Although Zuckerberg and Co. spend billions of dollars on virtual technology every quarter, the broader VR startup ecosystem is still underdeveloped in 2018. It’s down a few years from its peak in 2016, when investors threw money into the sector expecting only Oculus-sized returns. Most of their investment will slowly disappear.
Every time a big institutional investor bets on a VR startup these days, it makes fairly well-known news — even a seed round. Earlier this week, I sat down with the folks at Gym, the basketball virtual reality app that closed an $8 million seed round from Andreessen Horowitz. Other backers include Founders, Inc., Todd and Rahul’s Angul Fund and Balaji Srinivasan.
Gym class VR is what they call pure gaming – the experience is hardware-based, and the mechanics only make sense in virtual reality. Therefore, in theory, the bet in the company is not only on the potential of the team, but also on the near-term viability of the place where they work. Heavy investment in the sector, but uncertainty over the timing of further headset adoption, remains a risk.
Even among other VR titles, the game itself is early – the gym class isn’t even available in the meta quest store. So far, nearly 1 million downloads of the free app have taken place on the Meta App Lab storefront, a hub for games that show early promise but may have a lot of development ahead of them before they’re ready for prime time. So far, the gym class has gotten quite a bit of attention before even landing on the official Quest store thanks to Tiktok’s gameplay footage.
Paul Katsen, head of product at The Gym Division, told TechCrunch that the startup is envisioning the experience as a social hub rather than a simple game, allowing people to close into a virtual space and bond over the sport and culture surrounding basketball. The gym segment is focused on basketball for now, the company says, and has no immediate plans to build a wider range of sports experiences.
The company’s upcoming official launch of the Quest Store is a big moment for the company, but it proves just how important the Meta platform is to any and all virtual reality developers. Late last month, Meta prompted the announcement of a price hike on its long-awaited Quest 2 headset, citing the need to invest in a low-margin device.
“If you’re going to rely on these distribution platforms, you’re not going to build your own distribution platform,” Katson says.