High Hopes for Virtual Reality as E3 Expo Opens in Los Angeles

Some stakeholders see VR content creation as a big business opportunity, while others warn that it’s too early to project such ambitious growth.
Illustration by Lars Leetaru

A recent forecast from PricewaterhouseCoopers suggests that virtual reality will grow to a $5 billion industry by 2021 — and $2 billion will come from the gaming industry.

So it’s not a surprise to hear Skydance Media CEO David Ellison predict that VR will “revolutionize” the interactive space. Nor is it unexpected to see a growing number of Hollywood stakeholders converging on E3, the annual Electronic Entertainment Expo kicking off Tuesday at the Los Angeles Convention Center.

Some in Hollywood proclaim VR content creation — which brings with it an opportunity to make original experiences or tap into the IP from its most popular franchises — as a big business opportunity, while other stakeholders like Michael Yang, managing director at Comcast Ventures (which has invested in several VR businesses, including Madagascar director Eric Darnell’s Baobab) warn that it’s too early to project such ambitious growth. “I think it will be far smaller than the studies suggest, but I think the potential is absolutely there,” he told The Hollywood Reporter. “I think some research folks are not being helpful by quoting some of those figures.”

At this early stage, one of the challenges is that VR headsets such as Playstation VR and Oculus Rift have yet to hit wide market penetration. That’s one of the reasons that Yang and others are big believers in the potential of location-based VR businesses, which can include the so-called VRcade model, free-roam games, and the use of VR with motion seats and haptics.

Ellison, who is speaking at an E3 panel Wednesday, believes the opportunity is about delivering what VR can uniquely bring to a story that you can’t get from a movie. “Skydance Interactive’s first release is Archangel, an arcade first person shooter experience that you can’t get outside the world of VR. If [the experience] doesn’t have to be made for VR, it shouldn’t be VR.”

Archangel is already reaching players through a content partnership with the Imax VR Experience Centers (the first launched in January in Los Angeles), where patrons can purchase a ticket ($7 to $12) and have a VR experience in a viewing pod. “I think what they are building is phenomenal,” said Ellison.

Another example coming out of Hollywood is the work of Immersive entertainment unit FoxNext, which is developing an ambitious, multiplayer VR free-roam game based on Fox’s Alien franchise. As planned, the attraction will be a roughly 2,000-square-foot free-roam environment for four players featuring a custom gun with haptic effects. It will incorporate environmental effects such as heat, mist, and a motion platform.

FoxNext is also focused on the gaming space beyond VR; in fact it’s currently working with James Cameron’s Lightstorm Entertainment on a mobile game based on the Avatar property. “I think the reason E3 has been attracting the interest in Hollywood is the emergence of blockbuster games, generating as much or more revenue in the first week of sales as a motion picture,” says Rick Phillips, president of licensing and publishing for the FoxNext Games division.

Tied to E3, on Monday BAFTA is honoring Riot Games, creators of the BAFTA-winning League of Legends, with a special award.

“Riot Games has had a major influence on our industry, from the way they work as a company, to the way they have constantly improved and evolved League of Legends,” said Nick Button-Brown, chair of BAFTA’s games committee. “Their worldwide events, their stadium-filling matches and the generation of stars that they have created have changed the way we and many other industries look at games.”