The German city of Hamburg is setting itself up as a potential hub for virtual reality startups
Virtual reality (VR) is a technology that’s been on the cusp of usefulness for over two decades. Until recently, bold claims for its potential have never been fully matched by the capabilities of the technology.
In the past few years, that’s changed. The technology has become usable and, perhaps more importantly, there are genuine practical applications for it. That’s especially true in the fields of industry and gaming/entertainment.
VR-focused businesses are popping up all over the world. Cities are vying to offer attractive locations, grants, tax breaks and infrastructure for the new VR generation. One such city is Hamburg, Germany, which is aiming to become the VR capital of the country – and perhaps even Europe.
It’s building on a strong base. Hamburg, with a population of 1.8 million, has the highest concentration of creative agencies in the country. This is a reflection of the infrastructure, communications and transport – it’s a seaport that also has good rail and air links – and it appeals to creative people.
It lacks the low cost of living and general grunginess of Berlin (although both those factors are evaporating fast in the startup-riddled German capital) but still has a Bohemian feel and a broad mix of nationalities. It’s a pretty city, too, both architecturally and in terms of open spaces, yet it also boasts an appealing nightlife, especially along the legendary Reeperbahn in the St Pauli district.
One of the newest additions to Hamburg’s VR lineup is the VRHQ, a collaborative project between four startups whose business goals are complementary to each other.
The four companies are: SpiceVR, which specialises in 360-degree movie production, immersive media and apps; Spherie, a spin-off of SpiceVR with a drone that shoots in 360-degrees without filming any part of the drone itself; Noys VR, which focuses on VR music concert experiences and bringing people together in virtual concerts; VR Nerds, running Germany’s largest VR-related blog and programming VR applications such as Tower Tag (VR multiplayer shooter game) and VR Insights (VR market research tool).
In early 2017, the four companies wrote a joint concept proposal, an application for business space in the M28 Speicher building in the Speicherstadt region of Hamburg. The building was intended to be a space to help creative people and concepts evolve, and rents are subsidised accordingly.
The VRHQ proposal won two floors of the building initially, then gained a third once its concept was implemented. This achievement is more significant than it might first appear.
There’s not as much venture capital available in Germany as in the US and some other countries. The barrier to entry is therefore high, as are the costs of failure. Companies must scrabble for funding if they are to get off the ground.
“We want to make VR accessible to people, help them understand the technology and the possibilities,” said Andreas Raabe, business director of SpiceVR.
Downstairs from the main workspace will be a VR Experience Hall, where the companies can showcase their own work and the best of other VR firms’ creations.
Experiencing VR worlds
This space is meant to function as an open-to-the-public area where people can experience VR worlds for the first time, doubling as a venue for meeting clients, engaging with other companies and schools, and holding workshops.
“From our experience, it takes creating a dialogue with other people, making them understand what VR can do and how it works, to create a new business idea,” said Raabe.
“We know what is possible in VR and what this technology can do. But we don’t know all these millions of problems people have to solve every day in their particular businesses. When we manage to bring these two things together, new business ideas involving VR can be the result.”
At that point, once a new business idea has been formed, the client/partner can take their idea to the prototype innovation lab on the sixth floor of the building. Here, they can work with VR experts including designers, developers and project managers.
“We provide the team, a lab and the necessary infrastructure for them,” he said. “The client can also have a desk to come and work with the team in the VRHQ to bring their idea to life.”
Sandwiched in between, on the fifth floor, is a university of applied science with a masters degree programme called Digital Reality. Students on this course can be involved in the VRHQ’s development sprints and work on actual projects with real clients. “They can help us bring in new, fresh ideas and different perspectives,” said Raabe.
Watch this space
As interesting as the VRHQ story appears, so far only the prologue has been written. The VRHQ will only fully open its doors in 2019. For now, at least on the commercial side, there’s little to shout about. “We have some projects in the maritime and logistics sectors but I can’t talk about them right now,” he said.
It remains to be seen whether the four companies involved can create an ongoing viable business that sells and promotes VR technologies – especially profitable ones. Virtual reality may have arrived as a practical technology, but that doesn’t necessarily mean its “early” entrants will be the ones to make it a success.
Time will tell, but Raabe is optimistic about the prospects. “One poject we are working on is for Deutsches Elektronen-Synchrotron (DESY), the particle accelerator in Hamburg. This is not really to improve their business operations but to help people understand what they actually do. DESY is mostly funded by the public, but few people understand what they work on.
“So we created a VR ‘edutainment’ experience for them, where people can make their way through the DESY facility and jump into the particle accelerator and travel back to the beginning of time – see the universe arise and so on.”
A VR simulation of the history of the universe – as business ambitions go, they don’t come much bigger than that.