Social VR: VR’s Killer App
MARCH 11TH, 2016
I look at and invest in a lot of early stage consumer technology startups. As I am openly bullish with regards to virtual reality (VR). I was an early adopter of VR, originally experimenting with a makeshift Homido rig, and later an Oculus Rift DK2. More recently I’ve become an investor in VR, and I finally have a shiny new HTC Vive on its way to my doorstep. All of which makes me excited for VR in 2016, as it increasingly looks like a watershed year for the technology.
Before jumping into Social VR, it’s important to first take a look at the VR sector from the highest level. I believe VR represents the next generation of computing platforms. Looking back at the history of computer interface evolution, from command line, to Windows, to latest touch UIs, the addressable market was broadened as the user interface became more intuitive. Fundamentally, AR creates a new more intuitive way to interact with a computer. In VR, the controls of the computer become what we are already familiar with through gestures and graphics. VR also gives us wider field of view, where the concept of virtual desktop is no longer confined by the size of a physical display screen on our desktop, or a platform in out hands. Given these attributes, and the multiple use cases across AR, I see the potentiality for the technology to emerge from vertical specific use to a broader computing platform. Many industry analysts also see this potential, and all of the major tech co’s (FB, Apple, Google, Sony, HTC, etc.) have invested very significant amounts of capital in the VR sector over the past 24–36 months.
My Fund recently invested in a company called VRChat. VRChat operates within a sub-sector of VR called Social VR, which you can think of as akin to the way social media operates as a sub-sector of today’s desktop and mobile tech platforms. I believe Social VR has the potential to be the ‘killer app’ within the VR technology platform, similar to the way social applications are the ‘killer apps’ within today’s desktop and mobile platforms. In fact, as of today, users are spending more time in Social VR applications than they are in gaming applications or media applications. Facebook recently validated this ‘killer app’ assumption by announcing the creation of an internal Social VR team, and stated that Social VR was a major strategic initiative of the company. I expect there will be multiple large ‘wins’ in the Social VR space, just as there have been multiple large ‘wins’ in the traditional social media sector.
VRChat, and its users, are doing something profound: They are creating new worlds, where they can hang out with their friends no matter their locations in real life (IRL). VRChat and its users are developing live virtual events for people to enjoy, just like the real-life bar down the street hosts event nights to attract new customers. Users host movie nights, karaoke events, Halloween extravaganzas, presidential debate viewings, and Christmas celebrations. VRChat users are spending (on average) more than 70 minutes per day hanging out at these events, and in worlds they’ve created. There’s even a weekly, live, VR talk show broadcasting from VRChat (Gunter’s Universe), that users can attend as part of the live studio audience. These experiences are very powerful, and represent an entirely new form of human interaction.
For all the reasons stated above, I am incredibly excited about the potential of VR as the next major consumer computing platform, and particularly excited about Social VR. I’m investing significant time (and capital) in the sector, and would love to speak with you if you’re one of the intrepid souls building a company in the social VR, or broader VR ecosystem. Feel free to reach out to me (seth@brightstonevc.com) or any of my partners and tell us what you’re working on!
