8 major challenges the Australian VR industry is facing right now

Posted by Patricia | May 14, 2017
Challenges of virtual reality in Australia

In my previous article I wrote about the Australian Virtual Reality Ecosystem 2017 and the more than 50 companies in Australia that are driving new business ideas and VR solutions. I spoke with Scott O’Brien – HumenseUrsula Lane-Mullins – ACME VirtualEddie Cranswick – Relax VRLecky Lao – VR CornerMichela Ledwidge – Mod ProductionsNathan Beattie – AVRNBen Wong and Charbel ZeaiterAcademyXIAdam Halley-Prinable – a VR Developer, Patrick CatanzaritiDevDiner and identified major hurdles and deficits. Working on innovative VR projects is not always easy in Australia. Here are 8 challenges that the Australian VR industry is facing right now:

1. High Prices and Difficult Access Hinder Large-scale Adoption

The high prices and the effort necessary to get access to VR (early adopters usually need to get these products from overseas) make it hard to achieve a high adoption for a broad population. “It involves paying shipping costs, customs fees and a hefty USD to AUD conversion rate. It has made adoption quite tough to spread beyond enthusiasts as it is way too expensive for the typical Aussie to justify spending so much on”, says Patrick Catanzariti from DevDiner. “For instance, setting up something like Vive or Oculus will set you back up to $4,000 at least just to set up the PC or the VR laptop with the actual system”, emphasises Ursula, thus highlighting a hefty price tag that comes with early VR systems.

2. Lack of VR Talent

Here’s the second significant challenge Australia is facing – the number of good VR developers. The reason being the technology itself is fairly new so naturally it needs some time to have technical VR experts in the field. Also, Patrick doesn’t believe that “developers out there realise the potential of this industry if they start to learn to build VR.” It could lead actually to a positive snowball effect and create a sustainable tech community. “The more developers we have, the more knowledge we can have shared among everyone and the more we can help shape the future of VR as an industry leader,” mentions Patrick enthusiastically.

So companies will face the challenge of finding good VR people. “Finding the right development talent” is a challenge for Eddie, and “even design talent is actually one of the biggest struggles probably a lot of other companies, and we have to deal with in the first place.” This point is iterated by Charbel, who says that “Hybrid skills such as storyteller, artist, coder, storyboarder, sound designer, director—all these different disciplines are starting to becoming one.” They are necessary to create immersive experiences.

3. Terrible Internet Speed

Internet speeds are extremely slow in Australia. Patrick says alarmingly: “I know we’ve got some form of the NBN arriving around the country that might help slightly, but overall, we’re just not ready for what’s coming. Streaming 360° video for VR barely works on my home Wi-Fi. I’m incredibly worried we’ll be left behind when 360° video also starts to include depth information and becomes higher resolution”. He mentions the internet infrastructure that appears tough to upgrade and political battles which put Australia back makes it hard to keep up with emerging technology. Patrick can see Aussie VR/AR companies moving overseas out of sheer necessity in the future, and he wishes it wasn’t so.

4. The Majority of Australians Aren’t Aware of VR and Educating Them Takes Time

Having a great first-time virtual reality experience is crucial. VR developer Adam Halley-Prinable stresses: “A 360° video and an actual VR experience are very different and the problem is people will put on a Google cardboard, watch a blurry YouTube video and go like ‘oh this is what VR is all about’ and dismiss the whole thing”. Especially, in the beginning, there will be lots of unprofessional products available that could lead to underwhelming experiences. Thus, knowing the difference between 360° videos, VR and AR is crucial, so people understand the opportunities and limitations. They can appear quite similar that sometimes even experts are using the terminology incorrectly. Here’s a differentiation between those three:

Lecky Lao from VRcorner looks at it the other way around. “Many people haven’t even tried Oculus, Google Daydream, VIVE or even Google cardboard in their lives before. For 98% who come to his VR arcade, it’s the first time ever that they tried VR. So it’s still a long way to educate the customer” in his point of view.

Also, education from an institutional point of view is still tough according to Patrick: “The tech is new, and things are changing rapidly. This makes it tough for universities and others to teach easily. You can’t put together a static course and have it to be relevant within a year.” As the technology is changing “like wild” he says, “Self-learning is becoming incredibly essential and educational institutions need to find ways to teach people this very skill—learning to learn, if we’re going to have a developer ecosystem that can keep up.”

5. Local Funding Barely Goes to VR Projects

This argument goes along with smaller companies not being able to pay as much as larger corporates which scare potential developers and designers away. Adam says, “There is indeed talent out there. The only reason they aren’t making VR stuff right now is because they’d starve to death because no one will pay them for it. So if they can get their hands on a grant […], these are talented people can make VR better”.

Whether you are a single developer or startup, creating a product costs resources and they are facing rough times as “there is less money for VR in Australia in comparison to countries like US. There seems to be a lot less investment on the venture capital side, and the government isn’t all that big on investing in new tech companies at the moment,” says Nathan Beattie from the AVRN. Some smaller investments were placed from accelerators or larger corporates such as Google, but so far in a reserved way as uncertainty and risk are too high.

Michela Ledwidge from MOD production emphasises that “public funding for interactive media production is marginal compared to limited funds available for film & TV production”. There are some unconfirmed statements of AR and VR specific accelerators, but there hasn’t been an official announcement.

Almost every person I spoke with mentioned the lack of financial support and worries about the funding distribution. Ursula, therefore, raises her concerns: “It could go to the major game developer studios and the film studios as opposed to people like us who are just starting out”.

6. Uncertainty on Corporate Side Due to Missing Prove of Concept

On the other side, corporates are hesitating to go that next step as best practice success stories are rare and not proven in terms of business model and adoption. In respect to that, Nathan says another challenge is “convincing clients to use VR. Since it’s a new technology, most people are sitting back and waiting for others to take the leap, since the benefits of VR haven’t been proven yet.”

Along with the lack of proven concepts, people experience controversial behaviour from clients. Those who want to see success stories on the one hand and the other hand, they want to be the first in their market to work with VR. Therefore Ursula Lane-Mullins from ACME Virtual emphasises: “if you want to be first to market you have to do something NOW”.

7. VR is Being Treated as Gimmick

Some companies are using VR as a quick PR story, just because they want their brand to appear trendy and innovative, which results in a very superficial, short-term focused view. This kind of thinking can actually harm the VR industry when VR experiences are created that actually solve no problem. Ursula had to deal with people “who seemingly treat it like a gimmick, and we don’t treat it like a gimmick because we know that in five years it’s worth 162 billion dollars”.

Furthermore, Lecky worries that “businesses don’t see the benefit because it’s expensive like corporate training. VR can do corporate training and education, but it’s expensive, and they wouldn’t spend a few thousand dollars. They don’t know how much benefit it can get.” It appears that additional to the high risks and uncertainties for some Australian corporates, there hasn’t been the right solution for the right budget yet.

In addition, Scott O’Brien from Humense thinks that “there are not enough people out there in the market, especially in the high-end corporate who are qualified, cohere and convincing enough to be proposing VR and AR strategies (most people haven’t had enough experience yet)”.

8. Australia Depends on Overseas

Australia finds itself in a circle of dependencies, which can lead to a slow down for innovative projects. “The problem in Australia is if you are a service-based AR, VR or 360° company you are relying on corporates buying from you. However, all the top corporates get instructed by corporates from America, Singapore, Hong Kong,” Scott says. It seems like there’s not much trust and support from the corporates for VR and new technologies in that regards. More promising sectors other than services could be the gaming, entertaining or education.

Do you think Australia will overcome these challenges and play an important role in the future of VR? Read here the opinions of local experts about the future of VR in Australia or global treats impacting the progress of the VR adoption and development.

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