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Sony Joins the VR, AR, XR Headset Race

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Sony, typically either too early or too late to the party, has now entered the augmented/virtual reality (AR/VR) space with its mixed reality (XR) headset featuring see-through 4K OLED Microdisplays. The company highlights its unique rendering technology, a six-camera and sensor setup, and a ring controller that enables virtual manipulation and creative activities like drawing. Users can also integrate the controllers with a keyboard for more complex content creation. Sony’s ambition is to make this system compatible with other content creation companies, facilitating real-time collaboration. This could enable CAD professionals to work on a model simultaneously or review and discuss 3D assets together. The device, powered by a Snapdragon XR2+ Gen 2 processor and equipped with motion tracking, could allow animators to perform mocap-like animations and poses themselves, potentially democratizing the animation industry and becoming a valuable tool for many.

I think this image is perhaps far too illustrative in rendering our AR VR future in the Matrix.

Sony is targeting its headset at content creators specializing in 3D design, CAD, and movie editing. In an unexpected move, Sony is collaborating with Siemens and its Xcelerator platform.

“Siemens is partnering with Sony to enable immersive engineering, a critical building block for the industrial metaverse. Together, we are creating an environment where it will be possible to experience the realities of physics, without the bounds of time to profoundly improve how our customers work and collaborate,” said Cedrik Neike, CEO of Siemens Digital Industries.

Xcelerator, which includes CAD tools like NX and SolidEdge, electronics design software, and Teamcenter, aims to be the leading pathway towards complete digitization for large corporations. Sony, by targeting CAD professionals and business users with its headset, is focusing on a niche market. These ‘lighthouse’ users, who can invest in and utilize these tools throughout their workday, could help Sony establish a dedicated and well-served user base, avoiding direct competition with giants like Google, Apple, and others. Despite Sony’s significant market cap of $113 billion, it is a minnow a sea of killer whales occupied by Microsoft’s $2.7 trillion, Meta’s $900 billion, and Alphabet’s $1.7 trillion.

“Tank, I need a pilot program for a B-212 helicopter. Hurry.”

The XR Race

Originally, Microsoft Windows served as the gateway to the world of information. Subsequently, aggregators like Yahoo! organized what the world viewed. Google’s search bar then emerged as the conduit to all knowledge. Mobile ISPs initially dominated access with their walled gardens, but soon, phone operating systems and app stores became the primary gatekeepers of global information. Now, Meta, Apple, and Samsung suggest that XR headsets will be the foremost access point to the information world. At stake are not only lucrative app sales but also the potential for standardizing a vast array of future content – including movies and games – on specific devices, software, and ecosystems. These industry giants are wagering that headsets will be key in determining access to this content.

Today, if you search for something on Google and it doesn’t appear, you might mistakenly believe it doesn’t exist. This illustrates the market power that companies believe a headset could wield. It’s an odd shift in mindset, considering we never viewed computer mice or headphones as such critical bridges to information. Nonetheless, billions are being invested in this quest for long-term information dominance. Meta, for instance, has suffered a staggering loss of over $46 billion in value due to its metaverse ventures, with its virtual unit losing $13 billion in 2022 alone. This could be one of the most ill-advised business moves in history, with virtually no return on investment and future hardware advancements rendering the current efforts obsolete and valueless. Never before has so much been spent for so little return.

Nevertheless, Meta acquired lens 3D printing company Luxexcel for use in AR headsets. At this year’s International CES, Apple announced it will begin shipping its Vision Pro “spatial computing” headsets in February 2024. And Applied Materials, Inc. is partnering with Google to develop advanced AR technologies, combining Applied Materials’ expertise in materials engineering with Google’s platforms and services to accelerate the creation of AR products and experiences.

Sony’s resilience in developing its PlayStation business over the years, generating about $26 billion annually (a third of the company’s total revenue), is noteworthy. While Sony is acquiring content companies to enhance its gaming platform, competitors like Microsoft are pursuing this strategy more aggressively. Apple, on the other hand, profits by hosting games made by others on its platform, while it can take its cut. Sony’s focus on a specific niche in the headset market might be a strategic move akin to Apple’s initial venture into education-specific computing, which eventually led it to become a leader in desktop publishing and a desirable computer brand overall.

And therein lies the rub. The partnership between two large companies like Sony and Siemens may lack the agility of a nimble startup, but it could still capitalize on the significant sales opportunity within large corporations. An interesting alternative could have been for Sony to acquire a company like Rhino3D and launch a free creation service to expand its user base alongside the Siemens partnership. This approach might have provided more leverage and facilitated the development of an independent user community. As it stands, Sony can tap into Siemens’ considerable customer base but risks driving competitors like Autodesk and Dassault towards other alliances. The choice Sony faces is complex, and the AR/VR market, particularly in the CAD authoring sector, will likely see more competition, potentially impacting the 3D printing market significantly.

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