Cannes XR Virtual: VR, AR Industry Learns to Take a Long Term View

Cannes XR
Credit: Marché du Film

Somewhat appropriately, participants for the Cannes XR program will gather virtually from around the world this week for the Marche du Film’s three-day event dedicated to virtual (VR) and augmented reality (AR) projects.

Running June 24-26, Cannes XR Virtual will see more than 55 pieces presented through virtual art gallery Museum of Other Realities, spanning XR projects in development through to premieres of new works.

Senior figures from tech firms Google, Facebook, Microsoft, Intel, HP, HTC, Huawei, Epic Games and Unity are among those participating in Cannes XR’s Development Showcase, which has 23 projects seeking production and distribution support. There are awards too, and a virtual conference with pitching sessions, keynotes and panels.

This virtual gathering of the XR industry takes place at an odd time for the nascent sector. Even the most ardent of XR enthusiasts admit that the industry has failed to live up to early growth predictions. Yet many still believe in its long term potential.

To date, VR headset sales have been much more modest than expected, amid issues with the technology, cost and ergonomics of the devices themselves as well as a lack of content. As a result, high profile firms such as Jaunt and Magic Leap have run into difficulties, while others like the BBC have exited after experimenting with the technology.

George Jijiashvili, a senior analyst at research firm Omdia, predicts the number of standalone and tethered VR headsets will grow from 13.1 million in 2019 to 55.5 million by the end of 2024. “It’s a big growth,” he says. “But if you take a step back and compare it to TVs and smartphones, it is a very small addressable market.”

That’s why content creators have only dabbled with XR, explains Jijiashvili. “For most companies, it’s not viable to invest a lot of money in this category when only a small number of users could potentially be exposed to that content.”

However, a new generation of headsets – notably the Facebook-owned Oculus Quest which launched to rave reviews last year at a relatively affordable starting price of $399 – could be helping to spur the market.

Jimmy Cheng, director of content and business operations at XR content and technology specialist Iconic Engine, says the global XR market has seen “a lot of improvement” since better headsets came out last year, citing the Quest as well as the HTC Vive Cosmos.

He says the launch of 5G is also significant, with the technology’s improved bandwidth helping to improve the streaming and downloading of large XR files. 5G has also drawn telecoms firms into the XR sector, with companies keen to use VR to showcase the capabilities of the technology.

Iconic Engine, a spin-off from Digital Domain, is supporting telcos like France’s Orange, Germany’s Deutsche Telecom and Hong Kong’s PCCW develop their own VR offer. “What we need right now is more buyers / platforms to step into XR distribution so this new media can reach more end users,” says Cheng.

There’s also talk that the coronavirus crisis has boosted sales of headsets too as people stuck at home have sought new ways to entertain themselves. “Four or five years ago, everybody thought it wouldn’t take long for headsets to be in people’s homes, but it never happened. This might be the moment the industry has been waiting for,” says Myriam Archard, chief of new media partnerships at Montreal VR exhibition gallery Phi Centre.

Cannes XR program leader Elie Levasseur says the billions of dollars being invested in the sector by tech firms such as Google, Facebook, Intel, Samsung, Apple and Microsoft make him “very confident” that XR will eventually become a mass market phenomenon. “At this point, we can feel the potential of the technology.”

An event like Cannes XR, he adds, can also play a role in helping to develop the industry by connecting the tech players with the artists and creators who can make content for a mass audience.

He cites the Cannes XR Development Showcase, which does just that. “We are open to any kind of projects from movies to games to art installations and even theatre,” he says. The overarching selection criteria is “a strong narrative,” adds Levasseur. This year’s Showcase features projects dealing with topics such as artificial intelligence through to climate change.

In the absence of a mature marketplace for XR content, Levasseur sees Cannes XR as a type of incubator or accelerator for the sector.

To date, however, 360 degree video content has not been a big driver of the VR market. “Speaking to the VR manufacturers, I don’t get a sense that they are seeing huge amounts of viewership of video content,” says Jijiashvili. Earlier this month Hulu’s VR app quietly announced that it is ending support for a number of devices amid speculation that not enough people were watching its video content through VR.

Instead, gaming has been the most popular segment of the consumer VR market, with popular titles including “Beat Saber” and “Resident Evil 7.” Gaming is also driving much of the innovation in the sector.

XR is, moreover, proving itself in industries like education, training, design and healthcare. Ford uses VR to help design its cars, while BP uses the technology for immersive training exercises. The U.K.’s National Health Service (NHS) is also using VR for psychological therapy, tackling problems from psychosis through to fear of heights. Last month, AR specialist Magic Leap announced that it would pivot from developing consumer products to focusing on its enterprise business.

There are also signs that social VR could be a significant market in years to come, despite VR’s reputation as a solitary experience. Facebook, for example, is currently in beta on Horizon, a type of Second Life meets VR experience, which has a mix of social places where users can mingle and chat, and other areas where they can play games against each other.

Levasseur compares the XR industry in the 2020s to the early days of cinema, where practitioners are busy experimenting and “developing the new language” of the medium. He thinks XR could potentially be another form of art”, which is different from cinema or theatre, and that will need dedicated schools, venues and companies. “We have to invent all of these things, and that will take some time.”

Says Levasseur: “In 10 years’ time, maybe an XR section inside a movie festival will be heretic.”