Magic Leap Raises Big New Round of Funding (Oct 12, 2017)
Magic Leap, the stealth AR startup based in Florida, has just raised yet more funding, according to a regulatory filing, though the exact amount isn’t yet public. It has an authorization to raise up to $1 billion at a roughly 17% premium to its last round, and Singapore’s Temasek is expected to be one of the investors. That Magic Leap is raising even more money ahead of what’s been widely expected to be a launch late this year is both a sign that its investors are still excited by what they see, and also likely a sign that it isn’t quite ready to launch and therefore start generating revenue yet. Both Magic Leap and a small group of people who’ve seen its product continue to be very bullish about its technology, but it remains tight-lipped about exactly what it’s building, what form its product will take, how it will be priced, or when it might launch. Hopefully that will change soon, because for now gaming-centric headset VR and smartphone-based AR are really the sum total of the combined AR and VR markets, and Magic Leap has the potential to add an interesting new segment to the market.
Facebook’s Oculus today held its fourth developer event, Oculus Connect, and the biggest announcements revolved around standalone headsets. First, Oculus will launch the Oculus Go, a mobile-grade standalone VR unit, at $199 early next year; secondly, the company has made significant progress on its Santa Cruz project, which will result in a standalone PC-grade headset at a later date. The Oculus Go is a pretty compelling new entrant in the market, a competitor of sorts to Samsung’s Oculus-based Gear VR but without requiring a compatible smartphone, and with some feature benefits too. It’s more expensive than Gear VR and Google’s Daydream View, but still fairly reasonably priced. Santa Cruz will offer inside-out tracking and six degrees of freedom, meaning that it will allow a full range of motion and room and object detection without requiring external sensors to be installed in a room as the HTC Vive does. There’s no detail on pricing or exact availability for that product, but it sounds like it’ll be at least late next year before that’s out. With both products, Oculus reduces its dependence on partners – Samsung in mobile and PC for the Rift – over the long term, which is likely to push them further into the arms of other VR platforms, including Daydream in the case of Samsung and Microsoft’s Windows-based Mixed Reality VR platform in the case of PC OEMs.
On that latter point, though, another big announcement Oculus made today was making permanent the temporary $399 summer price point for the Oculus Rift bundle including controllers, something that’s seemed increasingly inevitable as Oculus extended the price promotion. As I pointed out in this piece I wrote for Techpinions a while back, that price point and similar pricing moves from HTC and Sony are making the opportunity Microsoft originally targeted for its VR partners disappear. It’s going to be very tough to sell a basic PC VR headset against the Oculus Rift bundle at the same price point.
The other announcements made largely relate to different bundles and new software. Oculus is updating its platform for the Rift, introducing some new experiences including a virtual desktop environment along the same lines as Microsoft’s recent announcements – something I’m still not convinced most people want from VR – as well as more social and entertainment experiences. It’s also creating a business bundle for Oculus designed for companies that want to deploy Rift and Rift-based experiences, which will come with a premium tier of support over and above a set of hardware.
The big new goal Facebook and Oculus announced at today’s event is getting 1 billion people into VR, something that’s miles away from today’s numbers, which are likely closer to one hundredth of that number. Certainly, bringing the price points down is part of getting there, as is creating experiences beyond hardcore gaming, but it really doesn’t feel like there’s much there yet, which may be OK because Facebook doesn’t seem to have put a timeline on that goal, which therefore remains more aspirational than concrete.
Microsoft today held what it called in its unique terminology a mixed reality event, at which it made a number of announcements. Perhaps the biggest announcement was that Samsung is making a Windows VR headset, which will cost $499 and therefore land towards the higher end of the spectrum of Windows VR headsets, and well into the territory covered by the premium VR rigs from companies like HTC, Oculus, and Sony, a problem that I outlined a while back in this column. It and other headsets will be available in the next couple of weeks from a variety of vendors and at a variety of prices, though none of them at the $300 price point Microsoft originally touted for the space. That’s reflective of the fact that no-one wants to be the Google Cardboard of PC-based VR, as they all want to provide something of a premium experience. Also announced today was the quiet acquisition of most of a company called AltspaceVR, which was backed by Comcast and was effectively shuttered over the summer, and provided a social angle on VR, something Microsoft itself hasn’t had but which Facebook has made an obvious focus with Oculus and Facebook Spaces. Lastly Microsoft announced the number of apps available on the Microsoft Store for VR – 20,000 – and the fact that a basic Halo game will be coming to the platform this month too.
Overall, it feels like Microsoft is finally getting to the point where its VR push is bearing fruit after a lot of talking about it over the past year or so, and that’s a good thing given how marginal its AR push still is outside of very limited commercial and educational deployments. Its mixed reality terminology isn’t going to do it or its partners any favors from a marketing perspective, and it remains to be seen how many PC owners really want VR experiences enough to spend hundreds of dollars on new hardware rather than going the mobile VR route and buying a $100 add-on for their smartphones. Samsung’s entry into the market certainly creates an interesting opportunity for it to take its so far mobile-only strategy further up-market, and based on the response to its headset, it seems it may be one of the best on offer right now for Windows VR.
Sony has announced somewhat out of the blue that it has new PlayStation VR hardware coming, at the same price as its current hardware, but with better support for HDR and with integrated headphones, both of which features overcome annoyances with the current hardware. In some ways I’m surprised that the price isn’t going back up a bit – the recent price drops had seemed to be possible evidence that new hardware was coming, and therefore that Sony was clearing inventory, but it appears the price cuts we’ve seen essentially across the industry lately are here to stay. That, in turn, means that this is going to continue to be a crowded and price-pressured market, with little margin available in the early running as companies look to expand the addressable market beyond merely hardcore gamers, something that’s still proving tough.
Bloomberg reports that Magic Leap is trying to raise additional funding, which might include an investment from Singapore’s Temasek fund (which was one of two sources of the money that recently bailed out SoundCloud), and would value it at $6 billion. It also says the company hopes to launch its product within six months, that it will cost $1500-2000, and that it will sit somewhere between glasses and today’s VR headsets in format and require the user to also carry a puck to provide processing. Though the funding is certainly interesting, it’s the other details that are far more interesting to me – those suggest a device which will be out of reach for all but a few consumers if it launches at that price, and which may sit awkwardly between other products in the market, not quite glasses-like enough to be wearable all the time. By all accounts, the technology is pretty amazing, though whether Magic Leap can really squeeze it into a production device with these parameters remains to be seen. But it’s another indication that truly wearable AR is many years away and we’re in for another few years of attempts that fall short in various ways.
Sony Discounts PlayStation VR Gear by $50 (Aug 29, 2017)
Microsoft’s First Windows VR Headsets Go on Public Sale (Aug 1, 2017)
YouTube Makes Series of Announcements at VidCon (Jun 23, 2017)
IDC Forecasts Strong Growth for AR and VR Headsets, with VR and Commercial AR Biggest (Jun 19, 2017)
Sony Announces 1 million Playstation VR Sales (Jun 7, 2017)
Microsoft Announces Dell, Asus, and Lenovo VR Headsets (May 31, 2017)
Though Google spent much of its I/O keynote talking about apps and features like Photos and the Assistant, it did devote a few minutes to the topic of AR and VR, which will have a second deeper-dive keynote of their own tomorrow. On the VR side, the key announcement is that Google is extending the Daydream platform beyond mobile VR to standalone headsets, which in the first instance will be built by partners Lenovo and HTC and supported with chips from Qualcomm. Daydream so far has been limited by the fact that the biggest Android smartphone vendor has its own competing platform, so the news that Samsung’s Galaxy S8 phones will support Daydream through a software update in the summer is a big deal. My guess is that Samsung will still favor its own Gear VR system with its usual bundling and discounting deals, but the fact that Daydream View and other compatible headsets will now work with Samsung devices should increase its appeal. Daydream’s system is better than Samsung’s in a number of ways, though the recent Gear VR update closes the gap a bit, so the playing field should be a leveled a little going forward. Also worth noting are a couple of AR announcements, including a new “Tango phone” to support Google’s indoor mapping technology, and VPS, an indoor equivalent of GPS which will enable precise directions within large stores and the like. Neither of those feels remotely mass market yet, which means Google’s AR efforts are far more marginal than the phone-based efforts from Facebook and Snapchat (and likely soon Apple too). Interestingly, VR head Clay Bavor outlined his vision for the space in a blog post today too, and it’s remarkably similar to Microsoft’s in that it envisions a continuum or spectrum that includes both VR and AR, though Bavor’s favored term is immersive computing rather than mixed reality and he’s less pejorative about the VR and AR terms everyone is already using.