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Augmented reality is finally ready for commercial success

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    Ray Sharma

Augmented reality became a mobile reality in late 2009. In truth, the concept for the technology has been around for much longer. The intermixing of virtual objects with the real world has caught our imagination for decades. And this technology has already been used for many years in fighter jets, providing flight information to pilots through their heads-up displays.

There is no question of the coolness factor of AR technology. We have seen many world-class brands like Lego, Star Wars, and Avengers commercialize the technology. Entire startups like Layar or Ogmento have raised tens of millions in startup capital to pursue developing a business model based on AR.

But any major consumer technology revolution needs a practical application. How a technology works is less relevant than why it is useful. The application and its usefulness is what drives mass-market appeal and provides the foundation for a real business. Web browsing did this for the Internet; mobile email for the smartphone. Augmented Reality presently lacks a mass market application which truly captures the imagination of the user.

AR may very well be the coolest $0 billion technology market out there, but there simply hasn't been sufficient monetization of AR to merit the attention of the developer community at large. This is the classical metaphor of the chicken and the egg. We need an application to inspire users and we need users to inspire developers.

XMG Studio has an interesting story relating to this technology. When our company launched in late 2009, the first game we released was a multiplayer AR game. We chose to do this as a test of our development team, especially since AR was very bleeding edge at the time and nobody had yet successfully made a multiplayer game largely due to the extreme complexity and mathematics involved.

We ended up getting lucky and Pandemica: AR Shooter, a game in which the user fends off invading alien organisms by blasting them with lasers, went on to win Best Augmented Reality Application in the 2009 Best App Ever Awards. While the game was a critical hit, it did not find commercial success. We studied the market closely and realized that it was impossible to make AR financially successful at that time. This led us to better understand the challenges of monetizing an AR game. But we used the notoriety from the award to kick our studio off to a great start. We stayed away from further AR development for two years until such time that we believed in the market. We also parlayed the success of Pandemica into convincing Sony Pictures to partner with us on the license to develop an AR game based on the Ghostbusters franchise.

How did we know that AR could not possibly be commercially successful in early 2010? Quite simply it was a matter of install base. To begin, AR has only been available to iOS developers since the launch of the iPhone 3GS in mid-2009. Even throughout 2010 as compass technologies and toolkits evolved to support AR, the absolute number of devices which could support the technology was small. This issue has gone away now as every iPhone since that time has shipped with AR capability.

From a platform perspective there is even better news. AR has now spread to other major ecosystems. AR is available in Android, Microsoft Windows (though in early stages) and is a key technology in more hardcore gaming platforms like the 3DS or PSP Vita. It's no longer the platforms or the devices that are holding back this industry. What we now need is the right application.

These are all challenges that XMG will have to face with the upcoming release of the most highly anticipated AR title to date, Ghostbusters: Paranormal Blast. This is our attempt at really sparking the mass market appeal for AR in the context of games. In this app, users will become Ghostbusters catching and collecting ghosts in their own city through a location-based Augmented Reality battle mechanic. The fit between ghosts in AR is similar to the fit of birds in a physics game. The theme fits the genre nicely.

Once AR games come to maturity and begin to effectively monetize, it will not take long for other AR apps to achieve mass-market appeal. And while our specific interest is games, we recognize that the significance of this technology is well beyond simple entertainment. This technology literally has the ability to add another dimension to our sensory interaction with the world.

We already have the three physical dimensions of reality and  time, and now we can introduce information as the fifth dimension. We will not only watch a soccer game, we have access to information about the teams and players. We not only listen to music, we recognize the song and pull up info on the artist and the corresponding music video. Our entire experience with reality will soon be supplemented with AR information on demand.

Ray Sharma is the founder and CEO of XMG Studio Inc., currently one of the largest independent mobile video game developers in Canada.