Vancouver is a VR and AR Hub of the Future

In the global technology race, successful cities are constantly searching for fresh ways to innovate and grow new startups. One of the emerging hot spots is the field of virtual and augmented reality, where the city of Vancouver is aiming to position itself as the up-and-coming global hub.

VR and AR in a Nutshell

Virtual reality (VR) puts the user inside a fully computer-generated world, usually through a headset that blocks out the room around them. Augmented reality (AR) does the opposite: it lays digital images over the real world, through a phone camera or a see-through headset. Mixed reality (MR) sits between the two, letting digital objects interact with real surroundings.

All three draw on the same skills: real-time 3D graphics, game engines, visual effects, and careful design so people don’t feel sick or lost. That’s why cities with strong games and film industries had a head start when headsets started reaching consumers.

Here are three advantages that could turn Vancouver’s dreams of becoming a virtual juggernaut into reality:

Talent

With a stable of legendary video game studios and top mobile game developers, Vancouver has built a solid reputation as a center for digital creativity. But its film production and VFX communities also set Vancouver apart: local film studios have created many of the jaw-dropping set-pieces in recent Hollywood blockbusters, with some receiving Academy Award nominations for their work. Given the intersections of film in VR and AR, the outstanding talent pipeline that has made these entertainment studios successful is sure to play a huge role in fostering local startups.

Geography

From sea to sky, Vancouver has always enjoyed spectacular scenery. But its prime location is close enough to key innovation hubs like Silicon Valley — and even exploding digital markets like China — give Vancouver a clear advantage as VR startups seek new investors and begin launching in foreign markets. Its status as North America’s “gateway” to Asia has also attracted a diverse student population drawn to local universities and colleges seen as leaders in developing digital talent.

Ecosystem Support

Governments are now realizing the region’s VR and AR potential. The province of British Columbia announced new tax credits at the BC Tech Summit for companies that are making VR and AR entertainment. Local VR and AR talent is also teaming up to launch a center of excellence to collaborate and help startups scale more quickly.

The tax measure was a change to B.C.’s existing Interactive Digital Media Tax Credit. At the March 2017 summit, the province said it planned to expand the credit’s eligibility to include AR and VR products for entertainment, subject to the legislature’s approval. The credit pays back a share of the wages companies spend on eligible staff, which matters a lot for studios whose main cost is people.

With this depth of talent, along with an attitude of camaraderie and support in the local ecosystem, Vancouver is a sure bet to be a veritable hub of cutting-edge virtual reality entertainment.

What Happened Next

The community hub arrived later that year. On October 12, 2017, the BC Tech Association opened the BC Tech Cube, which it called Canada’s first virtual, augmented and mixed reality hub. The 6,000-square-foot space in Vancouver’s Railtown district was set up to support early-stage entrepreneurs and corporate teams working in AR, VR and MR, with mentorship, workshops, events and access to investors. At the opening, the association said 3D development in the city had already resulted in 17,000 jobs and $2.3 billion in revenue.

“By providing entrepreneurs with the tools, support and environment, we’ll be able to supercharge the growth of BC’s burgeoning AR/VR/MR sector,” Bill Tam, CEO of the BC Tech Association, said at the opening.

The tax support also stuck, and widened. The province’s current guidance on the Interactive Digital Media Tax Credit says AR and VR products can qualify if they meet the general requirements for interactive digital media, and its examples include business tools, not just entertainment. The rate also went up: the credit is 25% of eligible salary and wages incurred after August 31, 2025, compared with 17.5% before that.

What It Means for Startups

VR and AR have moved more slowly than the most excited forecasts in 2017 suggested, and headsets are still far from as common as phones. But the bet Vancouver made wasn’t on a single device. It was on a pool of people who can build convincing 3D experiences, which is useful whether the end product is a game, a training simulator or a design tool.

For founders, that’s the practical lesson. Build where the talent already is, use the support programs on offer, and design products that make sense across several kinds of hardware, so your company isn’t tied to the fate of any one headset.