GamesBeat: Our previous speaker was saying that it’s hard to get something you can play at home to work in the arcades, because people have already been there and done that at home.
Iliff: Well, it depends. There isn’t necessarily that much overlap. That’s totally true in cases where people have VR at home. They go to an arcade and they think, “Why I do I want to play these games?” For most of the walk-in customers–around 70 percent of the customers are just walk-ins. They’ve never seen it online or read about it. They’re just walking by. They’ve never played VR at home. They’ll be totally new to all of it.
That’s going to change over time as VR becomes more mainstream. But in a lot of ways we see both of these markets building each other up and actually bringing value to both customer sets over time.
GamesBeat: Do you have any desire to create something totally unique for the arcades, that gives the player an added experience they can’t do at home?
Iliff: Absolutely. That’s why I feel like our testbed, a very simple arcade–it’s only doing the most basic things we need to do to test our games. But incorporating other aspects, such as different immersive experiences–there’s scent devices, other types of haptics, hot air, wind, all these things. You can incorporate simple ride design into your arcades, or a full free-roaming experience. You can do practical set design and incorporate that. That can be very interesting.
As a business, though, you have to be aware of the throughput ceiling. If you invest a lot of money into doing some really heavy buildouts, and you can only put six people through it every hour, you’re going to hit a ceiling pretty quickly where your return just isn’t going to be there.
Question: We’re currently building a location-based entertainment at a VR startup, and I wanted to ask you, where do you see that industry in five years?
Iliff: One of the biggest ways you can do yourself a favor is keeping costs low, building a minimum viable product, a minimum viable business, getting it out there in the market, getting customers as quickly as possible. Having played the games that are out there right now and seeing where the market’s going, and then having one or two specific calls to action to get people to come to your business, things they can’t have at home.
If you have a unique, Instagrammable room with some practical set design that’s super cool, that attracts influencers. Or a custom interaction that you wouldn’t have with a normal VR headset. There’s a lot of haptic devices coming out that no one is going to have at home, but you can have that in the arcade and get people super stoked to come out and see the arcade.
That kind of stuff, having those unique items–you don’t want to go overboard, but if you have a few unique items you can put up at the front of the shop that attract walk-ins, that builds word of mouth and gets people talking on social. That can build long-tem value for you, even though 80 percent of your business is built on the traditional VR format with generic bays. You can have that 20 percent be special stuff that keeps you competitive in the market and can help your business grow over time.
In five years I think arcades will be a flourishing business. I also think that in five years we’re going to have cross-platform between home users and arcade users. We’ll have immersive worlds, interconnected immersive worlds like MMOs, building on things like Rec Room today and some of the stuff Oculus is doing. The arcade users will be playing with home users. People in the arcade will have a better experience, because there’s going to be more human beings to play with, since they’re also connecting to the home user ecosystem.
In that way, they’re going to be able to build each other up. We’ll have a very different experience where they bring value to each other, unlike in the ‘90s, when the consoles completely destroyed the arcade business. I don’t think that will happen anymore. I don’t think they’ll cannibalize each other. I think they’ll build and grow together in a unique way.
GamesBeat: What do you think of some of these other features, like Sandbox VR with its motion capture combined with its location? The Void has a space you can walk around in more. If you’re adding a feature that you can’t do at home, what do you think is the best feature you’ve seen?
Iliff: I can give you a very specific answer that I think is a strong synthesis of these different values. One value being, let’s have something unique that people can’t get at home, and then the other value being, let’s have a frictionless experience. How do you bring those two things together?
I love what Sandbox is doing. They’re building really high-concept, blockbuster content, which is going to be what millennials want. That’s super cool. I love what the Void is doing as well. It’s super immersive. You’re grabbing doors. You’re flipping switches physically. You’re interacting. That’s great.
There’s some costs to that process as well. When I go to stuff like this, I’m going to spend five to 10 minutes in a ready room strapping motion controllers to my body, getting a backpack on my back. It’s a high-friction experience. It enforces a model where you’re doing time blocks, where you can only put a certain number of people through every hour or half-hour. You hit that ceiling of throughput, maybe 200 people a day. Even if you’re fully at capacity, you’re not going above that ceiling. There’s a limited, non-exponential business model that comes from it. That’s the ceiling they’re experiencing now, and it’s going to be challenging.
I think there’s a lot of interesting stuff happening with, case in point, Oculus Quest. You can have a lot of the fidelity and the experience, if not more so, with the new finger-tracking stuff they’re doing. I don’t want to call it a mobile headset, because it’s more powerful than a mobile headset, and you also have motion controllers, but imagine walking into an arcade and all you do is just grab a thing off the shelf and put it on. You don’t need motion controllers. You have your hands. You just go in and it’s opt-in, opt-out. You can have as many people streaming through as they want, playing in a fully immersive world. There’s no throughput ceiling there. It’s zero friction.
That’s the world where, ultimately, I think arcades are going to win in a big way. It’s going to be synthesized with consumer hardware. Then you can add things like walking through an area where you get a blast of heat or some scent. You can add unique things. Maybe you have a little practical set design in your facade. You still have a hero’s journey that the customer goes through, like you would on a roller coaster at an amusement park. You’re going through a cave and there’s a video playing and exciting events are happening. You’re going through a journey. You can do all that kind of stuff, but you want it to be as frictionless as possible.
Question: If you build a game that arcades want to host, what is the royalty process like?
Iliff: It totally depends on whether you’re using a third-party platform like Springboard, or if you’re building your own licensed relationships. I believe that the common thing on Springboard right now, if you’re just uploading to Springboard, is they will offer it for six to eight cents a minute. They’re charging the arcades by the minute. If a game’s really hot they’ll go to 10 cents a minute. I haven’t seen it go much higher than that very often.
After that–I believe Springboard is 20 or 30 percent right now. Don’t quote me on that. I actually don’t remember. It’s somewhere in that area. They’re going to take a cut.
Question: Other than the work you’re doing, the games you’re building, what are the games in the VR sector right now that are really impressing you?
Iliff: There are so many things where I love what people are doing. Blood and Truth is a big one. That came out on PlayStation. It’s so immersive, such a cool gangster flick, the classic London heist kind of thing. The interactions with the NPCs and the conversations are so realistic. It’s awesome. The combat is great. What more could you want? That was awesome.
I already mentioned Beat Saber and Super Hot, two fantastically successful games. Very fun, very tight gameplay loop. I also love Fruit Ninja a lot, playing that in VR. It’s very simple, very mobile-focused, but you can play for hours. A recent one that came out is Asgard’s Wrath, a very big triple-A experience with a lot of varied characters, a lot of varied environments. It has some really cool mechanics for shrinking that are innovating in a big way.
Some stuff that hasn’t come out yet that I’ve had a chance to play–our friends over at Vertigo Games are doing After the Fall, which is a new zombie-style combat experience, but not really zombies. It’s more like a winter apocalypse kind of thing. Not only is the creative very cool, but the combat’s very unique. I think they’re doing some really cool stuff with gun combat, innovating on combat. I’m super stoked for them.
Question: And then there’s this Walking Dead thing you’re working on now?
Iliff: Yeah, we’ve announced that. A big piece of that is we wanted to focus on close-quarters combat with zombies. We created this thing called the progressive dismemberment system, which is essentially gore technology. It’s gross. But pretty cool. You can do full impales. You can swipe at an enemy and cut all the way through at any point, so they’ll split apart. You can cut halfway through, and depending on your velocity and angle — we call it context-based physics — it’ll get stuck or lodged, and then it turns into an impale event. You have to pull your sword out.
There’s also a carving mesh, so you can carve the Zorro “Z” in their chest and it reveals all the guts and skeleton underneath. And then full dismemberment at any joint. It’s really insane. The mix of gun and melee combat is unique. We’ve built a lot of really interesting animations. You can clip your blades. You can do a lot of different stuff. We’re trying to get to a visceral experience like you see on the show.
That’s going to a whole new place. We didn’t want it to just be another zombie shooter where you’re just shooting from far away, or if they get up close you just waggle your weapon at them and they fall over. We wanted to do something that was–oh, you can also grapple with them. If they get close enough to bite you, you can grapple with them and hold them at bay. Then you can execute them or knock them back.
It sounds super gory, and it is. It might be the most gory game of all time. But it’s focused. That’s the goal. Our goal wasn’t to build a big open-world thing with different storytelling options, where you could have character depth. That’s cool stuff, but we wanted to focus this time specifically on combat. We’ve done that with other titles, like our Westworld title. We wanted to focus on combat and build out our combat technology.
GamesBeat: I’m curious how that Westworld title came about.
Iliff: We were talking to HBO really early on. Jonathan Nolan got interested in our work. It originally started out as an idea for a marketing stunt, to do a short experience for a smaller budget. But as we started iterating and designing and building out the storyline and playing in the world bible that Jonathan had created, all of a sudden HBO said, “You know what? Let’s double down on this thing. Let’s make it a stand-alone. Let’s do a real game.”
That’s what we did. It’s a survival thriller. You play as a host who wakes up in a narrative loop in an old mansion. You start out in something like a standard horror trope, where this masked serial killer is coming after you and have to hide and dodge them while you uncover the storyline around this mansion. You have several cycles of that, and then eventually you wake up. The whole first act is just that mansion, but as soon as act two hits — there are five acts — you wake up in the narrative design labs of the Mesa Complex, and everything is chaotic. Everything is going crazy.
That’s essentially the end of season one, where the host uprising happens. I’m trying not to spoil everything, but if you haven’t seen Westworld, go watch it. It’s fantastic. There’s a big buildup in season one leading all the way up to this moment where our game begins. It ties in pretty intricately with the TV storyline in a lot of cool ways. It’s a fun experience.
GamesBeat: What did you think of the Medal of Honor VR game? They’ve been working on it for two and a half years. It’ll be three and a half years by the time it’s done. They said there were 180 people working on it, and there are 50 levels. That seems like–I mean, Oculus is funding it. But it seems like way beyond the budget that anybody else could even come near right now in VR. I think that’s a fair statement.
Iliff: That’s a very fair statement. Employing 180 people for two, three years–
GamesBeat: Do you think you’ll ever get there? Or do you not foresee that happening for quite a while?
Iliff: Well, it depends. I don’t know if I ever want to get there. I’ll be honest. I don’t know if I want to be running a ship that’s 180, 200 people strong, where you’re putting all your eggs in one basket for two or three years. God bless them for doing that. It’s awesome. The market needs it. Let’s build these big triple-A games that are 40 hours long and are huge and awesome.
Personally, for what we’re doing, we’re able to focus. Because we’re smaller and more nimble, we get a lot more bang for our buck, every dollar we spend. A lot of times these big studios that are used to making big triple-A titles, they’ll have a lot more overhead, a lot more things that have been in place for so long that it’s not the most efficient way to make a game. A lot of the stuff we’re making, we can make something that only costs us $5 million, but it looks and feels like it’s $20 million. A lot of times with big studios that have been around a while, they’re going to be less nimble. Their $20 million looks like $20 million.
There’s an advantage to being small. I think our preference is to stay nimble, stay focused on what the market needs, and build games in that range.