Virtual reality isn’t popping yet: That’s why I’m getting in now

For all the talk we’ve engaged in regarding weed and blockchain and resources and biotech over the last few years, and all the money that’s been made on same, in the back reaches of the Equity.Guru megabrain there’s always been this nagging, mosquito-like buzz in the background regarding virtual reality/augmented reality/mixed reality (yes that’s a really long name – it’s the LGBTQ of tech types).

I remember the first ‘virtual reality arcades’ emerging when I was a kid, and every decade or so someone would roll out the virtual reality term and claim it was right around the corner.

It hasn’t been time, so far. That is, it hasn’t been time – yet.

I believe we’re finally nearing the time when VR and its various spin-offs can and will be finally monetized. We’re here, you just can’t see it yet.

This is why I’m jazzed on VAM/R (my phrase, and I’m sticking with it).

THE PIONEER:

When Pokémon Go came out, 50 million people in a weekend downloaded the app and went walking in parks and towns looking for augmented reality pocket monsters. My kids dragged me 32kms in two days, and it would have been more if my batteries hadn’t run out so often. To that end, I bought several high end packs and battery chargers and Best Buy sales went up that quarter in a big way, in a way they haven’t for years. Nintendo (NTDOY.OTC) stock jumped $10 billion overnight, though it owned next to no part of the game.

Eventually that craze, to get outside with your tech and meet people in the street sharing a similar interest, petered out as the makers of the game tweaked it to a standstill and other developers realized the size of the challenge in getting a comparable game out to market.

But for a hot moment there, kids were outside, playing their games in the real world.

THE AH-HA MOMENT:

Cantech Letter Tech Conference in Toronto last month. 90% of the companies there were blockchain companies. Cambridge House, which was putting on the show, basically gave away a corner of the event to virtual reality companies for next to free (or maybe even free), because they’re looking for what’s next.

That corner was a ghost town until I got the Cambridge bossman and a Canaccord broker to try the Ydreams (YD.V) ‘Arkave’ multi player VR arcade. They came out with crazy smiles and started group texting people to get to the booth and try it. When the conference floor was closed down for the night, and all the other booths had been long emptied, Ydreams still had a LONG queue to try their product.

In-game multiplayer changes everything. It brings teamwork and positional awareness and social applications. Canaccord duly raised $2m for Ydreams (one of the few public VR companies) in a few days to help get it to market. The stock has climbed 50% since.

WHAT’S NEXT?

I just sat down with Tarnie Williams, who is royalty in the Vancouver (and thus global) video game production space. His dad, Tarnie Williams Sr, was one of the guys who built the industry back when EA was putting out Amiga games. The junior Tarnie has built a reputation of his own as an A-List game producer, a builder of studios, and a good guy – all things that are tough to achieve over any sort of length of time in that industry. He’s now heading up Blueprint Reality, a private deal in Vancouver that is working on tech called MixCast that will film you while you’re in VR and then place you in the space, so you can see yourself rather than a faceless avatar.

Imagine that tech combined with the Ydreams tech.. That’s when you’ll be able to play Halo with your friends, or against your friends, in real time, in a VR space.

HITTING THE STREETS:

But VR won’t become massive until it’s not just for a VR space. You need it to be something that works everywhere. In arcades is not where the tech will stand up for the 99%. Others are working on tools that will allow your phone, or your Hololens, to read the room around you, re-skin the furniture and walls and floors and people with video game workin’s, and allow you to take what made that Pokemon game so fun (mixed reality, where you’re using the world around you in combination with virtual characters) to a place where you could do in your living room, or in the street, what you currently can only do in an arcade or with a $700 headset.

This demo video puts it into context.

At Equity.Guru, we’ve been doing with VR/AR what we did with blockchain a year ago – digging in deep, so we know who’s real and who isn’t, and can get a sense of what’s a good investment in the space before it becomes a gormless wave of financing and me-toos.

We like Ydreams a lot. Not a client, but way undervalued and, we think, likely to go hard in future.

We also like Blueprint Reality a lot. In fact, they’re doing a private raise right now for accredited investors.

I’m gonna let their financing guy, Todd Buchanan, take it from here, but you’ll want to see their investor deck. If you have any sort of technical understand of how technology companies scale, you’ll be amazed at the level of detail, realism, and knowledge put into their document:

  • 7 Patents filed on MixCast VR tools, more coming in the next few months
  • Unity six figure master services agreement signed and first work order delivered in June, 2017 with follow on work in progress
  • Intel six figure master services agreement signed for MixCast with follow on work in progress
  • Microsoft (provided their hardware free) and Google both in discussions about MixCast
  • Over 190 subscribers to MixCast
  • Over 880 downloads of the game Awaken with strong positive reviews

The key points of the offering are:

  • Eligible business corporation (EBC) for BC residents = may be eligible for a 30% tax credit in year of investment
  • TFSA and RRSP qualified
  • Common voting shares at $0.15 per share plus options warrants.

Personally, I love that they’re already generating revenue from large tech companies, I dig that they have patents filed, that they have existing content and subscribers, and that the warrants come in at the same price as the shares.

Buchanan says those interested in learning more will be required to sign an NDA before they can receive confidential business, financial and offering information. But you can at least see the one-pager 1. Blueprint Reality-Investor Overview (171102)
.

They’re looking for a minimum investment of $25k from accredited folks but if you’re a smaller investor, and have a broker who can walk you through it, they’ll take as little as $5k through their2. Blueprint_Reality_OM_Nov 20, 2017+amendment
offering memorandum.

Light up his phone, bitches. 604-671-8324

If private financings aren’t your jam, we like Ydreams as a good undervalued entry point. Imagination Park (IP.C) is still out there, throwing out news releases about movies their execs are producing and dropping VR hints here and there, but we’re not feeling it.

— Chris Parry

FULL DISCLOSURE: None of the companies listed above are Equity.Guru marketing clients, and we don’t get any finders fee for showing investors their financing. We may take part in that financing ourselves. Equity.Guru believes investors should be familiar with private placement financings as a means of accessing early stage deals that have a higher upside, but investing in any financing is something you should do after discussing it with a financial advisor, your significant other, and your god.

 

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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