Digital Domain Holdings, operator of the world’s largest independent visual-effects studio, plans to sharpen its focus on virtual reality technology initiatives after beefing up its senior management and recently raising fresh funding.
“We are strongly focused on developing our business model of technology-plus-entertainment in the virtual reality industry,” Peter Chou, the chairman of Hong Kong-listed Digital Domain, told a press conference on Wednesday.
The company expects to bolster that effort with the help of new high-level recruits to its board of directors. These are: Wei Ming, the former general manager of Alibaba Group Holdings’ digital entertainment business unit; Pu Jian, a vice-president at mainland Chinese conglomerate Citic; Alan Song Anlan, the managing partner at SoftBank China Venture Capital; and John Lagerling, the former vice-president of business development for mobile and product partnerships at Facebook.
Wei was also named as Digital Domain’s new vice-chairman and chief executive of the company’s fast-developing greater China business unit.
Chief executive Daniel Seah Ang said the mainland, which is forecast to be the world’s biggest movie market this year, is now providing many opportunities for the company to expand its media and entertainment business, as well as further penetrate the nascent marketplace for virtual reality content and services.
Digital Domain runs award-winning movie visual special-effects studio Digital Domain 3.0, which also provides services to major commercial advertisers such as Nike and Apple. Canadian subsidiaries Immersive Ventures and IM360 Entertainment are involved in creating original virtual reality content.
The company has been expanding into virtual reality content amid rising global interest for virtual reality headsets developed or set to be introduced by the likes of Samsung Electronics, HTC and Lenovo Group.
Worldwide revenue for the combined augmented reality and virtual reality market is forecast to increase 130.5 per cent to US$13.9 billion this year, up from US$6.1 billion last year, according to the latest estimates from research firm IDC.
Virtual reality technology immerses a user in an imagined world, like in a video game or movie, with the aid of an opaque headset, such as HTC’s Vive and Google’s Daydream platform for Android smartphones.
Augmented reality, meanwhile, provides an overlay of digital imagery onto the real world with the use of a clear headset like Microsoft’s HoloLens or an advanced smartphone that supports the technology, such as Lenovo’s Phab 2 Pro.
"Social virtual reality development is gaining traction, and Digital Domain is well-poised to lead the virtual reality industry ... and develop more relevant technologies in the future," said new company director Lagerling about the creation and use such content in social media.
Digital Domain forged a strategic partnership with Alibaba-backed online video platform Youku Tudou last year to step up development of virtual reality content for mainstream distribution on the mainland. E-commerce giant Alibaba owns the South China Morning Post.
In addition, Digital Domain also raised fresh funding in the fourth quarter last year to support its business expansion.
Those include: HK$38.5 million from Paul Jacobs, the executive chairman at US tech firm Qualcomm; HK$309 million from the Munsun VR Fund, a limited partnership managed by Munsun Asset Management (Asia) that is owned by China Precious Metal Resources Holdings; and HK$200 million from red-chip Citic, the mainland’s biggest conglomerate, and SoftBank China Venture Capital.
The new initiatives by Digital Domain this year are expected by management to bolster its overall business moving forward.
The company reported in March a wider net loss of HK$479.4 million last year, from HK$156.3 million in 2015, amid rising operating expenses.