#1225 – Electric Blizzard of New Tech – Part 1

The new year, 2025 – the Chinese year of the Snake – was going to be a biblical year no matter how anyone cut it. International turmoil, US presidential changes and continued inflationary pressures, alongside great leaps in technological application and the continued impact of AI. And the year began with a mass of trade conventions in the first two months – illustrating how hectic this year will be.

AI Constructed Brief

Investors should take note of the significant trends and developments highlighted at CES 2025, which underscore a transformative year for the tech and amusement sectors amidst ongoing economic challenges. The event showcased industry leaders like NVIDIA, Sony, and Meta pivoting towards Mixed Reality (MR) and enhanced AI applications, reflecting a shift away from traditional Virtual Reality (VR). Notable partnerships, such as DPVR’s collaborations with LAI Games and the unveiling of Sony’s high-end MR system, position these companies for potential growth in the immersive entertainment market. Meanwhile, Meta’s focus on improving its augmented reality offerings and divesting from underperforming VR initiatives indicates a strategic recalibration in pursuit of profitability. Overall, developments in immersive technology, particularly the interplay of VR and MR, alongside new hardware acquisitions—like Google’s strategic purchase from HTC—suggest an evolving landscape ripe with investment opportunities.

Full Stinger Report

The CES Gathering

Breaking into the new year and we see the 58th annual Consumer Electronics Show (CES) 2025, organized by the Consumer technology Association (CTA), held in Las Vegas at the beginning of the new year. The 2.5m-net-square-feet of exhibit space set up throughout the Las Vegas Convention Center and surrounding hotels. Attracting an expected 40,000 attendees comprising based on organizer reports including some 5,000 accredited media and social media influencers. Drawn to see the latest tech trends across some 4,500 exhibitors.

Those leading tech trends that were expected across the show halls included obviously AI, along with “Digital Health” and “Advanced Mobility”. While the terms VR and Metaverse seemed off the lips of many of the tech-gurus. The technology was still being represented, and in many cases depending on commercial entertainment examples. Exhibitor PICO had a subdue presence at the show, in comparison to DPVR who had a booth promoting partnerships and new hardware. Regarding their amusement partnership with LAI Games, the operation had on the booth an actual ‘Virtual Rabbids’ VR ride simulator updated with the new headset configuration – having replaced the previous headset for a new DPVR system.

While another amusement partnership was also front and center on the DPVR booth, alongside LAI with a Raw Thrills ‘Godzilla Kaju Wars VR’ machine getting a lot of love from attendees from the show. Much of the media coverage of CES’25 included at least one shot of players on these amusement machines and we hope that the amusement trade will be promoting this free publicity to drive home the vitality of the sector. Another partner celebrated on the DPVR booth was OVRDRV Games – not with a machine, but in marketing and promotional material regarding the enterprise focus. At the same time DPVR revealed more details of their DPVR P2 VR headset focused also for enterprise application.

Speaking of the VR developer – further to our IAAPA 2024 coverage, and we were able to speak directly to OVRDRV Games for confirmation of what we reported. The company confirmed that the VR 360 ACTION operation had been acquired by Shia Grunzweig – who is now the CEO of the relaunched OVRDRV. The company is focused on IP-based amusement games and had licensed from ATARI the ‘RollerCoaster Tycoon’ property to put in their VR ride sim. It was made clear that this is a different system compared to the previous ‘OMG’ platform. Also, a correction on the name of their VR shooter, which is ‘NEON OVERDRIVE’. We hope to learn more of new developments from the company at the coming Amusement Expo in March.

Speaking of amusement on the CES’25 show floor and Oculeap (Yinghua Technology), presented their ‘Zombie Frenzy’ platform. The VR helmet integrated gun system (an approach the Stinger describes as an “integrated VR gun visor system”). The game was put through its paces on the show floor by many attendees. Amusement applications of VR seemed to be getting a lot of the love on the show floor. And the Chinese developer Oculeap – who we reported during their IAAPA’24 attendance has been increasing their presence. We have mention of their hardware at another event following shortly.

Amusement was also making a special presence felt during CES’25 with exhibitors such as Sweet Robo – the company presenting their range of robot vending systems. The booth crowded with visitors, especially drawn to the ‘Cotton Candy Robot’ vendortainment system and interest in their ‘Robo Ice Cream’ and ‘Balloon Bot’ machines. The popularity of these systems with visitors, illustrating the deployment of new vending systems into the market. While STERN Pinball also chose to promote their new pintable during the CES event (‘Dungeons & Dragons’) – the prosumer market as big as the commercial for them at this show.

One of the big Keynote presentations was from NVIDIA and along with the big push towards Physical AI (applied in robots), as well as their latest graphical processing – SEGA revealed a pre-development concept video trailed of a new ‘Virtual Fighter’ game in development. The video showed dynamic movement and a highly detailed background and character design, and while reported to be not actual game play – but pre-development in-engine footage. While SEGA has been rumored to be working on a new VF title, little is known about its release schedule, this latest footage a tantalizing glimpse at what the company is working towards. Obviously, we have no information if this new VF title will grace the amusement space – we will have to wait and see.

Returning to the key CES’25 trends – and Mixed Reality (MR) seemed to have usurped the throne from VR, along with many corporations favoring the term XR over MR or VR. The smartphone manufacturer Vivo, and one of the largest, revealed they were launching a MR based headset. One of the big developments in the XR scene – as VR has pivoted to being defined as – was the December 2024 announcement that Samsung would be re-entering the immersive tech scene with their ‘Android XR’. A full ecosystem of hardware and OS that would be developed in partnership with Google and Qualcomm. This marks a major move by Samsung since they discontinued their Oculus partnership developed GearVR headset in 2018. Now with Google, the company looks towards rolling out a dedicated MR headset sitting in the middle ground between the discontinued Meta Quest Pro and Apple Vision Pro development.

Though not shown officially at CES’25 – there was a buzz surrounding the new entry, especially as the hardware was being focused on an Enterprise facing approach to the business, with consumer being seen as an also run element. Developers were even wooed by Google to support the platform and its infrastructure as a XR standard. Even addressing concerns of the longevity of Google support in the face of other failed short-lived VR platforms like ‘Daydream’ (2016-2018). Google would make a statement confirming they were fully committed to this release and were making substantial investment in its support.

An example of Google’s investment into XR was illustrated in shaking up the PC VR market, revealed a few days after CES’25. Continuing the M&A climate of the tech market – it was announced that Google had paid some $250m to acquire part of the XR engineering group from HTC VIVE. This development team has been instrumental in defining the VIVE platform into the commercial sector and will now apply these skills towards establishing the roll out of the hardware and firmware for the ‘Android XR’ platform. Engineers being transferred to Google as well as access to non-exclusive IP from the HTC VR division – Google also confirmed they would be exploring additional collaborations. At this early stage of the agreement there was no word on how the transplanting of the engineering resource would impact the HTC Focus 3 investment into commercial and entertainment sector. Some sources had revealed moves by some LBE VR developers to become more agnostic in their headset approach following a slowdown in support. We expect to know more of this impact soon.

Also happening at the same time as CES’25, Sony revealed their intention to release a consumer MR platform – to be developed by a division of Sony Interactive Entertainment (who developed the Sony Playstation VR series) – the new MR system will be branded the ‘Sony XYN’. A website was launched for the announcement seeing the hardware supported by the Sony ‘Mocopi’ body tracking platform. The system focused on Spatial Capture Solutions – under the tagline “Next Dimension of Creativity”.

The news was announced to coincide with CES’25 – and this also followed the previous reveal of the Sony commercial (B2B) XR headset. Examples of which were presented on the Sony booth as references towards what can be expected from the coming Sony XYN headset (sharing much of the same formfactor). Our friends at The Ghost Howls blog had a chance to put the commercial “sister” system through its paces and drew some interesting observations. The Enterprise only XYN will be sold for $4,800, an eyewatering amount even for commercial application.

Also presented by Sony at CES’2025 was a purpose-built “Proof-of-Concept” attraction to wow the crowds – with a room-size wall-to-wall LED screens, an experience for players using tracked flashlight-mounted shotguns, supported by fx such as olfactory and haptics. In an attraction based on ‘The Last of Us’ Playstation game IP. What some called a “Future Immersive Entertainment Concept” – with a trailer showing an imagining of a theme park environment akin to Super Nintendo World – promoting “Playststation Theme Park” IP based attractions. No word if this is part of a bigger strategy, if this purpose-built attraction will be deployed into the ‘Wonderverse’ venue or was more a proof-of-concept. IP was a big part of Sony’s CES presence, with film adaptations revealed for their properties.

Sony also presented for the first time at the show the ‘CES Creator Space’ – an area of the show floor dedicated for content creators and story tellers to gather. Speaking of the Sony Playstation VR venture, and one of the leading executives responsible for the establishment of the PSVR series announced his departure from the corporation. In a statement on his departure from the corporation and project he stated he was “sorry” for being “wrong” about PS VR2, though described his work on the original headset as “the most fun I had”. Having worked at the company for 30-years his retirement was well earned, though this statement was the first admittance that the PSVR2 has performed badly in sales beyond rumors.

CES 2025 saw a direct presence from Meta, and their AR and VR brands – with a special booth – though it was clear to see promotion of their Ray Ban AR platform was more front and center, and the term VR seemed mooted – in comparison to the MR narrative. December saw the official discontinuance of the Meta Quest Pro – the corporations productivity MR platform after a 24-month run. Attempts by the corporation to spin the initial reaction to their expensive platform could not deflect the poor reception.

Meta Quest VR headset Amazon Black Friday sales were down 16-percent, on last year. The indication one of the few metrics available of the actual sales of Meta VR hardware during the holidays that is not a vested interest. And would seem to indicate that the heavily subsidised Meta Quest 3S did not generate the sales boost, previously expected. Meta received a blackeye over the holiday as many newly purchased Quest VR headsets were “bricked” (made inoperable by a software update). This would later be blamed on out-of-date software, with Meta rushing to offer replacements – but begged questions of how hard the recent layoffs had hit the QA teams.

This news came as it was also revealed that Meta intended a new round of layoffs, looking to lay off 5-percent of their overall workforce. This is the third round of sacking from the operation. In an interview with a famous podcaster, the Meta CEO and founder stated he wanted to “move out low performers” from the workforce. The company reverting to a performance-based culture within the various operations. This came as news hit those losses in the Meta Reality Labs operation had reached a staggering $5b for their reporting year – spending on R&D and promotion for VR, MR and AR projects. Placed into perspective, Meta has spent on their Reality Labs division some $69b since 2020.  In a leaked memo reported by Business Insider and Road To VR, it was revealed that Meta‘s CTO told staff that 2025 will determine whether it’s hardware & metaverse division is “the work of visionaries or a legendary misadventure”.

Also commented in the memo “need to drive sales, retention, and engagement across the board but especially in MR”. Underscoring the move by the operation to focus on MR away from their previous VR initiative. This came as the same CTO apologies to customers for removing of the ‘Scoreboarding’ app that allowed Quest users to track their achievements on games – this removal took place in December and saw an outcry across the VR space. It was also revealed while Meta’s VP of XR will be leaving the Reality Labs operation and Meta in March – a position he had held for four years. Many observers sensed an air of change regarding Meta’s VR aspirations, and that MR and AR were the clear new focus – but also that the Reality Labs operations seemed under pressure to perform as had been expected at this juncture.

A need to offer a positive spin on the situation ahead of earning reports, saw Meta confirm rumors that they had sold 1m of their ‘Meta Ray-Ban’ smart glass systems. With the company CEO and founder going on to state they expected to sell between 5 and 10m units in 2025. This is the most recent occasion that Meta has drawn a line in the sand to quantify a means to gauge their success. The chief executive seeming to feel confident in sales success with their AR platform over what was achieved with their VR platforms. Doubling down on this, the same executive stated that 2025 will be a pivotal year for the Metaverse – a make-or-break attitude to this tech gamble.

Questions about the disclosing of actual VR content sales throw many of Meta’s numbers into question when it was revealed that VR game developers had questioned the discoverability of sales. Meta shot back with an online statement doubling down that people were spending longer in VR games and apps on their system – and the corporation was seeing significant growth of in-app purchases. Though definitive numbers were thin on the ground.

One of Meta’s partners in VR was demonstrating at CES’25 their unique rotational haptic seat system. Roto VR presented what they called their “Rotoverse” the only way to play seated VR employing their unique head tracking technology married to the VR headset. Seen as a much more comfortable way to play VR, and compelling for flight and racing experiences. The company hinted at commercial entertainment applications of the Roto VR platform being in the works. Speaking of partners, Meta has focused on it hope to create an Operating System that will be licensed to developers in VR to support their platform – like the approach that Android achieved in the smartphone scene. It was revealed that the first VR hardware developer that will employ Meta Horizon OS will be ASUS – the company working on a new headset to be called the ‘ASUS ROG VR’.