Jan 2, 2019 · 30m · a16z
a16z Podcast | Virtual Reality v Augmented Reality, and What's Next
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, host Chris Dixon and Wired senior writer Peter Rubin analyze the strategic rivalries, technical challenges, design paradigms, and narrative potential of emerging virtual reality and augmented reality platforms.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 6.7 Guest teaching 3.2 Guest disagreement 1.0 The host pushing back 2.2
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 14:19 Guest cautions host against assuming Nintendo will enter VR
In a remarkably friendly episode, Rubin gently pushes back on optimism about Nintendo entering VR by pointing out their multi-year delays in adopting new technologies and Miyamoto's reserved statements.
Hardest push from the host ▶ 21:30 Host pushes back on the feasibility of imposing early hardware standardsDixon challenges the premise that hardware standards can be easily imposed on VR early on, comparing it to the rapid evolution during the 1990s PC Pentium era.
Biggest teaching moment ▶ 26:34 Guest explains missing middle tier in modern gaming economicsRubin educates the host on how the gaming industry lost its mid-tier publishing market, explaining why VR will see a revival of AA budget games rather than $100M AAA titles right away.
The host holds their own ▶ 18:29 Host details spatial audio physics and binaural head recordingDixon takes over the explanation to educate the guest and audience on how human ears parse sound directionality and why Chris Milk uses dummy heads with plastic ears for 3D audio recording.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Technical Differences and Development Challenges: VR vs. AR | 7 | 2 | 1 | 3 | Chris Dixon takes an active analytical role, pushing past basic interview questions to explain why low-latency real-time machine vision is the core bottleneck for AR compared to VR. Peter Rubin warmly agrees with Dixon's technical assessment and builds on his points regarding developer toolchains and Oculus talent recruitment. | |
| Divergent Use Cases: Recreational VR and Enterprise AR | 6 | 3 | 1 | 2 | Dixon introduces his framework dividing VR into recreational play and AR into enterprise context, citing his early venture investment in Oculus. Rubin validates Dixon's Twitter discourse on the topic and expands on HoloLens's shifting enterprise strategy. | |
| VR Gaming Design, Mechanics, and Comfort | 6 | 4 | 1 | 1 | Dixon and Rubin share detailed impressions of VR games like Blaze Rush and Lucky's Tale, analyzing third-person vs first-person comfort dynamics. Rubin details John Carmack's theories on locomotion and snap-turning to prevent nausea, while Dixon offers first-hand player observations. | |
| Film Language, Visual Attention, and Spatial Audio in VR | 7 | 3 | 1 | 1 | Dixon quotes VR developer Paul Bettner on the early cinema analogies before diving into a technical breakdown of 3D spatial audio capture. Dixon explains how dummy ear molds trick human brain perception of sound direction. | |
| Industry Standards, Hardware Spectrum, and Motion Sickness | 8 | 3 | 1 | 4 | Rubin explicitly turns to Dixon to ask for his perspective on industry hardware standards. Dixon delivers a detailed breakdown contrasting maximalist and minimalist VR views, and explains how motion sickness shifted from technical latency to content-driven psychological triggers. | |
| Developer Ecosystem and Hollywood's Expansion into VR | 6 | 4 | 1 | 2 | Dixon shares investor anecdotes about attempting to recruit top talent like Michael Abrash before Facebook's acquisition of Oculus, while analyzing Steam PC gamers as early adopters. Rubin outlines the missing middle tier of game publishing and Hollywood's transition from marketing tie-ins to original VR storytelling. |
Statements from this episode (15)
Rubin: VR beat AR to market because core technical problems were solved
“VR is going to be, well, is first to market already. I mean, with the Samsung Gear VR that came out in December, we have a consumer product for sale. That is a big, that's a big leap, leap to make. And then certainly I think that more of the technical problems…”
Dixon: Low-latency machine vision is the primary bottleneck for augmented reality
“The big bottleneck with AR is to do it well, for most applications, you're going to need very good machine vision. Right. Because you're going to, you don't want, if you have the real world there, you want to have the virtual overlay interact with the real wor…”
Rubin: Magic Leap needs $500 million to build a consumer AR product
“What I understand from people who have experienced Magic Leap, and what they're working on there is, it's going to take half a billion dollars to make this real, to realize this”
Dixon: VR is fundamentally for play, while AR fits enterprise work
“My sort of framework for it is VR will be more about play, because it's a fully, you know, it's a fully invented world, whether, I personally think it'll be less, I think games will be big, but I think it'll be a lot of like what's happening with the Hollywood…”
Dixon: A16z viewed Microsoft as Oculus's top competitor during investment diligence
“Cause when we invested in Oculus, whatever it was a year and a half ago, we did, you know, we were sort of analyzing the competitors and had heard a bunch of rumors about that, but had heard it was a gaming and heard it was very good by the way. Like the best …”
Rubin: Future headsets will converge to support both VR and AR
“And I think that we're probably, and actually we're going to move to this point where one device is going to be able to handle both, whether that's fully contained VR Or switch, you know, on some continuum to an AR overlay.”
Rubin: First-person VR requires drastically slower movement or a fixed chassis
“Well, the game design question, I think that if it's going to be first person, it either has to be slowed drastically to what kind of fast switch games are, or you have to give the person a stable You have to give the player a stable environment like a car cha…”
Rubin: Nintendo historically takes years to adopt landscape-changing gaming technologies
“We've seen for well over a decade now, they take three or four years to move on a technology that's already changing the landscape.”
Dixon: Recording realistic 3D audio requires a dummy head with ear microphones
“So the only way to properly record three D sound is to have basically a head with a bunch of ears. And then as you turn, this is, and as you turn, then the sound turns appropriately. That's the way you trick your brain.”
Dixon: VR motion sickness is now psychological, not caused by technical latency
“So I think we've moved beyond the point where the sickness comes from technical issues. It now comes from the fact that you, your body feels like you're in a different world.”
Rubin: VR motion intensity ratings will evolve to resemble film rating systems
“And that actually maybe is a clue to how we're going to see this evolve. Is there, maybe there's just going to be a scale of probably not one to 10, but I would imagine it's on a G through NC-seventeen type of hierarchy, right? Where only the most battle-harde…”
Dixon: A16z tried to recruit Michael Abrash weeks before Facebook bought Oculus
“We'd like, for example, Michael Abersh, we try, I actually flew up to Seattle a couple of weeks before the Facebook acquisition, cause we were trying to recruit him for so long.”
Rubin: Major publishers will not fund $100 million VR games initially
“So what I don't think we're going to see in the early years are very big. We're not going to see Destiny done for VR. We're not going to see EA buy-in at a hundred million dollar level.”