Owlchemy Labs and the future of Google in VR
Google, the internet related-services and products giant, has been continuously investing on new platform and technologies to strengthen its leadership. The company has been aggressively investing in new ventures such as autonomous vehicles, voice based services, analytics and virtual reality (VR) to be future ready.
In an interesting move last week, Google has acquired Owlchemy Labs – The global leader in developing immersive VR content. Google has been aggressively working on the VR front with two major acquisitions in the last few years such as Eyefluence- An eye tracking startup and Magic Leap that was secretively working on head mounted retinal display.
Major players such as Facebook Oculus Rift, HTC Vive, Sony PlayStation VR, Razer OSCR, Fove VR movie studios have also spread their wings in the gaming and entertainment space. Virtual Reality content is expected to grow at a CAGR of 127.97% during the period 2016-2020. On the flip side, VR is expected to be a $30Bn industry by 2020 with Entertainment being the core driver of the platform.
Hardware + Content Play
In a device agnostic world, hardware is being increasingly clubbed with services to create a unique positioning in the market. VR which is being extensively used for entertainment would require a strong content production at the backend for the product/platform to be successful. This acquisition will help Google to strengthen their VR business with an end-to-end control over the VR ecosystem.
Developing next-gen Hardware
VR is at a very nascent stage and development of content and platform will be interdependent. Further, development in terms of new features such as hand gestures to provide immersive and engaging experience would require it to be in sync with how content is taking shape and acquiring a global leader will only give it an edge to deliver strong VR products.
Content is the next big thing and even though Google and its products dominate video and other content categories, it has little or no control over the content generated and published on its platform. As part of their VR effort, it has invested in creation of compelling and engaging content for VR with little success. Google products such as YouTube, Street view, photos and Google Earth are interesting, however, it does not provide high engagement like the ones provided by Entertainment content.
Google has been late to the VR party. However, Facebook has its own set of problems with Oculus Rift ranging from lawsuits to sudden closure of its content factory. Google now has an upper hand of making it big in virtual reality space with their biggest rival Apple being vocal about AR being the game-changer and focus area. On the other hand, Owlchemy will get the funding and support to scale its content business riding on the long-term plans of Google for VR platform which otherwise would have gone out of steam in the slow growing VR segment like its peers.