XR: X-plore, X-plain, X-amine

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of digital channels Harbor is a foundational technology loved by millions of Gamers and integrated into the communities of the largest mobile PC and web 3 gaming products on the market to learn more about this Flagship product simply head to harbor. or check out the details in the show notes and with that let's dive into the episode what's up everyone welcome to the novic gaming podcast I'm your host Alex te and this is of course the interview and insight segment So Meta said happy birthday to itself on Sunday February 4th and the company is cooking meta reported a lights out quarter uh sending shares up more than 20% adding 196 billion to the company's value the largest one-day gain in Wall Street history the social media ecosystem across Facebook Instagram WhatsApp and others helped to pump out 163 billion in operating profit this past quarter and of course what is meta doing with it well reality Labs um and most companies

could never burn think of burning you know $40 billion dollar over three years developing a new product but then again most companies also don't have a business that's turned out 160 billion of operating profit in a quarter to fund that investment and so while virtual reality has yet to become the actual reality for many meta owned platform users there's already some Fierce competition the Apple Vision Pro arrived in stores across the country this month and as of recording had pre-orders of around 200k and uh currently an known number of units sold at this point in time it's also prompting a wave of YouTube videos talking through all its interesting capabilities and the pros and cons as well as some hilarious hilarious consumer videos of people wearing it outside on trains and in their homes um Apple calls this a revolutionary spatial computer that blends digital content with the real world it retails for a hefty 3500 but claims to enable experiences never had before in the headset World neither virtual reality headset nor overlay a

lot of folks in games are wondering how this new device may impact the world of entertainment so I'm starting out with meta and apple and big Tech stuff today because although it's our mission to talk about xr's role in gaming across development and content it's important to remember that although the attempt to make an entertainment experience can prompt the creation of Technology you know something like graphics cards so content spurring tech technology and its rapid adoption can also spur on content creators so content spurring um so text spur content right and so smartphone adoption in the late 2000s um you know prompted an entirely new segment of the gaming Market but we've had VR headsets for a multitude of companies Oculus Microsoft Sony VR and a Litany of others and will the Apple Vision Pro be different and what do we actually foresee the XR gaming Market in the coming years looking like given Apple's new entrance What technological inflection points have we hit that are reforecasting our Baseline expectations and so today are we talking about XR and gaming and in order to do so I brought

on some experts in the space um my first guest is Taylor Hurst principal at Convoy Ventures and an occasional panelist on our roundtables Taylor has been following the XR scene very closely and I'm excited to have him share his thoughts on the space welcome welcome great to be here yay and so my next guest is Julian Park Julian is the CEO of bezzi a spatial design company that he describes as 3D figma Julian used to work on the Oculus OS back at meta and is going to be helping us understand the tooling side of XR in games welcome to the Pod yeah thanks for having me all right so before we kick off um I'd like to hear a little bit more about your backgrounds um Taylor we'll have you go first tell us a little bit about Convoy and your investment thesis around XR absolutely uh so yeah Convoy is a early stage gaming fund focused on preed seed in series a the major difference between us and I would say other gaming funds is we are actually not content investors uh so we do believe ourselves

to be technology investors at heart but obviously with a major focus in games we are on our third fund here it's a $150 million fund and uh based in Denver investing globally and obviously at this point in uh confo life cycle we are continually to Monitor and and invest in the XR space everything from new um new hardware shifts or different platform opportunities for uh Publishers of game distribution we we we truly view this as that that next stage in in gaming going from um I would say traditional gaming on other consoles or or PC to to a more immersive experience that is going to hopefully bring in a new generation of Gamers to a a new medium of um game content and and accessibility awesome yeah and I'm really excited to talk about um your guys's thesis around immersive experience one of our um topics that

we're going to get to today is a little bit of a VR future VR debate um and so I'm ready to talk about immersion and whether or not it's really important um and so Julian I'd love to hear from you next tell us a bit about your background and your journey to um founding bezi yeah um so I'm Julian a co-founder and CEO of bezi um it's a it's a collaborative 3D design tool and as Alex mentioned it's I think it's easily understood as like figma for 3D um so what that means is it's on the web so it's just it's like a browser app um that you can just access and open and start creating 3D scenes you know and a lot of what we see are are largely interactive so not just like sculpting 3D models or assets but like using these assets to like create these games or these apps um that you would then uh visualize and experience on headsets um so previously a lot of it was obviously The Meta quests uh but I think with the

Apple Vision OS coming out a lot of I'm I'm foreseeing a lot of different companies and apps and teams trying to like develop for the space I'm super excited um for that um and yeah with way of background I previously worked at Oculus um back when it was like Ulus go so Samsung Gear VR kind of T way before the the quest really started um and we're just figuring out like how the OS worked right because like I I think in the beginning we just had like a flat 2D rectangle of like blocks that people like play around with when you put on the headset and like to like actually open games and apps but our team was tasked with like all right how do we go from that to like an actual OS that feels more intuitive that feels more userfriendly um that I can actually open you know different apps and it's like a cohesive system uh and that's that that's where I uh really worked a lot with like designers and Engineers I I come from an engineering background

um a lot of PMs and I think during that time ju just to give you some some background on how bizy got started um designers would use tools like figma to kind of iterate on how these apps in the OS would look um but it's obviously a 2d canvas a 2d page so people would ask like Hey how do I visualize this in 3D and then the only like answer to that really was like oh I would have to work with a game engine developer like in unity or unreal to like really script out in C like this interactive prototype and that was just a way complicated process to like compile and package and side loaded on quests and stuff like that so uh what bezi does is it it takes that like convoluted multi-week process to a couple hours nice yeah that's awesome I'm super excited to hear a little bit more about how that's going to impact um game development and also yeah I'm just thinking back to like the Palmer Luke like Time Magazine cover and so it sounds like you're working on Oculus when there's like the millions of cords

and the and the the battery walking around tripping over the wires and so it's fascinating to see like how far the the space has come um okay so great to hear about your backgrounds um really excited to kick off the topic and so the way that we're going to start today is talking a little bit about XR and its subcomponents um XR is a obviously a term that is used to summarize a couple of categories um VR so virtual reality AR R augmented reality M mixed reality there's a new trendy word spatial Computing um and Taylor since you're our Market expert I would love for you to talk a little bit about the definition of these four things so VR AR Mr and spatial Computing absolutely um I I I think I I generally try to almost almost rebuck at them to where we we look at this as you know how how are VR and AR related and how is like mixed reality and spatial Computing related to each other

when when I look at AR and and VR and and how and how they work I think the the mo the simplest way to look at this is how do you how do you augment reality versus how do you replace reality and when when it comes to augmented reality the the the initial goal here is to to augment my my day-to-day life you know I'm I'm still interacting with that physical world with digital assets or digital experiences just augmented into that into that actual experience itself when it comes to virtual reality it's about completely replacing it it's about ersing iming sorry it's about immersing yourself into a completely new digital world um or experience and essentially taking yourself out of the real world and and being in something completely different and then you have the the spatial Computing and mixed reality side of this and spatial Computing I think is more about like how do we create an environment to allow for computing to interact with our physical world and then you have the mixed reality side of this which I I feel like is kind of this combination of um you know it's being almost able to go back and forth between

AR and VR and I think a lot of these have tons of overlap on them but there's this almost just you you could look at it as like a um of like how how immersed do you want to be in a digital experience almost as like Paradigm of like I need to be able to still interact with my ver my my physical world I need to put on glasses but yes I do want to have that extended uh monitor or screen that I interact with dayto day and then you get to the completely other side of the where I want to be in a completely different world and then everything falls everything falls within this in different in different ways that I think allows you to create different types of experiences that are built specifically for what you need in in that moment and it it does it does make it confusing because I think this is also why we have tons of different devices now that are all built for specific areas of of of this um of this market and that that's where it's it's creating a ton of different players and ton of different opportunities whether it's I'm an

Enterprise client or I am a consumer I I I want this to be for build for productivity or I want this to build for games and that that that's really the way I look at this is am I am I trying to just create a better experience and augment what I do on a day-to-day basis in my physical world or do I just want to completely immerse myself into a completely different experience in world right right and that also seems as you're saying to be relatively influential to the quote thing that you wear on your head um where you know for an immersive sense in the VR in the VR world where I'm we're replacing reality you're wearing something like quite intensive um like a supercomputer on your face which is why like it you know is we talk about the battery life we talk about the I get dizzy or I get nauseous right and then there's AR which is a little bit lighter because you're not leaning so much on the Computing you're still looking through that lens to see your own world um and so it sounds like you talked a little bit about like you know there's this really expansive categories they kind of

sometimes all blend together um you know Julian maybe from your perspective you've been watching this space Also from for a long time with your experience on Oculus you know what are the two biggest changes that you have seen happen over the XR space so far um you know maybe over the past five to 10 years well I think the just in terms of the technology and sort of the hardware aspect I think the the first thing that really changed was the shift from like PC to mobile f um and I think this was I mean it's good strategy because it's I think that's where it also allowed um like six do to also come in where it wasn't in the beginning Believe It or Not VR was this like three do uh doing degrees of freedom like experience where you didn't really track like physical space movement um and now we're sort of taking for granted this sort of six degrees of freedom you're like looking around you're moving around your room with like full sort of uh visual rendering on top

so you know I think those two kind of things change from a hardware perspective you know I think the sort of the the high level transition that we're going through is that it's it's going from it's transitioning from like a gaming console type of device to more like a Computing device and I think um we see that already with like the use cases that meta what for example put out around in like initially it was all like games right triaa sort of you like indie games or stuff like that they could play um but clearly with Apple's announcement it's it's more about Computing and productivity and workspaces and even like media consumption sure but like you know that's still kind of leaning towards like you know like entertainment and stuff so I think there's a lot um that we're seeing happen which kind of reminds me of how like like the original PC like Macintosh or like like the original kind of iPhone or you know a lot of these kinds of things like evolving in use cases and like kind of following the hardware form factor alongside that um I think that's I mean

it's going to happen again um with this device yeah interesting so to summarily put there's two changes that you've observed was kind of the shift from PC to mobile you know the technological inflection point there just being the power of the mobile device allowing VR to kind of move off being anchored to a um a rig somewhere like the way that Oculus used to be and also this like realization and I can't wait to talk about this in the VR potion that yeah games for VR is not the thing that may spur the adoption and people are moving towards this productivity space for generaliz computing rather than entertainment um and those are your those are your two uh Taylor do you have any different thoughts no I think um I I I think I would generally actually agree with with with Julian on on the majority of these points this is it's it's it is interesting to to to view this as As game was was really just

a I would say a wedge it was the it was the easiest um use case I think for VR when it came to trying to get that initial cohort of users to to adopt a completely new type of product and now we have that ability and we're we're obviously seeing a lot of companies like like meta with the quest Pro or or apple with their um The Vision Pro to to expand what those use cases can be within these these immersive experiences but gaming gaming seems always find its way um as as like an initial use case for a lot of different products and a lot of different um opportunities in different markets whether it's I I mean even you could even look at like the AI space today and say like you know a lot of the the GPU Innovation was how do I make my games look better and how do I make my computers more powerful so that I can do larger scale um experiences and now it's moved into wow these are actually should be powerful and now they have a completely different use case that's actually even much bigger than gaming and I think we'll we we're going to see a very similar process continue

to play out within the general XR space is that yeah let's you know try to get people to play games make it fun make make these new technologies actually enjoyable to use and then we'll actually find something that's probably a little bit more productive to everyone's day-to-day lives and that's just going to completely change the way people are going to have to build these U devices yeah makes lot makes a lot of sense and I think actually this is a good opportunity to start talking about the technology Baseline you know who are the players here and you know what are their competitive advantages um you know without going necessarily into the consideration of games specifically yet you know what are these Technologies unlocking in terms of what you're able to do um and so we talked a little bit about in the intro you know what meta and the reality labs supposed to be what the Apple Vision Pro is supposed to be but um and maybe Taylor this bouncing this back to you but like you know who are the actual players in the hardware space and and why are they going to win their category and whatever they're wanting their technology to do right

whether not that's for games or for productivity yeah absolutely and so the the way the way I think I can look at this is there's there's there's the software players there's the hardware players and there's like the integrated chip players they all play Massive roles and they all have extreme competitive advantages here I think the easiest one to look at first because it's it's not as competitive today would be the like integrated chip side of this this is like your qualcom of the World building the Snapdragon chipset it Powers the majority of headset that's out there Apple partners with them not only for their iPhone but also for the The Vision Pro itself and their competitive Advantage is honestly just their IP it is it as of today it is the best they they it is it is not a um it's it's it's a chip that's specifically Built For This you're not going to use this in your in your computer you're not going to use this in your in your phone even though you you could use in your phone for some AR capabilities but I I think we can go into that debate as well of is mobile actually even a good ecosystem for AR um but then you also have your this this cohort of headset developers

everyone from from Sony to to meta to Apple to HTC magic leap and they all have different I would say opportunities magic leap yeah and Magic leap yeah just just raised another another debt round to to continue to expand what what they're doing company for infinite funding yeah but and and the the competitive advantages here are essentially like who are they building for you have like your Hollow lens and your HTC vibe that is going to find itself more in like that inter Rise um that Enterprise market like a lot of employee training company or a lot of companies will use their headsets for employee training it's not the great it's not the greatest headset for consumers then you'll have Oculus that's building that likey we built the you know the Quest 2 and the quest Pro which um do offer slightly different um experiences but are still built for consumers it's either like yeah I want to I want to play VR games so I'm G to use that Quest too or I'm gonna or I do want to have more of a mixed reality experience as a consumer so I'm going to use that the quest Pro um you you have obviously PlayStation uh or sorry so you

have Sony which with their their psvr2 focused really solely on I want we you know this is just the game ecosystem it's our it's our next medium of of entertainment and obviously you have to be a PlayStation user to use their headset um and then you have magic leap as well which the way I view it is they are still building for consumers I don't know if it's ever going to get to that point um but what I but what I think is really interesting here is then you you do have this this interesting I think um this like issue that's happening the in the uh in the back end where everyone wanted to build their own operating systems I know Julian would have great experience in this with with meta I know they you know they they ended up having to shut down their operating system team um and move over to Android you have PlayStation with the orbit operating system you have magically tried to build their own operating system with uh with Luma but they've all they've all now shifted back to back over to Android which is essentially making them just pure Hardware providers now you have apple with the vision OS I mean their their competitive Advantage is always

their ecosystem it is it is purpose-built for developers and consumers alike it is it is what makes them so valuable it's why their brand is where it is today no one else gets to use that and that will always be their competitive advantages you know and if even you talk to mobile game developers it's like they just two different ecosystems it's apple and and Google being you know IOS and Android and then and then you can go to that next layer which is like who was just who is just providing software um and then you have like your Niantic and Google uh Google with you know AR core and I think it's Al also always good to highlight Google's geospacial which is part of AR core allowing for you know location based experiences they have one of the largest you know databases for um for like immersive Maps obviously through through Google Maps and then you have Niantic on the light chip SDK side and I think the competitive product being light ships uh virtual positioning system which is going to be core for creating more AR experiences and these are just going to be more integrated into different headsets so you have this

like you you have this massive Market of tons of R&D going into the space but it it really comes down to like who's who's going to win the the IC side the integrated ship side who's going to win the hardware side and then who's going to win the software side and I think we're still really seeing that play out but I I I really fall onto who's going to build that best consumer device and kind of hard to always kind of hard to bet against honestly either meta or apple in any in any of these cases and then Google just has the benefit of we already have Android everyone needs an operating system for their new headset you can you can you know Android's not technically built for for AR but there's a lot of value and a lot of developers building to create a Android you know AOSP version of um of Android 4 specifically AR who do you think uh Julian and Taylor right now if you had to bet on a headset for Mass adoption over the next five years um who would it be and

why I mean it's a I should let you go first Julian on this one uh no I mean I think well we have a couple data points to look at from like the world so far right like with mobile you know we know how you know iOS is the dominant in certain countries and then Androids actually in terms of number just like out sizing it globally I I think if there's a lot I don't think there will be like a singular company or product that's serving the whole world I I do see it as like kind of like what Taylor mentioned like the sort of spectrum or the sort of distribution uh depending on sort of tiers and use cases of devices um so my my bet I don't think this would be a hot tick but my my bet is that Apple's going to be sort of the premium sort of like um high-end visual Fidelity that kind of world and then meta is going to kind of own the the volume of it but yeah I I I wish I could provide a

counter argument to to Julian but I I just fully agree on this as well like apple and and I think Apple strategy here is just is so powerful to why they're going to be a major player in this space which is you know V1 of the Vision Pro is essentially a dev kit this is just get into the hands of early adopters let's get into people that actually want to test this stuff not the people that like they're not selling this as a consumer product that has expectations to be used by you know tens of millions of people all day every day that's just not where it's at today but getting something as powerful as as The Vision Pro in the hands of developers with a very open ecosystem and by open I honestly just more mean um a a a lack of saturation you know when you look at the iPhone there's you know 1.8 million apps on it you look at the The Vision Pro I think they just announced they're going to pass four or 500 but the these apps are are purpose Built For The Vision Pro and getting this into the hands of devel Vel opers is going to be so important

for them to continue to increase adoption going forward that that like I just think the strategy makes sense and it's going to work and I I would say I think Julian's also right with this it's like it's not going to be the same thing that happened in Mobile where it's Apple and Google it's going to be um it's probably gonna be apple and Meta Meta is gonna have that lower in device that one that's you know it's it's easier to to swallow um the the price point while while it's not going to be as powerful or probably as um you know as just Tech technologically impressive as The Vision Pro it's going to be much more easily adopted by by consumers and I think their strategy also makes sense from a you know games perspective like let's just get people in it it's you know it's the same essentially the same cost as a game console already we can get we'll we'll obviously get to the content debate later but those those are going to be at at you I would say if if I'm making a predition just today like those are the two players in here I think it's a really really hard thing for another startup to come into this space and and um yeah gain market share like magically

is going to struggle with this even even with all the money they have it's just it does not compare to Apple and meta's Bank yeah well I'm bummed that nobody said the Google cardboard um I do think I me I do think like like another interesting angle could be like the Google Glass angle where like more sort of like like prioritizing the form factor first right so it just looks like glasses but you got certain like digital content overlay or something like that like coming from that angle could be interesting but I just it's just so difficult to like get that to kind of Hit the right spot in terms of like use case cost distribution content you know all these things so that's why yeah and and I think it's also fair to highlight like pico here um and I actually completely forgot to mention them in the in the in the previous uh seg or PR previous section of this of this talk like I mean they they're going to have the ability to probably enter those those Eastern markets a lot easier than you know apple and and meta will be able

to it's just they they have that presence there we're already seeing Apple having trademark issues with the Apple Vision Pro trying to go into China and if I remember correctly I think it's 10 cent actually technically owns that that trademark in in China so there are like there's already concerns there and I and and I just think like that's just not a market that while it is a market that is always going to have the earliest adopters the East seems to always do extremely well whether it's in just general computing or even gaming um is probably going to have a a good opportunity there but I also do know that you know Tik Tok or B dance has you know laid off or at least cut back on uh cut back their their Pico budget at this stage but you know they're still heavily investing in that and they'll have a pretty easy time directly selling to to that market I see yeah um yeah and I think I really appreciate the perspective on like how we what we think the competitive advantages are also the separation between the chips and the software and the hardware um but Julian

I know that you mentioned you have an engineering background and I you know wanted to kind of ask you you know from working on a headset from the OS side you know if you're making a feature set for like AR VR and Mr devices you know what do they mostly all contain and what tech and skills differentiate them across haptics battery life controllers ey tracking gyroscopes these are all like catchy buzzwords that like I as more from the consumer side I'm like oh like would evaluate my headset this way but tell us a little bit more about that actual part from the engineering of the actual components in the hardware themselves I kind of uh want to use a metaphor with like our laptop uh sort of os um screens where I see AR as like floating windows like you know if you view your desktop background as like the real world um Windows Iron Man Yeah there theing Windows like on your desktop right now like with the browser

or uh just kind of overlay on top and I see VR as kind of like full screen mode so let's say you're watching Netflix or a YouTube video and like you want to go full screen take over the whole screen that's kind of like the immersive equivalent like when you're in VR um but my my take is that eventually like the long-term ASM toote is that we're going to end up with a device that can kind of go between these modes um kind of like how you know like but then you know it would have sort of the like the hardware capabilities to kind of create those Shades and like like give you that immersive VR experience but also kind of like lift them up and and like kind of make it feel like AR glasses that that's my kind of view on that um I think part so that's why from that perspective from a software perspective it just means the software just has to do it all in terms of like like detecting through machine learning like you're surrounded things and computer vision and like being able to have super optimized compute power

that it fits from a you know physical perspective but also not burning up your face uh but also having like audio capabilities but having software and an ecosystem around it and then having a software that's efficient enough but use your intuitive I I I think that's the north star that like like everyone is trying to like aim towards it's going to take time right it's like that's not an easy feat that once it happens it's like a huge moment for Humanity because now we like like the world is computer but you know that's like sort of a like a separate Point yeah no I see I see the I see the point because it's like all some of those things that I've listed right like some headsets contain those some headsets do not right and you're kind of talking about kind of maybe what the iPhone did where it's like this bringing of like a super super super device which was combined the telephone with the TV screen with the gaming device and so then it's just like all integrated one big headset yeah I I think that's what's going to happen because you know I remember like like years ago when I was

carrying both my phone and my iPod like in my pockets and I think at that time I was obvious like okay I want to listen to music and I want to call people um I think like eventually it kind of converged like into like one device and I think I just feel like from a consumer Behavior too like people don't want multiple things to take care of it just needs to be like one sort of single point and I think that's one's going to happen yeah and think uh this is also a good touching point to start talking about you know okay like that's maybe the North Star we want to be able to text and call and I want a full screen mode I want a window myself mode um to talk about what's been done with XR and what is going to be done with it um in the future and what are the new experiences that KY can create on potentially a super device right um before we dive into gaming content um I want to know kind of what XR is mostly being used for today um I'm fairly confident it's not for gaming um there seems to be a lot of use for it in training in the medical world athletes

productivity ahead of um entertainment content um and so Taylor I would love to hear from you do you know anything about the split of hours spent doing like ex certain behavior on headsets and sort of how are you thinking about XR as it's being used today well it it would have to come down to the the like the specific headsets in itself and so if we're going to take gaming out of this we would we would we would move into like that like what what are people using the like the hollow lens for or the HTC Vive and and those are like based on our research and our understanding of of that market and talking to some Enterprises that use these is no it it is employee training this is extremely important to them I mean I think we we could even go into the defense industry here um when it comes to like Microsoft's Partnerships with u with the dod like this is like they're they're providing AR devices specifically for um for you know wartime experiences and there's there's this like entire Market that I feel like people aren't really

looking at because it's like you're just like I think about VR games and uh but when you look at the XR space this is this is used yeah across medical fields and we've seen we've seen things from how do you almost retain patients better by being able to explain what surgery is going to look like or what the entire procedure is going to look like in VR like what are we actually going to be doing in the space or doctors going in and um you know initially like doing a like a a test run of a surgery before they actually go in and actually being able to use the the patient physical scans or I'm sorry digital scans to actually go in and say like hey this is actually what's going to happen this is what it's going to look like when we get in there let's let's work through this let's understand like what the what what the complexities are there and then you have you know companies like like Walmart uh coming in and saying like hey we have to train hundreds of thousands of employees on on either completely new hires or understanding new um new responsibilities and how we're going to go through that like customer service uh Pipeline and then you have you have massive opportunities like the oil and

gas space of um like I we just need to be able to better understand how we're going to um fix things remotely or being you know when we when when we when we um you know fix things today A lot of times like you know you get on a call with somebody and they say hey do you like where is you know do you see a red button like can you like is it on and then but now it's hey put the headset on like I'm going to talk you through this I'm going to actually see exactly what you're doing and I'm going to be able to actually like pinpoint things that you're going to be able to see within this this digital or this like augmented World exactly what you need to do it's not it's not me talking over a phone and hoping I'm I I can you know you're explain this to me correctly it's no I'm gonna I'm basically gonna see what you're seeing and then I'm going to be able to show you exactly what you need to do in this space and then you also go to like the pro just the general productivity space and I think that's where I would argue the majority of hours spent is within the Vision Pro this is I need I want to expand my screens I want to I right now I'm sitting here and I have one screen up with I think the majority of us believe I can't be productive with only one screen I have to have multiple things up

at a time but I also don't have the either the the physical space to do it or the you know the um the the capital to to purchase 15 screens but now I can do this and um I mean I think some of the cooler things I've seen in the Vision Pro is like hey I want to like I'm I'm working I have dinner being cooked I have my you know my my family's to-do list I'm watching TV as well and this is being done all through the Vision Pro at once instead of I have like four tabs up on my phone like or I have like you know I have Netflix up I'm scrolling back and forth between that I'm going back to my my recipe then I'm going back to my emails and so I do believe right now if you if you just if honestly if you just remove the Oculus out of the market I believe the vast majority is being is is being leveraged outside of games but there are just tons of markets and I wouldn't want to picate too much on like what those hours spent look like because I I would say I think it's probably over um overstated around like this like

employee training and like uh Enterprise use cases just because there's such a large U cohort of users at these or or cohort of employees that need to be able to use these and um and then on the defense side it's you know you're looking more at like a lot of privacy stuff and a lot of things that is not going to be public and but this has been used for decades already and all we're all we're doing now is increasing that that that technology uh like technology floor to be able to even do more stuff within those spaces yeah and I that makes a ton of sense and it's good to just get some grounding though like okay like what is the headsets being used for and it doesn't mean that it can't be used for gaming and we're I mean when with a when iPhone came out I mean you're mostly using it to communicate you're literally using it to call to text and to send emails like right like and that's a productivity device and then evolved into a gaming device over time so I think like now it's like you know it's time to go there and talk about XR and games right we've got some

good grounding on the tech the hardware the players right and so you know right now we are seeing a a funding into this content sector specifically for games you know whether it's for tooling or for contents side um you know eggscape entertainment being an example of this raising a 4.25 million seed round for a um party up Social mixed reality game uh basically kind of looks like you play your game at home in with your friends using like the environments that are in your house as part of the gamepl um and so I want to talk a little bit about uh what are the common genres that are being built in uh XR games right you know is it sort of like you know like eggscape or is it like Niantic Pokemon go we obviously have to talk about Pokemon go um you know so you know maybe Taylor and Julian if you guys have any hard opinions on you know the genres that you think are going to be the most successful or any kind of Market leaders now narrowing down to the tiny Market of games with an XR you know kind of what

do you think yeah I mean I think the the key here will be immersion right because that is sort of the the core differentiator factor from like playing a desktop game or a mobile game and so I think from an immersion perspective obviously there's sort of the like I kind of see it as like one end of the spectrum being like AAA photo realistic games where you're just like really in a world you're like in awe the whole time playing it right you're like running through forest and you're like whoa what's going I think that's like one end of the Spectrum in terms of immersion I I think there's the other side like kind of like the like the mixed reality game you mentioned where it it feels like I'm home with like a good group of friends or like you know in the other side of the world but like we're like sitting next to each other playing like a board game on the table right like I think there's like that kind of experience that's also coming out with like social with um um like different networks uh involved but I think there's I kind of you know that that's

how I see it's like I I see like the super immersive games that I would want to play because I want to be in that world and I'm like play I'm like running around trying not to die and being chased by dinosaurs or something and then like the other end which is like hey I want to be with friends and I want to play like a chill board game maybe Katana or something like that but like you know with some friends got it yeah I think I I I would say I definitely I I love the idea of how do we make board games more immersive um like the tabletop role playing side of this I think like those games really really work out because they're they're games that are already based off of how deep does your imagination go and like what is that what does that breath look like and can we almost create these experiences around like a D and D campaign where it's not just us talking about it and all of us picturing it it's no I'm G to like we we've actually built an experience it as we go through this that we actually get to watch the the battles that are happening or we get to watch our characters go through these different worlds and the other side of this which I I know is going to be somewhat of a hot take here um but it's it it's all within this umbrella of like

location-based experiences and I think when most people think of lbes they're like oh you're GNA go somewhere and you're gonna play VR like you're gonna like you know like a laser tag VR but the way I look at this is like eggscape is I think a perfect example of lbes I can go to your house and I can we can create through like presal generation our own Survival game that's based off of what your game look based off what your house looks like or based off what the room looks like and then go back to my house and it's it's completely different and that's something we haven't really had that opportunity to experience this is you know when you play when you play fortnite it's technically the same map outside of some general RNG around like where different things are are being dropped or like where potential uh like you know where the uh the battle bus is going to to drop everybody off this time but like the map doesn't really change as much and you do have games that have explored this different you know this procedure generation things like valheim for example where doing s or or Minecraft obviously like when you you create a new new experience like it's it's it's it's different than your friends there's no there's no one um One Stop Shop or like

one rule to to get to the end of it it's I can't I can't watch your YouTube video of you playing uh valheim and be like oh that's where that um you know that's where that sword is or that's where those materials are because my role might look completely different and I think AR has this ability to really really shape this space in a different way uh and I think so you're gonna like it's like I I think it'll all fall under this umbrella of lb but then you'll have like your survival type of games I've I've even seen really really compelling like FPS types of games of like what would it like you know Intruders come into your house and like yeah it's already mapped out your entire house and like you have to run through your own house to like get away from them or you know find them and but but I think that's what's one of the cooler things that can happen and then even with eggscape there's there's great opportunities here for um like Enterprises or businesses to get into this like you know you come to come to our store and we have our own version of excape and it's it's a great way to get people in the in the doors there and you know we've created our own version of it you can only play when you're here it's not a public map you can't you can't do this at your house but when you're here

it's set up based off the layout of our our place and I think like you know malls will do this as as a new way to get people in the door because obviously like that's malls are basically just you know big you know physical advertisements walk through see see hundred stores and hopefully you go into one of them and like that's why there that's why that real estate is or at least used to be very valuable and so it's like how do we get people to come back to these places how do you get people out of their houses and stop doing things online and Pokemon go I think did this initially which was yeah you know there was that that time period where you you'd show up on that corner when everyone would hear about this rare Pokemon that might be there and there'd be 50 of you or a hundred of you just sitting like everyone trying to get it and I think that's what I think AR is going to enable is like we're GNA get people out there again doing things and it's like I I don't want to I'm not gonna go outside of the park and and play mobile games I'm just going to do that in my own house but with they I might have to and so I think that's what's I think a lot of this is going to look like different versions of lbes that we haven't really thought about before that are going to be much more compelling than just you know going to another you know VR um location that

allows you to play laser tag with a VR headset on yeah and it's actually it's really interesting that you say that and um I hadn't really thought about it like that you know this difference of the mixed reality games or ar games basically allowing players to experience different Maps because in the same way that we talk about like games having really strong localization for the point of having personalization for the point of having connection right not only does this obviously enable you to go to your friend's house and play an entirely different version or but it also is like well I'm in Shanghai or I'm in Belgium or I'm in New York City and this experience is completely different every time right and the developer is not building that map right and so it's a lot less development resources to create and G give the player a new experience the player is kind of Outsourcing that work is being outsourced to the player and the location itself which I think is you know actually like really interesting and I mean I I definitely played some Pokemon go and it was hilarious um I never played any games

like Ingress or anything like that but um I think that this kind of the separation between the VR intense world of the immersion world and the AR world is really important because I think in the VR world you have an incredibly High development cost to make that you know I think Julian you said it like triaa High Fidelity experience but in the Mr AR World those things are a little bit like lighter and I think there's a lot you know personally again and I don't want to get to our our VR yet but I think there's a lot of potential in the VR space because of the things that you say and because when you build out that p&l right for development Studio those numbers could potentially turn out to be oi positive um and you knowbe that's obviously going to be um incentivizing developers to actually like build for that platform um and so you know I do want to talk about VR um in the last part of our segment here but you know we talked a little bit about the content consumer side but Julian I'd like to hear about your perspective on how you think you can help devs get there um you

know the how are games created Point um yeah and you talked a little bit about like uh in our kickoff about not only building gameplay Assets in 3D but gameplay logic without code um and so tell me a little bit about why you think about bezzi as an alternative platform to design games versus Unity why are you convinced developers need this um yeah you know what jobs need to be done yeah I see bezi as this um this player in a broader uh sort of transition that's happening in the creative industry in general which is kind of the center of gravity shifting from more production to like like the ideation or like the earlier phase of the pipeline and I think it's happening for you know several reasons one being like somewhat like the commod ization of the implementation of the production software so like you know it's common

for like different games to use the same game engine and kind of have like very similar sort of game logic or game play or implementation uh code but like be very different in like art style or characters or assets or sort of the general sort of community or you know all those things and I think that the differentiation factor is kind of Shifting up the chain in terms of like ideation and like gameplay design and like more sort of more around what we sort of commonly call creativity around like imagining different worlds and characters so I think on that note you know we've also seen this by the way with like uh like 2D stuff like 2D art right like illustrations in the past it's been like pixel by pixel sort of painting or illustration but now you're generating all these images or art uh that is you know focusing the differenti differentiation Factor on the ideation spee um and with something like Bei what it allows you to do is it has this sort of like infinite spatial canvas in front of you that um is you know it's the easiest way to to get your your ideas in

your mind like into uh digital reality and I think what that allows because of our like State machine and like all the interactive animations that you can also add on top of that um like like a playground version of the game um and it also handles like Source control with all the 3D assets that you would actually use and you can iterate without having to use like Dropbox Google Drive links everywhere and stuff like that but I think it offers this like source of Truth for the design kind of like how figma has offered a source of Truth for a lot of app designs for a lot of companies today um that I think then can be exported like into a game engine that Engineers can then kind of like really optimize and like Implement and stuff like that so that's kind of how I view the the content development pipeline evolving into over the next several years um for for a lot of companies just trying to create content for these new platforms with these new capabilities um and wanting to use these things but you

know not everyone in the team might know uh might know how to code right which is then a different way to approach the problem from more of the design angle um that's that's how I view it I see so it's like okay if I wanted to be um a game designer or a studio that wanted to build an AR VR Mr game I would need a way during the pre-production and creation ideation process to visualize what I'm going to create in 3D before moving to a game engine and so you see yourself very much as that like pre-production creative ideation process before moving into actual development yeah and I think the the important factor here as well is that with Fe because it's on the uh on the web browser um it it allows you to immediately visualize what you just designed or created on the browser through the browser on the headset um and so you're sort of cloud syncing

your 3D content your 3D scene and the gameplay and this environment um directly inside the headset before you even compile anything or before you ship any package and so I think that that's sort of bringing up chain like the the like the iteration process right so that when you're sort of more aligned as a team on the iteration process then you can ship it off to like Engineers so like really you know build it up yeah very cool um and yeah I think because again like you have to marry both sides of you know the tools that enable the creators to create what they want to create given if they want to make you know an eggscape or a VR game Etc um and so you know now obviously getting some grounding on the kinds of gaming content that's being made I do want to Pivot to our VR debate right um and so Taylor um the other day you said something very bullish about VR you said something to the of I believe it's going to replace the PlayStation 5 and other consoles

um so please explain and defend your position about why you think VR is gonna seplant the mainstream gaming console I I would I would view it more I I don't want to say it will completely replace him but I view this as that next medium of of consumption and and that's the way I think it has to go I I I I I truly believe this you you cannot look I don't think you can look at VR as a Computing platform the same way you would look at the Vision Pro um this is to me and the way I view this is it's a game console at at its core it will have other applications on it but the the general use case here will be this is for games this is for playing it's for fun um I think like socialization goes into that things like recck room or VR chat will be important to that um as as well where um and obviously you know your horizon world like this there will be those types of of like platforms that are that are or I would say just more applications that are part of that that

ecosystem but at the end of the day this is this is a game console and that's how you have to look at it and that's why we don't I I would say at Convoy spend as much time in the VR space it's just because that's how I view it this is like I I I I truly think there's for for for our funds thesis there's not truly like an investable opportunity here because we don't do content but VR really just it it it's going like when when we've moved across different different mediums it's like been new gameplay has been uh been created like I think when you look at like like uh like ARP a RPGs or um or like simulation games like they they they work they work very well on the web I think simulation games also in and arpg games also work very well on on uh on mobile but then you go into console and it's like no this is focused on like it's it's a different input method I have I'm holding a controller in my hand and I'm I'm probably going to focus this more on and I and I I would look at console as like this is just the perfect ecosystem for just playing games and I think just VR is going to follow that route clear

like almost to a te this is we're going to like meta is gonna continue continue to invest in um in app lab and continue continue to invest in more more games because that's that's how you win that's why PlayStation and Microsoft and Nintendo are here is because they have the best content that is that is why you go into each one of these ecosystems you don't you're not going into them for anything besides really the games that you can play Within those those ecosystems because that's what they're built for I would never send emails on my my Xbox I would never I I don't want to use zoom on my Xbox like that's like I'm not gonna I rarely go to the browser on my Xbox for for really anything it's like it's and that's why that operating system is usually not very built out for these experien but it's built perfectly for playing games and I think VR is very similar to this where success will be dependent on the content that's available in these ecosystems and specifically game content and it'll just it'll just be another medium you will have your you'll have your switch for your handheld device or

you'll have your or your mobile phone obviously which you know you look at it handheld as well you'll have your PC for for for you know games and also far more this is you know we all we all probably work on the same computers we play games on and then you'll have Xbox and you or you'll have PlayStation and then you'll have a VR headset they will all offer different types of games that you're playing whether it's on the go whether it's extremely hardcore whether it's um immersive and they will but they had to be purpose-built for those ecosystems and that's and that's why I think VR will just continue to look more and more like a game console it's just you're gonna The Vision Pro will be their their more General use case Hardware Vision Pro will be the hopefully at some point the everyday device that you use all day and then VR I put on when I want to play extremely immersive games Julian any perspectives to add to that no not really I mean I think I think I think kind of depends on how we Define VR um I think kind of going back

to the idea I had um around like kind of all these you know arvr MRX like all these things kind of being combined into one device I I I I think that is a possible outcome where like VPR just happens to be like a mode of this sort of like uh classware and then you just kind of enter into this mode where you can also play games immersively and kind of be involved in like kind of like the game console experience today um yeah I don't know like I don't know how exactly that'll play out okay yeah and and and I I would I would want to add to this that I I and I think it's kind of a copout answer but I feel it's fair to to say which is just VR VR really is it's just it's just gonna it's gonna enable those those truly immersive experiences because I I I also don't want to say it's only gonna have games like like just like you know the Xbox has I have access to my you know Prime account my Amazon Prime or Hulu or Netflix I watch things on it's it's an entertainment system at its core but obviously I buy you buy it for the games itself but then like Theos will have its you know immersive um you know Sports watching like whatever that is

like I want to sit Courtside you you'll be able to do that but I just do not think that will be the the reason why people are buying it they're gonna buy it for the games itself right yeah what's your take on it Alex my take okay here we go here's my take I'm the opposite I think VR is I could not be more bearish about VR um so first of all I've been following companies like magically since last like 20 since like 2013 um you know actually worked on some potential Oculus Partnerships at Activision Blizzard um that's obviously to no surprise to anybody right because the driving force is the fact that there is no content on the VR devices that is driving the compelling adoption of Hardware right and so it's kind of this little chicken and egg situation developing for the platform is too expensive the install base of the platform is too low to be a creative to a studio and so therefore no studios are incentivized to build for the platform and we continue to also lack the expertise in design engineering the

technical capabilities to actually build compelling content for the for that kind of genre and that experience this is very similar to how in China for example if you want to make money in games you have to build for mobile right which is why the PC and the console expertise in China is so low because if you wanted to make if you wanted to make games and you wanted to make money you would never make them for console and PC and therefore 10-cent net all of these big Chinese companies need to partner with studios in the west to gain console and PC expertise because they don't have it inherently within the own borders of their own country and so I think for myself we've seen you know VR being just around the corner for decades right it's you know people have been doing VR in games for kind of a while um and I think the quest ecosystem I think it's like 20 million north of just north of 20 million units or something like that um it's not it's not horrible right but the retention in VR products is is so low the and so

therefore you can't have this tale of monetization that you might have in a League of Legends a Call of Duty Etc um and I actually am a little bit and this is more towards maybe like Behavior but I'm not convinced that people really want immersion um we talked about you know Taylor you gave that awesome example of cooking while having your recipe up while on your phone while watching TV while also doing work with the Apple um Vision Pro and I think people want to multitask I actually don't think they want to be locked into a certain experience and if they do want to be locked into it they want to be locked into it for two to three hours and that is $199 um and that's it and then VR is dead there's there's my take um yeah what I would yeah what I would add there is like this is this is why I think meta has one of the biggest opportunities to be like to be the the Blizzard or you know the Activision Blizzard of of VR because I think you're completely right about this there's

there's not there's not a lot of incentive for developers to make that jump this is that's their livelihood they have to they're going to build games for an ecosystem that has the most users to where they're going to be able to monetize the best and one fundraising is extremely hard for for Content Studios within the the VR space so there's this there is this massive opportunity if VR is going to ever be widely adopted from a games perspective for someone to that that publisher whether it's you you could be that you look like 10 Center look like Activision Blizzard where just we're going to start acquiring Studios we're going to start funding them to build projects that they would never be able to have the capital or or Manpower or time to do and so like I like this is this is one of the issues I think it's it's had is it's like it's almost Indie developers you in a sense of like every like they're trying to build like they're trying to build experiences but but they don't have the they don't have the capital to do it and then they're taking that risk on an ecosystem that like you're saying is Rel relatively small it's not only small but the gosh yeah the the the underlying user metrics are just generally

terrible yeah it's like the games that the games that end up being successful are like I'm gonna buy this game for $20 and I know there's eight hours of gameplay like I think Shell Games is a great example of a like the ideal VR developer today they know like they build experiences like I have no problem paying $20 to play that experience and I'm going to finish it in in 10 hours it's linear it's and it's just and like that makes sense for me I can sit down also so I'm not going to get sick and like I can just play those games and so I would love to see Meta take some of that big R&D budget that they're spending on the actually building out the technology to say hey we're gonna put it's like $500 million into like we're gonna we're gonna spend it on Studios we're going to see if if if better better content from the top developers can actually encourage people to adopt this this new this new medium yeah yeah I could not agree more or it's something you know a little bit more like gimmicky and parch party couch Co-op right like a beats saber right which is like kind of a fun party game but like that's not a creation of new

habitual habits and spend right and I think like that's the biggest conundrum that the VR space has is creating the habitual behavior that gaming drives most of its tail revenues on um and I think that's what makes it really challenging for me to get kind of excited about um the future of the space um but uh we're wrapping up on the top of our episode and so a final concluding question for you guys we did and you can't talk about VR so this is you can't answer this question in the way that we just in anything that we just talked about but I want to hear a little bit about what your biggest consternation is you're both clearly very committed to the XR space but I want to tell you what you think the number one hurdle is or something that you've what would what would have to happen that would totally derail your belief in the space basically like an under underwriting prior that hasn't been proven yet that if it were to be proven false you would kind of lose conviction in XR um and uh Julian uh how about you go first and uh

Taylor can close us off I mean I'm biased like I like I spend all my days and nights just thinking about these things and trying to like counter like all these things in my head exactly this is the founder fear this is right like what could go wrong and exactly so you have a huge you have a huge list yeah yeah I mean there is a there there is a list for sure I I think it's I don't know I I think it's um it's difficult to pinpoint like a single unexpected variable that like would suddenly remove the need for like an immersive computer or like a spatial computer I I think this is like this is where like Computing has always been leading towards is like the like I I actually see the these 2D screens in front of us as like a hack like a stepping stone until we get to a computer that can display information

for the whole world around us so that these 2D windows can float around us um so maybe if like humans maybe there's like a huge privacy fear or or like humans realize oh I really don't want you know my like apple you know maybe Apple has like a huge privacy crisis I don't know and then like people I don't want that thing on my face maybe I don't know what could happen Okay that one's pretty good all right so nobody wants to wear the headsets because of some sort of fear of big Tech data data mining data safety right they're tracking they're actually tracking me through the every single person I got you there we go that's a pretty good one all right yeah and I I I think to even layer on to that point which is not the direction I was going initially go but there there could be serious regulatory um like Tailwinds that that push us in a

different direction because part these devices are in theory always you know always recording you know it's that's part of this and it needs to know what's in front of you to then show you you know where you know when you think of like a like a slam algorithm for like anchoring anchoring assets like like part of that is the camera the camera has to be recording to know that like I I anchored this over here so when I see it again it's over here now there's always things like the IMU and the gyroscope like that go into that as well but this could be a bigger issue of like hey we don't want people sitting with a headset on all day long continually recording their day-to-day life um and or or like or these big te companies always getting the data in these recordings of of everything that's going on in the world and like I think you could see some issues around regulations that could really step like push us back or slow us down that it's like because we you want the technology to keep moving forward but if regulation pulls it back that could be that could be a serious issue and then I think the other the other thing you I like we are always continually watching are these just these R&D budgets is I mean these are still companies that have to that are

about holding to their shareholders and while I think companies like meta and apple are fantastic allocators of capital I think that's clear based on where those companies are today relative to when they when they went public this is like how they spend their money is is is directly related to where the future of technolog is going and but they're not going to do it just for the the good of the consumer like just because I want a headset they have to also make money in this space and then them pulling back any investment will have Downstream effects on you know going from you know these these public companies to to PE opportunities then to like VC funding and this like if they stop everyone else is stopping no one's no one's investing in like no one's investing in the the the future of of of XR if none of these larger companies are going to be um also investing in the space themselves because the majority of us are either either Building Products or investing in companies that that are going to that are that are enabled by the ecosystems that these larger companies create and so I think continuing to watch that is

is going to be extremely important and we want to continue to see Capital flowing into these spaces so people feel just like we were talking about with VR they they do believe that it's worthwhile from a Roi perspective to spend my time and capital building for these different ecosystems and that so like I would say like General macro Trends are are are what's really going to drive at least my view on this space whether it's you Public public and private R&D spending or potential regulatory concerns that I think are are like I think not talked about enough like this is we don't our iPhone's in our pocket and even when we're walking on the street using it my it's pointed down I'm like I'm not I'm not up recording everybody at all times when I put a headset on a core part of that technology is the the the cameras recording sound or the microphone recording sound or the camera recording video yeah these are some really good points um I'm glad I guess this this question uh very uh very very interesting in a good way to to conclude um guys it was such a pleasure to have

you guys on there's clearly like so much opportunity so much excitement um and so many unknowns actually about this space and I think it's really awesome to be talking about it um live with you guys here today um we usually conclude our episodes by um having you guys share um some of your contact information in the case that anybody in our audience wants to get in touch with you either just to debate you or or to uh you know they're interested in bezi or they're interested in Convoy so um you know how can they get in touch with you uh maybe Taylor have you go first yeah absolutely um yeah so I I would I I have no issue with anybody having my email address I'd love for anybody to to reach out I have no I love to debate I love to learn more things so if anybody wants to get in contact with me based off this podcast or the newsletters we've written or any of the companies we've invested in my email is taylorc convoy. VC pretty straightforward always happy to have conversations here um and then if you know we have a larger team here if anybody would like to reach out to they're all on LinkedIn um all of our

contact information is on our website and yeah if you're an early SAR founder would happy would love to chat with you and and learn more about what you're building yeah um yeah my emails Julian be.com uh I think um if you want to learn more about bezi that you know we have like a Discord server that you can join uh have a bunch of YouTube tutorials and you know stuff like that um I'm also open to connecting with people on LinkedIn just search for my name I'll be there nice as always friends okay that's the that's the end of our episode um please feel free to hit me up at Alexander nvic.org Julian awesome thank you thank you all right if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a five-star review and if you want to reach out or provide

feedback shoot us a note at podcast nov. or find us on Twitter and Linkedin plus if you want to learn more about what novic has to offer make sure to check out our website www.nic.edu and advisory services again that is www.nic.edu [Music]