After investing tens of millions in VR in 2016 and 2017, IMAX has announced it is pulling the plug on its Virtual Reality business in 2019. In December the company notified shareholders it would shutter all of its VR centers and write off of its VR content holdings.
It's another in a seemingly endless line of business failures and dashed hopes for what has long been considered the next big entertainment technology. VR hopeful Jaunt, which develops 3D apps and raised an eyebrow-stretching $100 million in early days, recently announced it would no longer be developing VR content and focus instead on AR & XR applications. Playstation VR's numbers have been underwhelming, which is particularly noteworthy as Sony was widely expected to usher in a new paradigm of VR gaming. Gaming company Starbreeze, another VR darling, is also exiting the VR realm.
Doom and gloom on VR is definitely premature, however, and lest I go spinning patterns from a few headlines, it's important to remember that each of these companies made completely different bets in the space. IMAX's VR play, in particular, with its reliance on physical locations and improvised arcades, always seemed particularly at odds with the era of at-home, on-demand entertainment.
But the news is certainly an indication that VR, for all its promise, is still very much a technology of tomorrow, as least as far as entertainment is concerned.
Here's how the IMAX VR fiasco went down. In 2016, the company announced it was investing $50 million on VR content in partnership with premium Hollywood content producers. It also constructed six VR experience centers around the world, physical locations where paying patrons could enjoy interactive Vr entertainment.
The content IMAX developed was short-form, usually well under 20 minutes. The company expected patrons to dish out cash money on par with a movie ticket for the privilege of five or ten minutes of VR experience. The market research must have been thin on this one, or else the marketing team dropped the ball. Whatever the case, patrons did not show up.
IMAX eventually released its content for at-home devices from the likes of Oculus and Sony. It also tried to salvage the VR theaters by rebranding them as arcades and featuring non-original content found in other VR entertainment centers.
But as Travis Hoium of Motley Fool points out, the centers were expressly designed to give single users short-form experiences. We humans, it turns out, are social animals. We also like buying in bulk.
Which gets to the heart of VR's big problem. Adam & Jonah commercials aside, VR still isn't a social experience. It's hard to believe an entertainment technology is going to peel off enough Netflix subscribers or non-VR Playstation users in 2019 without someone figuring out how to make VR experiences uniquely collaborative, multi-player, and social.
The last of IMAX's VR experience locations is expected to close in Q1 of this year. In a sign of just how bitter the taste of VR must be for the company, IMAX and Google have also ended joint development of a VR movie camera.