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VR’s Content Drought

Why can’t VR content, cash and consumers converge?

IMAX recently dealt a one-two punch to the future of VR with a pair of bleak announcements. Announcement #1: IMAX has begun shutting down its VR centers due to disappointing revenues. Announcement #2: Google and Imax’s VR camera project has been canceled.

Something which caught my eye in the first announcement is that although IMAX established a $50 million USD production fund for VR content, only $4 million USD was spent - with just one VR title produced. Why is that? It’s no wonder folks aren’t drinking from your pipes if you fail to supply them with water, right? And if we have VR funds ready to be spent, VR creators chomping at the bit, and VR centers in need of content, then what’s the holdup?

This isn’t a VR-specific problem, of course. Many of us are familiar with organizational inertia and the pervasive layer of fear that blankets the entertainment industry in general. This also isn’t an IMAX-specific problem (although one wonders what will become of IMAX as it backpedals from the technology upon which it had pinned its hopes of continued relevance).

Obviously, a certain amount of VR content is being funded, created and exhibited (witness the rush of film festivals to include VR ghettos in their programming for fear of missing the boat), but clearly not with the quantity, quality and accessibility required for mass-market adoption. So, I posed the following question to some folks around me (both physically in China, and virtually in my network):


Why can’t VR creators, investors and distributors get in bed together?

The replies, from those in the VR trenches, are candid and insightful. Unsurprisingly (and perhaps indicative of the problem), almost all of the comments came from VR creators and producers. Investors and distributors in my network uniformly declined to reply, even anonymously. One topline observation that surfaced repeatedly from respondents who requested anonymity was how VR approvals at many companies and studios went from “full go” in 2015 to “full stop” in 2018. As a producer at one well-known Los Angeles studio noted: “A couple years ago, you could take a traditional media property that was languishing in development hell, reframe it as a VR production, and you were greenlit before you could even say the letter ‘R’ after ‘V.’ Now, the letters ‘VR’ are the kiss of death. Instant results didn’t materialize, so no one wants any part of it. VR is viewed as an R&D effort, which at our studio signals loss as opposed to profit.”

Bleak, but honest.

Following are further observations from a variety of respondents, most of whom had no qualms about being quoted. Some, like VRrOOm’s Louis Cacciuttolo, took the time to expound at length...

Louis Cacciuttolo is the founder and CEO of popular online VR portal VRrOOm:

“VR needs its Elon Musk or its Richard Branson type of leader: a powerful individual with real vision who understands that VR is an ecosystem which needs to be apprehended on the whole - not in bits and pieces that don’t make any sense when taken separately - and who dares to invest without caring too much about stakeholders or ROI.

What is most missing in VR right now is access to the audience in terms of communication. If we consider VR as a product, and we want to market this product, then we should apply the same marketing principles to the VR industry that apply to any product or service launching new markets. Building awareness is the very first step of any successful marketing strategy, and it’s also (oddly) the weakest link in the VR landscape, and the least of VR professionals’ priorities. Perhaps 1% of the world’s population has an idea about what VR is. I just don’t believe the surveys taken in U.S. cities, which say that 60% of consumers want more VR in their life. This is total bullshit. One just needs to get out of the big cities to realize that no one has any idea what we’re talking about when we mention terms such as VR or AR. This is the reason why I created VRrOOm in the first place: to give VR a voice and access a broader audience with subjects and topics that are not only relevant to the industry pros but can be understood by a larger audience.

As VR is all about experience, information and communication are not enough. We need to provide access to VR everywhere with high quality experiences. VR roadshows could be great. I love the concept of VR vans going from city to city. LBEs (location-based VR experiences) are extremely important also, but they’re too gamer-focused. The vast majority of people don’t go to them. I support cinema chain and theme park initiatives to showcase VR works: from contemplative 360-degree content to room-scale, immersive, interactive 6DoF (six-degree-of-freedom) VR and large-scale, free-roaming experiences. Cinemas and theme parks attract larger, more varied audiences, and provide services in more professional, qualitative ways. However, VR is something that traditional cinema staff might not understand well and get right in terms of what to show and how to show it. They should hire specialists in order to maximize their investment if they venture into VR territory.

I agree that ‘true’ VR is not passive 360-degree video. However, great narrative content is being created in the 360-degree video format. It’s an important first step for non-gamers to get acquainted with the technology and the hardware before they jump into more interactive, ‘geeky’ formats. It’s also the cheapest way for most people to access VR basics, and of course budget is one of the most important considerations for most people - something many of the VR industry players seem to forget. Most VR professionals also forget that many people are intimidated by VR technology and are afraid to be cut off from the external world. We need to create the best possible environments in order to overcome these barriers. Hence, I believe Oculus Go is good for VR: not only it is relatively affordable, but it allows interaction with a small controller, is comfortable, and doesn’t entirely isolate people due to the sound-inducing system.

The experience quality of VR content and hardware should be top-notch, and the content should be frequently renewed.”

An award-winning VR filmmaker, Gabo Arora is a creative director and senior advisor at the United Nations, and the co-founder and creative director of Tomorrow Never Knows, a content, technology & research studio focusing on VR, AR and AI:

“I saw the IMAX announcement as well, and thought that this was a result of old-fashioned, dying Hollywood thinking relying on ROI and big IP, rather than supporting independent voices and original ideas. For companies like IMAX, the only way to mitigate risk is by doing something derivative. And you can’t be derivative in VR. By VR’s very nature, you have to take a chance on things that have never been done before, on stories that have never been told before. It’s just that the wrong people are in control of the resources.”

Disney-pedigreed producer/director Chuck Williams is chief creative officer and head of development at Marza Animation Planet:

“This is a classic ‘chicken & egg’ scenario.  Manufacturers are building hardware and venues without first investing in great content. Video game manufacturers early on learned that great content - that ‘must-have’ game - drove users to buy their hardware, not the other way around. They bundled their big titles and sold more.  But with VR, in my opinion, almost everyone is focusing on what the devices can do. It’s all about the tech, with games that only demo the tech. If content led the way - great, hooky, emotional stories that keep audiences coming back for more - then people would be driven to the experience more.

What’s the ‘must-have’ game / story in VR? What’s everyone buzzing about?  Right now, it’s just about trying out VR itself, just the experience of the tech…and after about 5 or 10 minutes, you’ve ‘done’ VR. But nothing has hooked you from a content perspective to come back again and again. Content should be driving this medium - challenging the tech to do more and more - not the other way around.”

VFX maven and producer Scott Ross was an executive at ILM and LucasFilm, co-founder and CEO of Digital Domain, and currently advises large institutions and companies including Magic Leap:

“What’s wrong? Tech difficulties, set-up difficulties, cost-prohibitive, no compelling content, no path to monetize, clunky as shit, and no $$$$ for production... just to name a few.”

Nikk Mitchell launched China’s first online VR forum, and is the founder and CEO of VR production company FXG in Hangzhou:

“Hollywood is a well-oiled machine that has yet to adapt to VR. I see the main challenges being ‘The Way’ and ‘The Who’...

The Way - The most relevant comparison to the pairing of VR and Hollywood is the pairing of video games and Hollywood. Currently, if a game studio wants to make a game with a great Hollywood IP, they simply pay to license it. For billion-dollar gaming conglomerates like Electronic Arts, even license fees in the millions are affordable. VR is so far from that level now. Not only do most VR studios struggle to keep the lights on, but the VR consumer market is currently so small that any game budget is hard to recoup - even without bloated IP licensing fees. VR studios are therefore looking to companies like Oculus to help finance game production, while keeping costs as low as possible.           

The Who - Hollywood is an insider’s club. Studios give deals to the companies they have been working with for decades. If everything is running smoothly working with the same people in the same company since before digital, why switch now? Unfortunately, many of the best VR developers are not a part of the Hollywood scene - almost all of the VR content studios are new, unknown names. From what I have seen, Hollywood has not taken many chances with the young new talents of VR, preferring to work with their old partners who don’t really ‘get’ VR. This has resulted in poor VR adaptations of Hollywood IPs, and not so many to speak of at that. One exception is Magnopus, a group of Hollywood veterans with passion and talent who are creating high-quality VR content for IPs such as Blade Runner and Coco.”


“I have not seen any VR content adding significant incremental value over a conventional movie, short-form or game that justifies wearing a clunky headset. Consumers sense that. I do believe that VR has a role in commercial applications, but at least not for now in the consumer space.”

Tobias Baumann is the director of game development at Noitom in Beijing:

“I think it’s often a simple operation cost vs. revenue calculation issue, with a consumer retention problem mixed in. Once you’ve tried an experience in a VR arcade, how likely are you to return and try one again?”

Ian Powers has worked in the Chinese entertainment industry for many years, and is the co-founder and CCO of Excelsior Pictures in Beijing:

“From what I’ve seen, at least in China, it comes down to distribution and marketing. There really aren’t great ways to build habit cycles into VR yet. The biggest thing I see is that few people want to be vulnerable in a public space. VR disrupts an individual’s experience of reality: it strives for a hypnotic supplanting of our actual reality, but at the same time you know that world is out there with people giggling as they watch you fumble around with this big helmet on. VR isn’t a shared experience in most cases - there isn’t much social interaction or inclusion yet.

The benchmark we all want is something like the film Ready Player One. But few people are committing to a deep gaming experience or to a narrative that gives you true control. To use Marshall McLuhan’s terminology, VR is a cold medium, but we’ve been treating it more like a hot medium.  Although I’m sure they’re out there, I’ve seen very few VR experiences where you can truly explore a world like one does in World of Warcraft or any other MMORPG (massively multiplayer online role-playing game), or even something like Grand Theft Auto. Most of what I’ve seen has been treating the cold media of VR like a hot one. Sure, you can look around, but you’re mainly pulled in the direction of the narrative. VR is still nascent, and the current technology may not be where it needs to be in order for people to make it a daily habit.           

As far as VR narratives go, they usually try to follow the form of a film screenplay, but is that the right way for VR to work? In our own human experience, the closest thing there is to VR is dreaming: we have shifting levels of control and are bouncing around our mind, personality and subconscious. Sometimes you’re in control and sometimes you’re not - but it’s very personal, and you’re always filling in a huge part of the experience yourself. That’s a scary direction, because in VR we’d have to give lots of personal access to something outside ourselves. I think Facebook user data issues will be trivial in comparison to the issues around that sort of data access.

Looking at games like Fortnight can be very educational, mainly because of how they build the gaming habit into the marketing and make it easy for someone to lose themselves in the experience for hours. I see very few behavioral designers working in VR, mainly because there isn’t enough money in it. From a financing standpoint, while there have been a few VR ventures like the IMAX program, I don’t see many people trying to build financial models that incentivize new users. Basically, it’s really expensive to even try out VR games or experiences.           

At a time where apps and mobile services are making use of ‘strategic losses’ - effectively operating in the red to build the number of users and attract more investors - a similar strategy could be very effective for VR (which in many cases seems to be using older strategic models, probably because the tech is still quite expensive). I’d imagine that when Elon Musk finally works it out where we can plug our brains into computers and use our brain and visual cortex to do the hard work of creating worlds, then VR might become more viable. The answer is probably in using a combination of many technologies and finding a way to integrate everything economically on a global scale.”

Zheng Zi Long has a background in games and immersive media, and is director of the Beijing Film Academy’s Interactive Film Research Center:

“I spend a lot of time on VR films, and think they will be the future trend, but current VR development is indeed not yet ideal. I think there are three reasons. First, there is no mature VR storytelling language. Second, headsets are not comfortable. Third, there has not been a breakthrough from the traditional film mindset.           

There are many VR works, but most are about the technical aspect, without much artistic value. This leaves the audience without any desire for repeat VR experiences. Besides, something worth considering is whether a VR film is just another type of film format, or whether it is a combination of film, games and internet experience. I think VR film should not be ‘VR technology plus traditional film,’ but should be a whole new production pipeline and experience.           

I am currently creating some experimental shorts to explore VR language, while also trying to develop VR content that has commercial value. I think that combining theory and practice is the best way to advance VR production.”

Rick Garson is the founder and CEO of immersive media studio VX Entertainment, headquartered in Beijing, and has a colorful career in branding and live events, including as president and CEO of Billboard Entertainment:

“You need to provide an interactive, immersive experience without the goggles. Most people can put up with those headsets for about 10 or 15 minutes, but they like the immersive, interactive feeling more. We’re working with a couple companies on creating interactive themed attractions using projections and holograms, and soon you’ll be able to have holograms on your phone. The application of mixed reality to live events and themed attractions will be huge. People don’t just want to sit alone - they want to go somewhere and interact with others.

It’s all about the content. As a content creator, I’m not worried about the ‘VR winter.’ What’s new today is old tomorrow. It really doesn’t matter what the technology is. I think VR is great and is really going to take off in retail and other areas, but for entertainment it’s just not there yet.”

Eloi Gerard is the co-founder and CEO of CrowsNest XR in Shanghai:

“I tried the IMAX VR space in Shanghai, and it was very bad. They just tried to attract user to the VR technology, but not to a content experience (do you want to watch my Sony TV, or watch Indiana Jones?). There’s confusion in VR between games and film, and the user doesn’t know what to expect. After trying VR, the audience usually has the feeling that they understand it, but also that it’s useless or in its infancy. They will probably not try VR again for the next 3 years and will even badmouth VR to others. The majority of VR arcades and exhibitions in China promote poor experiences like this. We need to wait until they go out of business. Then we will have more organic growth and can position VR correctly in the mind of the consumer.

It is not a question of money anymore, it’s a question of professionalism. You still have many companies with no experience but a lot of money blurring the message of what to expect in VR and interfering with the potential of a true VR ecosystem. We shouldn’t consider VR in an ‘experimental’ phase by now - cinema was a business from year one. There are VR creators in China who have produced or directed dozens of VR experiences, and there are thousands of experienced people worldwide. This ecosystem could produce so many VR films, drive creativity, win more awards and create many jobs - in China and everywhere. But the ecosystem is blocked by many so-called ‘distributors’ who are simply showing the cheapest content they can find and presenting the worst of VR to end users. They wrongly position VR and themselves, and we are losing precious time and money.”

Ramon Fernandez is CTO at Kingdom of Heaven in Shanghai, creating VR and XR experiences for installations and retail spaces:

“It would seem that IMAX and others are stuck in a modern Hollywood mindset, where ROI is the key metric. ROI is important after you have an industry and an established language. But given the nascent state of VR content, I believe they are forgetting the early days of silent film: they need to experiment. Why spend $4,000,000 on one VR experience when you could spend $500,000 on eight more experimental experiences, trying to improve capture or post or any of the other things that are currently pain points in VR content production? Also, many have an ‘old school’ idea of what VR content should be. 360-degree videos are not VR. How do you push the state of the art if you just feed customers the same Hollywood-style content in a more inconvenient and harder-to-access package?

Take the venture capital model, where 90% of a VC’s investment is essentially burned to achieve a breakthrough on the other 10%. Whoever has the strongest stomach for losses gets the returns. IMAX would do well to fund projects with their entire available content budget. If IMAX sat on the $50,000,000 that they earmarked for content production, it would seem they aren’t seeing the opportunity they have to find gems that are waiting to be plucked from VR directors and production houses. A company like IMAX has a pedigree and access to people. What they are missing is the will to dig in their heels and just try things - knowing that many will fail - in order to move the industry forward.           

VR is new territory. Maybe a VR creator has produced some things and those things have worked (or not), but no one can honestly say that they ‘know’ VR. When digital 3D film production first arrived on the scene, people had some idea of what it was, but no one ‘knew’ what it would become: the struggles in post were real, and lots of people lost their shirts pushing the tech forward. If VR stands a chance of not turning into ‘3D Cinema 2.0,’ everyone – including the people with the money – should look at each project and ask, ‘How can we push closer to the edge of what’s possible?’           

Experiments don’t imply failure if the outcome is some new innovation that makes it better and faster to product content. If you are not experimenting, then you are making crap content. You have to take risks. Look at the Marvel Cinematic Universe, Deadpool and Logan to see the various levels of risk being taken – directors taking less money to make what they want, to push the edge. In today’s world, if a production doesn’t make back costs plus 50%, it’s considered a failure. A company like IMAX, with that kind of cash, could fund 30 productions and know that in the aggregate they will make back the money. But if they spent just 10% of the production fund, with no plans to spend the rest, then they were never really out to push VR.

It took 60 years from the first motion picture to get to Citizen Kane (if you consider the first film being shot in 1888). And I’m sure no one foresaw the modern-day blockbuster coming back then. VR has existed, in one form or another, since the 1960s. But VR is still very young and people need tools in order to push it. Hardware tools have finally caught up to create more than a few polygons on Jaron Lanier’s ‘eye-phones’ (that is in fact what he called them). But his vision is still not fulfilled, as the software and hardware tools are not yet at even the level of the first digital cinema cameras. IMAX would have been better served by focusing on funding projects to build, test and polish such tools. Edison took the risk. People wanted to see circus performers and Vaudeville acts because they had little else to entertain themselves.

There is also the social aspect of traditional movies that VR just does not have. Even though you are generally quiet at the cinema, people laugh, cry and scream together in the theatre. VR is still a very solitary thing. Who takes their partner to a VR center on a date? You can’t even make the comparison of taking someone to the arcade, since even in an arcade you can still play together. At a VR center you usually do everything alone. That’s not to say you can’t have group VR activities, but VR cinema has not yet cracked that nut.”

Eddie Lou is the founder of Sandman VR Studios and the Sandbox Immersive Festival in China, and has produced internationally-acclaimed VR experiences:

“I do believe that there are a lot of talented people who can produce great VR content and also manage risk and budget well, but there are several barriers and challenges: 1) unpolished tech 2) creators are still learning by doing 3) financiers don’t know the industry well enough to structure a business model and invest in the right projects 4) most distributors don’t understand VR well enough to figure out what to present to consumers, and how. Mismatched information and expectations cause a lot of misunderstanding.           

IMAX failed in VR because of their pride and arrogance. Everyone should be humble at this stage of the VR industry. IMAX was in a great position to lead the VR ecosystem by setting up the content fund, but it is also a public company, and investors couldn’t bear the risks. Investors don’t want to put money - even small money - into any businesses they don’t see as profitable.

I believe that VR will have a completely different landscape than Hollywood. Hollywood may play a role in that, with its IP-generating capabilities, but it will be new players’ game.”

Gianluigi Perrone is an Italian filmmaker living and working in Beijing, where he is the CEO of Polyhedron VR Studio:

“There is still the mistake to compare this medium with the film industry, which was born in a different age of communication. I am afraid VR distributors are making mistakes that will badly hurt the industry in the eyes of the global market, just because they want to reach everybody, which now is simply wrong. If we really want to be honest, almost everybody is selling themselves, and there are pathetic inner battles between competitors. Competitors of what? There is not even an industry yet. Instead of shared experimentation for creative and business models, we have dogs running to bite an invisible bone. There is no target audience at all. Are we sure that - if there is really any audience for VR - what they want is to watch is planets, or waterfalls, or silly animation with poor interaction? Some media and entertainment companies choose their VR staff from the leftovers of other departments, so how can they expect to have good results?

This is the winter season for cinema and the golden age of video games. VR has the chance to give video games the honor of being recognized as an art form, but the criteria are old-fashioned. This is the moment for having a strategic agenda. It is stupid to use all the resources now to get attention from a few thousand people who only count in a small circle. This leads to a failure that is poison at the eyes of the global industry.

There is a time for wit and wisdom, and for VR that time is now. As I have said many times, creators and professionals are operating 20 years in the future. The audience doesn't even know what VR is. There are lots of lies, as in every industry. The sin is to act like you believe in those lies. VR is supposed to be an awakening, not a blinding.”

Graham Fink is a multi-media artist with a distinguished career as a creative executive for firms including Ogilvy & Mather and M&C Saatchi, and is currently drawing with eye-tracking technology:

“After the initial brouhaha surrounding VR when it first came out - the thrill of inching along a tiny ledge hundreds of feet above a yawning precipice, or of walking on the moon - the novelty began to wear off. One of the problems was the technology never quite matched our expectations. There just wasn’t enough ‘reality.’ But perhaps an even bigger problem was that the ideas behind the stories dried up pretty quickly. Whenever I take a VR headset off these days, I am mostly disappointed with what I’ve just experienced.           

However, I am a great believer that creativity can solve anything. What VR is crying out for is someone to come along with a completely new take on it. An interesting parallel is to think of what Walt Disney did for animation when he made Fantasia. No one had ever seen (or heard) anything like it before. And cast your mind back to holograms when they first came out. I remember looking at those fuzzy 3D green things in a darkened room and getting very excited. Years later we were all still looking at those fuzzy green things in darkened room. And then suddenly, Alexander McQueen created a stunning (non-green, non-fuzzy) Kate Moss hologram for his 2006 fashion show, and then perhaps even more amazing, it was used to bring Tupac back to life in 2012.

VR by itself is just a cool bit of tech. It needs some brave new creative thinking to take it to the next level. The best is yet to come.”

Gao Er Dong is a recent graduate of the Beijing Film Academy, and has produced animated VR experiences that are being exhibited internationally:

“So far, VR content has mostly been games or shorts, without much attraction to the user. Additionally, wearing VR gear for long periods of time is not comfortable. Therefore, VR business models cannot successfully emulate the business models of film, games and TV series. Those models rely on users watching for long periods of time.

The challenge now for VR content is that there is no effective monetization strategy. So, even those who have already invested in VR lack confidence in the medium. VR investors are investing based on future potential, not on current business models. I think that the relevant parties should together discuss potential business models in light of current circumstances, and investors should consider the entire VR content ecosystem - from development through to distribution, including how to encourage repeat audience business - not only consider the content itself.

Because VR entertainment has no successful, mature, repeatable operational model in these early times, people need more time to explore and solve things other than just the content. We need more cooperation and multi-party involvement in all areas to achieve an ideal result.”

Darren Ormandy is a China-based writer and producer, most recently for DMG in Beijing:

“The Variety article was pretty clear about why the very promising IMAX initiative has ultimately disappointed. Just one title from $4 million USD smacks of studio indulgence and inflated salaries. It may have only been a tentative investment, but that same $4 million could have produced a handful of titles that showed VR’s range: as a gaming experience, as an informational/educational experience, and as new way of narrative storytelling. VR needs content, no doubt about it, and with that it needs the creativity and experimentation to evolve into an art form and storytelling medium that is distinct from film.

Virtual reality is discovering its own vocabulary, just as film did in its earliest days. The first motion pictures were just that - static cameras shooting actors on a flat set. The only entertainment reference that existed was theatre, so that’s what these early makers filmed. Over time, the vocabulary of cinema developed: the range of shots, camera angles and camera movements that have created such a powerful storytelling medium. With VR we are back to the beginning again. Directors struggle because they can’t stand behind a 360-degree camera (one big-budget VR war experience was only produced in 180 degrees so the crew had somewhere to stand)! Directors can’t do close-ups, they can’t move the camera in the same way. Some makers have shown us the possibilities. Catatonic was a truly immersive (and truly terrifying) horror experience. Chris Milk’s Within production house has produced some exciting innovations in narrative VR, including spatial dissolves creating a beautiful new version of the split-screen. With more time and more experimentation, virtual reality could discover its own language.           

All well and good, but how can this happen? The cost of hardware is key. Video content creation has exploded with the YouTube generation, but that generation can’t afford VR production equipment. Of course, VR tech is complex and R&D costs are hefty, but the VR cameras available are all state-of-the-art Rolls Royces. We could do with a few Priuses. If hardware was truly affordable, it would open the technology to a whole generation of makers who don’t know the rules and wouldn’t be interested in following them even if they did. Sure, we’d have to wade through a tide of VR teenage angst-poetry, but there would be some real innovation there as well. And some of these kids will grow up to run studios.           

The next time there’s $4 million spent (if there is a next time), it should be split up and injected into a number of small independent studios with low overheads and a hunger to prove themselves. With more experimentation - and by making the technology available to the ordinary pocket - VR could develop a genuine creative ecosystem to realize its true potential. Only then can VR truly claim to be an experience unlike any other.”


“There’s been much more talk about the supposed business potential of VR, and not about why audiences would actually be interested in VR content, or what kind of content would work in VR, or what VR needs to be. After attending a VR film festival in Beijing, I walked out shocked at how traditional and “2D” the film selection felt. I was disappointed that this was apparently the best that could be offered. I think the whole creative process needs to be more organic - with creators constantly shooting, experimenting and pushing the envelope. In the organization I work for, there is a lot of hesitation to even buy VR equipment because the leaders are unsure of its future, yet there is absolutely no hesitation about glorifying VR through talk. Simply put, talk is cheap. VR needs to be practiced and developed.”

Chris Chen is executive producer at Twilight Star Entertainment in Beijing, and has worked on a variety of traditional and immersive media projects:

“The idea that VR centers from established companies like IMAX are being shut down - despite having a $50 million production fund from which only $4 million USD was spent - pertains to a typical vicious cycle of ‘trial & error’ experimentation by big corporations who may not be suitable for such kind of endeavor. Most of these ‘old’ media corporations live and die by the almighty daily transactions of the stock markets, wherein ‘new’ risky ventures such as VR must be isolated in small experiments which the bean counters can shut down quickly if they smell fear of an unknown outcome due to the novelty of medium.           

Regardless of whether IMAX ‘allocated’ $50 million USD into a VR venture, the number doesn’t matter if the accountants lack confidence because they have no idea what they are actually selling to the consumer. This is usually the first symptom of trouble, since if you don’t know what you’re selling, your marketing campaign will obviously suffer due to lack of confidence in your own product (if there’s any on the shelves).

In the traditional guidebook of retail business, if you lose the first 10% of your intended budget, and if you don’t really have a strategy to turn around your current operations, then you may as well cut your losses and stop what you’re doing. I see three potential problems in the IMAX case:

  1. The staff didn’t understand how to monetize the new VR endeavor.
  2. The content being presented to IMAX consumers was not the right type to draw a crowd and entice repeat business.
  3. IMAX consumers were not the right target audience for these type of VR experiences.

During my own recent gig producing a VR experience for a shopping mall in Fuzhou - an Ice Cream Planet interactive VR ride on a robotic motion simulator platform - I realized that successful VR experiences derive more from traditional video game arcades with premium options for the players, rather than having consumers queue up for passive VR depictions of a fictional story or play - a format which still hasn’t found a place with audiences yet, except at special venues like museums or trade shows. And during uncertain times, where cashflow is tight and fear runs amok (such as in the Trump trade war era), any money-losing experiment that overstays its welcome is a big no-no for bean counters.

Another factor putting a chill on the VR hoopla is that, due to intense competition for consumer attention, the days of showing generic VR content unassociated with a well-known IP or brand (like presenting a no-name VR dinosaur experience that doesn’t belong to the Jurassic World franchise) are over. Unbranded IPs are the first to go into the dumpster, because IP familiarity is a must for grabbing people’s attention - whether original content creators like it or not.           

Ultimately, the truth is that IMAX couldn’t make VR succeed for them simply because they didn’t allow enough time to work out the nuts and bolts. If they are in for a quick cash grab, then I’m afraid that they’ve chosen the wrong medium. Steve Jobs burned $5 million USD per year for 10 years in order for Pixar to succeed. Whoever thinks that VR is a spitfire money-printing business, should be in the casino money-laundering business instead.”

Well-versed in game development and VR production, Shane Nilsson is co-founder and director of Coal Car Studio in Vancouver:

“I think the problem is that early investments haven’t paid off and we’re in a ‘trough of disillusionment.’ Nobody is overly-eager to invest money into VR because it isn’t producing the 10x returns that most investment folks expect. Nobody wants to be made a fool for losing money, but they still want to brag about having all this money for VR so they appear like they’re innovative and on the cutting edge.           

Another factor is that acquiring the IPs necessary for mainstream adoption is expensive. Look at Pokémon Go. Without the Pokémon name attached to it, it would not have had the same adoption rate. Another issue is that of location-based VR experiences not applying brands and IPs to the fullest extent. Look at the Tokyo VR zone and their Ghost in the Shell experience. Aside from the introduction, very little of the experience uses anything from the IP to differentiate it from a generic VR shooter.           

IMAX probably scaled larger than they should have in terms of locations, without having the content required for people to justify going to their facilities. They also did a poor job of marketing. When you think of IMAX, you think of movies, not games. Conversely, look at how successful Dave & Buster’s has been with their Jurassic World VR experience.”

Chris Colman has built an eclectic career as an artist, writer & producer, and is currently a Partner at Final Frontier, a Shanghai-based advertising production company:

I was just reading about how VR experience zones and arcades in China are failing and closing down. I’ve recently been chatting with a company in China that invested a lot of money two years ago to license much of the best global VR content for Chinese arcades. They are now pivoting completely away from that because the public didn’t take to it.           

I don’t know why IMAX didn’t use the money it allocated for VR content. There are lots of directors and studios who surely would have loved to utilize those funds. But I guess even if they had invested it all, there’s still no guarantee that any of the resulting content would resonate with users. It seems like users are firmly in the trough of disillusionment when it comes to VR. Everyone has tried it now, but practically no-one cares to try it again, because their first experience was so ‘meh.’”

Flip Phillips is a Professor of Psychology & Neuroscience at Skidmore College, and was one of the earliest animation scientists at Pixar:

“I find the situation at IMAX pretty surprising, to be honest. People usually seem to sniff out giant buckets of money and dive right in. So, do you think it might be due to overly aggressive ‘gatekeeping’ and hoarding of those funds? That the people controlling the strings are being terribly risk-averse because of some perceived FutureThreat™? This threat could be political, financial or market-based with all the new technology flooding the industry. There certainly isn’t much VR content flooding it, but a lot of people with ideas.

To ‘old man’ it up a little, this makes me wonder if there actually is a lot of viable VR content out there. I remember when Pixar released Renderman to the world, and the common perception was, ‘You guys are giving away the family jewels! Now everyone will be able to make Pixar films!’ - a position that reflected the notion that a lot of people thought they had good ideas (so, let’s put that at 10% actually being good ideas). A lot of people thought that they would just be able to turn-key that shit into a movie by typing ‘$make film’ into the computer terminal. Big ideas with no awareness of the complexity of the problem don’t amount to ‘lots of potential.’           

Even people with some knowledge of graphics, filmmaking, etc... are not well-versed in the storytelling, cinematography and basic technical knowledge you need to make VR really ‘work.’ So, just 1% of the 10% of ideas out there are actually good, feasible, and ready - and the market is not interested in funding experimentation.”

Toony Wu has created and directed many traditional and special-format animation productions throughout his career - most recently in AR/VR/MR - and is currently senior director of children’s content at the Qihu Keji Company in Beijing:

“VR’s content industry includes technical people, games developers, pioneering artists, and big companies who don’t want to miss out. Technical people are enthusiastic about new technology, but may not have the ability to create good content. Game developers may be the biggest group in VR. They are used to thinking about game concepts, and are good at creating experiences, but VR storytelling is more challenging for them. The pioneering VR artists have good ideas, but usually lack money, technical know-how and teammates. Also, their ideas may be more advanced than mass market audiences will accept. Therefore, they face the challenge of making their work commercial. Big companies treat the VR medium as an experiment. Until VR has an effective business model, they will not commit themselves.

Taking all of the above into account, the current VR content landscape may not satisfy a company like IMAX, and this could explain why they didn’t spend much of their VR content fund. Another reason could be that the process for VR creators to submit their work to IMAX was unknown, flawed or too complex, and also perhaps that IMAX had no objective way to confidently evaluate VR works.”

Formerly director of development for Disney China’s Local Content Production unit, Wen Feng is a founding partner of Magic Dumpling Entertainment in Beijing, and is working on various VR productions:

“For new media formats such as VR, I don’t think establishing a fund is the best way to generate new content. Instead, I think - in the same way that Google encourages employees to devote 10% of their time to experimental projects - having a team of talent developing VR content would be more stable and productive. You can imagine that IMAX or any company with a content fund has a business goal and a “jury” deciding who gets that money, if anyone. This pressure is not healthy for a new technology - especially when there’s no proven business model. Also, IMAX isn’t a film festival. Film festivals usually have more courage to exhibit new things.

I imagine IMAX’ motivation is that they know they need to evolve to something new, but they don’t know what that is. Then suddenly, VR arrives and looks like it might be that new thing, but there’s no proof yet. Also, IMAX has a special position in the film industry. They have always claimed to have a more advanced, more immersive theatrical experience than anyone else. But they are not as advanced or as immersive as VR. So, I think because they doubt their own future, and wonder what will distinguish IMAX in VR, they ironically become even more reluctant than other companies to commit to it.

VR investors, especially in China, have a limited understanding of the technology and unrealistic expectations of the time and effort it will take to make money. This is understandable, because VR doesn’t have a standard yet, so expectations are based on hype instead of results. Anyone can do a PowerPoint presentation or a demo, so how to prove that my VR is better than your VR? No investor has enough experience to be able to evaluate a VR project and say, “This will be successful.” So, when the expectation is to make a lot of money quickly in an era of uncertainty, those investors may just wait for other people to try first, and then make their decisions when it’s clear what’s good and what’s bad, what works and what doesn’t. Here in China, investors all jumped in when they thought VR was hot, and then bailed out when they realized they weren’t going to get rich quick.

Hopefully, some industry-leading companies like Google or Disney - because they make a lot of money in general - will be smart enough to apply some percentage of their profits to invest in new formats such as VR, AR and MR, and push those formats to become future mass media. To rely on small companies and individuals to do so, and to expect investors to support them in the process, isn’t really practical, no matter how motivated everyone may be. Small companies and individuals have financial limits, and investors often view it as throwing their money into the water. Just as in traditional media, VR content creators should try to spend as little money as possible, especially on experimental content that is exploring the possibilities of the VR medium. If an experimental VR project burns a lot of money without a profitable revenue model, it will be bad for everyone working in VR. Hopefully, economical experimental efforts become a seed that somebody sees and helps to grow.

VR is nothing special now. Most people have at least heard about it, and many people have tried it. In gaming arcades and museum exhibitions, the expectation is now that they must include immersive technology such as VR, which is a good thing. Hopefully the success that we’re beginning to see for VR in games, exhibitions and theme parks can expand to other areas, and influence people to try new things in VR. We need to be sensible, smart and brave.”    

Kevin Geiger's picture

Kevin is the author of AWN's Reality Bites blog, his musings on the art, technology and business of immersive media (AR, VR, MR) and AI. You can find Kevin's website at and he can be reached at