’s not what we’ve found for ourselves.

GamesBeat: Would you rather have a popular game in 3,000 arcades, or however many units sold at home? How would you balance that question?

Iliff: Honestly, the real golden goose is going to be the game that can do both. A game that can crush it at retail, that core users love, and also one that is streamlined and easy to use enough so that Grandma could play it at an arcade. If you can magically make that happen, there’s very few examples of this happening. We’ve seen it with Beat Saber and Super Hot and some others that have accomplished this.

You start to see a few aspects–this is going to be superficial, because this isn’t a substitute for good game design, but you start to see a few external aspects that are in common. For example, the game is often 180 degrees facing one direction. You’re not looking all around. You’re not exploring a larger world. You’re facing one way. Think about Super Hot and Beat Saber and how that works. For the most part, it’s all facing one way. Also, you’re not locomoting around. Things are coming in to you. The game comes to you. It’s also invading your personal space, so you get really strong depth perception up close. You have a more visceral experience.

I could go on. There’s a lot of aspects to these types of games that work great in arcades and also work well at home. The danger you run into, though, is making a product that’s lukewarm in both markets. It’s really important to focus. If you can find something that works great in both markets, awesome. But we highly recommend, at least with your first title, starting out and choosing one market or the other and drilling down on that.

GamesBeat: Our previous speaker was saying that it’s hard to get something you can play at home to work in the arcades, because people have already been there and done that at home.

Iliff: Well, it depends. There isn’t necessarily that much overlap. That’s totally true in cases where people have VR at home. They go to an arcade and they think, “Why I do I want to play these games?” For most of the walk-in customers–around 70 percent of the customers are just walk-ins. They’ve never seen it online or read about it. They’re just walking by. They’ve never played VR at home. They’ll be totally new to all of it.

That’s going to change over time as VR becomes more mainstream. But in a lot of ways we see both of these markets building each other up and actually bringing value to both customer sets over time.

Above: The Survios virtual reality interface.

Image Credit: Survios

GamesBeat: Do you have any desire to create something totally unique for the arcades, that gives the player an added experience they can’t do at home?

Iliff: Absolutely. That’s why I feel like our testbed, a very simple arcade–it’s only doing the most basic things we need to do to test our games. But incorporating other aspects, such as different immersive experiences–there’s scent devices, other types of haptics, hot air, wind, all these things. You can incorporate simple ride design into your arcades, or a full free-roaming experience. You can do practical set design and incorporate that. That can be very interesting.

As a business, though, you have to be aware of the throughput ceiling. If you invest a lot of money into doing some really heavy buildouts, and you can only put six people through it every hour, you’re going to hit a ceiling pretty quickly where your return just isn’t going to be there.

Question: We’re currently building a location-based entertainment at a VR startup, and I wanted to ask you, where do you see that industry in five years?

Iliff: One of the biggest ways you can do yourself a favor is keeping costs low, building a minimum viable product, a minimum viable business, getting it out there in the market, getting customers as quickly as possible. Having played the games that are out there right now and seeing where the market’s going, and then having one or two specific calls to action to get people to come to your business, things they can’t have at home.

If you have a unique, Instagrammable room with some practical set design that’s super cool, that attracts influencers. Or a custom interaction that you wouldn’t have with a normal VR headset. There’s a lot of haptic devices coming out that no one is going to have at home, but you can have that in the arcade and get people super stoked to come out and see the arcade.

That kind of stuff, having those unique items–you don’t want to go overboard, but if you have a few unique items you can put up at the front of the shop that attract walk-ins, that builds word of mouth and gets people talking on social. That can build long-tem value for you, even though 80 percent of your business is built on the traditional VR format with generic bays. You can have that 20 percent be special stuff that keeps you competitive in the market and can help your business grow over time.

In five years I think arcades will be a flourishing business. I also think that in five years we’re going to have cross-platform between home users and arcade users. We’ll have immersive worlds, interconnected immersive worlds like MMOs, building on things like Rec Room today and some of the stuff Oculus is doing. The arcade users will be playing with home users. People in the arcade will have a better experience, because there’s going to be more human beings to play with, since they’re also connecting to the home user ecosystem.

In that way, they’re going to be able to build each other up. We’ll have a very different experience where they bring value to each other, unlike in the ‘90s, when the consoles completely destroyed the arcade business. I don’t think that will happen anymore. I don’t think they’ll cannibalize each other. I think they’ll build and grow together in a unique way.

Above: Creed: Rise to Glory is a Survios VR game.

Image Credit: Survios

GamesBeat: What do you think of some of these other features, like Sandbox VR with its motion capture combined with its location? The Void has a space you can walk around in more. If you’re adding a feature that you can’t do at home, what do you think is the best feature you’ve seen?

Iliff: I can give you a very specific answer that I think is a strong synthesis of these different values. One value being, let’s have something unique that people can’t get at home, and then the other value being, let’s have a frictionless experience. How do you bring those two things together?

I love what Sandbox is doing. They’re building really high-concept, blockbuster content, which is going to be what millennials want. That’s super cool. I love what the Void is doing as well. It’s super immersive. You’re grabbing doors. You’re flipping switches physically. You’re interacting. That’s great.

There’s some costs to that process as well. When I go to stuff like this, I’m going to spend five to 10 minutes in a ready room strapping motion controllers to my body, getting a backpack on my back. It’s a high-friction experience. It enforces a model where you’re doing time blocks, where you can only put a certain number of people through every hour or half-hour. You hit that ceiling of throughput, maybe 200 people a day. Even if you’re fully at capacity, you’re not going above that ceiling. There’s a limited, non-exponential business model that comes from it. That’s the ceiling they’re experiencing now, and it’s going to be challenging.

I think there’s a lot of interesting stuff happening with, case in point, Oculus Quest. You can have a lot of the fidelity and the experience, if not more so, with the new finger-tracking stuff they’re doing. I don’t want to call it a mobile headset, because it’s more powerful than a mobile headset, and you also have motion controllers, but imagine walking into an arcade and all you do is just grab a thing off the shelf and put it on. You don’t need motion controllers. You have your hands. You just go in and it’s opt-in, opt-out. You can have as many people streaming through as they want, playing in a fully immersive world. There’s no throughput ceiling there. It’s zero friction.

That’s the world where, ultimately, I think arcades are going to win in a big way. It’s going to be synthesized with consumer hardware. Then you can add things like walking through an area where you get a blast of heat or some scent. You can add unique things. Maybe you have a little practical set design in your facade. You still have a hero’s journey that the customer goes through, like you would on a roller coaster at an amusement park. You’re going through a cave and there’s a video playing and exciting events are happening. You’re going through a journey. You can do all that kind of stuff, but you want it to be as frictionless as possible.

Question: If you build a game that arcades want to host, what is the royalty process like?

Iliff: It totally depends on whether you’re using a third-party platform like Springboard, or if you’re building your own licensed relationships. I believe that the common thing on Springboard right now, if you’re just uploading to Springboard, is they will offer it for six to eight cents a minute. They’re charging the arcades by the minute. If a game’s really hot they’ll go to 10 cents a minute. I haven’t seen it go much higher than that very often.

After that–I believe Springboard is 20 or 30 percent right now. Don’t quote me on that. I actually don’t remember. It’s somewhere in that area. They’re going to take a cut.

Above: Raw Data from Survios

Image Credit: Survios

Question: Other than the work you’re doing, the games you’re building, what are the games in the VR sector right now that are really impressing you?

Iliff: There are so many things where I love what people are doing. Blood and Truth is a big one. That came out on PlayStation. It’s so immersive, such a cool gangster flick, the classic London heist kind of thing. The interactions with the NPCs and the conversations are so realistic. It’s awesome. The combat is great. What more could you want? That was awesome.

I already mentioned Beat Saber and Super Hot, two fantastically successful games. Very fun, very tight gameplay loop. I also love Fruit Ninja a lot, playing that in VR. It’s very simple, very mobile-focused, but you can play for hours. A recent one that came out is Asgard’s Wrath, a very big triple-A experience with a lot of varied characters, a lot of varied environments. It has some really cool mechanics for shrinking that are innovating in a big way.

Some stuff that hasn’t come out yet that I’ve had a chance to play–our friends over at Vertigo Games are doing After the Fall, which is a new zombie-style combat experience, but not really zombies. It’s more like a winter apocalypse kind of thing. Not only is the creative very cool, but the combat’s very unique. I think they’re doing some really cool stuff with gun combat, innovating on combat. I’m super stoked for them.

Question: And then there’s this Walking Dead thing you’re working on now?

Iliff: Yeah, we’ve announced that. A big piece of that is we wanted to focus on close-quarters combat with zombies. We created this thing called the progressive dismemberment system, which is essentially gore technology. It’s gross. But pretty cool. You can do full impales. You can swipe at an enemy and cut all the way through at any point, so they’ll split apart. You can cut halfway through, and depending on your velocity and angle — we call it context-based physics — it’ll get stuck or lodged, and then it turns into an impale event. You have to pull your sword out.

There’s also a carving mesh, so you can carve the Zorro “Z” in their chest and it reveals all the guts and skeleton underneath. And then full dismemberment at any joint. It’s really insane. The mix of gun and melee combat is unique. We’ve built a lot of really interesting animations. You can clip your blades. You can do a lot of different stuff. We’re trying to get to a visceral experience like you see on the show.

That’s going to a whole new place. We didn’t want it to just be another zombie shooter where you’re just shooting from far away, or if they get up close you just waggle your weapon at them and they fall over. We wanted to do something that was–oh, you can also grapple with them. If they get close enough to bite you, you can grapple with them and hold them at bay. Then you can execute them or knock them back.

It sounds super gory, and it is. It might be the most gory game of all time. But it’s focused. That’s the goal. Our goal wasn’t to build a big open-world thing with different storytelling options, where you could have character depth. That’s cool stuff, but we wanted to focus this time specifically on combat. We’ve done that with other titles, like our Westworld title. We wanted to focus on combat and build out our combat technology.

You can control your fantasy characters in Westworld Awakening.

Above: You can control your fantasy characters in Westworld Awakening, the VR game from HBO and Survios.

Image Credit: HBO

GamesBeat: I’m curious how that Westworld title came about.

Iliff: We were talking to HBO really early on. Jonathan Nolan got interested in our work. It originally started out as an idea for a marketing stunt, to do a short experience for a smaller budget. But as we started iterating and designing and building out the storyline and playing in the world bible that Jonathan had created, all of a sudden HBO said, “You know what? Let’s double down on this thing. Let’s make it a stand-alone. Let’s do a real game.”

That’s what we did. It’s a survival thriller. You play as a host who wakes up in a narrative loop in an old mansion. You start out in something like a standard horror trope, where this masked serial killer is coming after you and have to hide and dodge them while you uncover the storyline around this mansion. You have several cycles of that, and then eventually you wake up. The whole first act is just that mansion, but as soon as act two hits — there are five acts — you wake up in the narrative design labs of the Mesa Complex, and everything is chaotic. Everything is going crazy.

That’s essentially the end of season one, where the host uprising happens. I’m trying not to spoil everything, but if you haven’t seen Westworld, go watch it. It’s fantastic. There’s a big buildup in season one leading all the way up to this moment where our game begins. It ties in pretty intricately with the TV storyline in a lot of cool ways. It’s a fun experience.

You will feel what it's like to be in a Sherman tank in Medal of Honor: Above and Beyond.

Above: You will feel what it’s like to be in a Sherman tank in Medal of Honor: Above and Beyond.

Image Credit: Respawn/Oculus

GamesBeat: What did you think of the Medal of Honor VR game? They’ve been working on it for two and a half years. It’ll be three and a half years by the time it’s done. They said there were 180 people working on it, and there are 50 levels. That seems like–I mean, Oculus is funding it. But it seems like way beyond the budget that anybody else could even come near right now in VR. I think that’s a fair statement.

Iliff: That’s a very fair statement. Employing 180 people for two, three years–

GamesBeat: Do you think you’ll ever get there? Or do you not foresee that happening for quite a while?

Iliff: Well, it depends. I don’t know if I ever want to get there. I’ll be honest. I don’t know if I want to be running a ship that’s 180, 200 people strong, where you’re putting all your eggs in one basket for two or three years. God bless them for doing that. It’s awesome. The market needs it. Let’s build these big triple-A games that are 40 hours long and are huge and awesome.

Personally, for what we’re doing, we’re able to focus. Because we’re smaller and more nimble, we get a lot more bang for our buck, every dollar we spend. A lot of times these big studios that are used to making big triple-A titles, they’ll have a lot more overhead, a lot more things that have been in place for so long that it’s not the most efficient way to make a game. A lot of the stuff we’re making, we can make something that only costs us $5 million, but it looks and feels like it’s $20 million. A lot of times with big studios that have been around a while, they’re going to be less nimble. Their $20 million looks like $20 million.

There’s an advantage to being small. I think our preference is to stay nimble, stay focused on what the market needs, and build games in that range.

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