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The Facebook metaverse had an unexpected consequence: the end of winter in VR companies

Never before has there been so much talk about the metaverse, augmented and virtual reality and the confluence between all of them. In fact, since Zuckeberg announced his intention to create his own virtual world on Facebook in the style of Ready Player One, these three elements seem to be the same. Indistinct. Never before have companies in the sector been so present, hidden since the so-called winter of VR, now they are experiencing a second boom in an unexpected reconversion to what they call the metaverse. And it is that, in just a few weeks, the technological world only has the word metaverse in its mouth. So much so that the MWC 2022 has focused on presenting hundreds of empty proposals that try to get on the fashionable term.

YBVR, with a Spanish brain and an American base, is one of those companies that lived through winter and is now in spring. And they have, according to their vision, a first preview of this virtual universe. They assume that the launch of the Facebook metaverse has been good for them, but they are also aware that there is a long way to go. Like Uttopion, Unity, Decentraland and Sandbox are now the desired targets of investors and customers. The funds are looking again at an ecosystem, which has nothing new but a lot of patient. Also another survivor.

And it is that the successes and falls of this business, that of virtual reality companies, have gone hand in hand with Facebook. More than 6 years ago, the founder of the social network bought a small business, financed through crowdfunding. The Oculus, until then independent virtual reality glasses, became part of the most mainstream technological imaginary. Later they passed into oblivion and, again at the hands of Facebook, they return with force with the promised metaverse. It is precisely the evolution that this small technology had that, now, thanks again to the converted Meta, can breathe easy in an ecosystem that, this time, they say is prepared for what is to come.

This Spanish metaverse was born with IP television

This story begins long before the metaverse came to the fore, also before virtual or augmented reality. Of course, long before social networks were in fashion and were a constant in people's lives, there was IP television.

One of those who now swim in the metaverse was the brainchild of what was known in Spain as ONO. Héctor Prieto, founder of YBVR, was behind the national product. “It was a very fun moment. When it stopped being so much because there were many layers of management, I left,” he explains to Hipertextual.

From the IP wars, came the streaming wars

From there, Héctor went to a technology company that was behind what was normal in those years. They were the ones behind Jazztel TV. Those were the sweet years for the pay television sector. Telefónica started with what is now known as Movistar Plus+. Orange also had his. Until the beginning of the crisis, had considerable success until maintenance costs grew excessively and subscribers dropped. Then came the years of the platforms and the reconversion of the sector in which reunification has been the key. With HBO Max, Netflix or Disney +, the rules of the game have changed. The battle for users is moving in other terms. From IP wars came streaming wars. But that is another story.

The success of the company was so great that Ericsson – the international division – noticed them. So much so that he ended up buying the technology, at a time when exits were not news. In 2010, Hector took the family and moved to Atlanta to work at the company's headquarters.

Zuckerberg was to blame and Oculus more

Already in Atlanta, and after a few years working at Ericsson, the eyes of the world focused on Facebook. Long before his political problems, freedom of expression and consequences of social networks. In a still very naive conception of the world, Facebook was in the news for its purchase in 2014 of the Oculus.

They did not invent anything, but they did encourage a sector that was far from connecting with reality

That first approximation of virtual reality glasses became popular thanks to the founder of Facebook, one who did not even imagine that the metaverse would cross his path. Zuckerberg only lit the fuse for a monster that was yet to come. They did not invent anything, but they did encourage a sector that was far from connecting with reality. Like Héctor Prieto, many in the tech ecosystem have jumped on the virtual reality wave. Spoiler: it goes wrong.

Héctor began to think about the American dream: creating something from scratch. The industry was beginning to move to the rhythm of Facebook. Hundreds of proposals, more or less successful, flourished to take advantage of the pull of the social network. As soon as they went up, they went down.

YBVR, in any case, was a late bloomer in this entire ecosystem.

“We saw a problem in the industry, an immersive video of sufficient quality seemed impressive to us. And when you watch TV, 4K is already perfect, but in glasses it has to be better. But that amount of data is not supported by anyone. What we think is that we only have two eyes, that where you see it is in 8K but what you don't see there is nothing. And we patent it”.

Héctor Prieto, YBVR 5 years later they have two patents. One granted and another in process. In between, a resignation from a secure job (Ericsson) and a new move to Silicon Valley.

And winter came… In just a few years, the millions flowed into the hands of investors. In just one year, more than 6,000 million dollars of investment were reached in VR technology from the United States alone. It was sought, among other issues, to feed the new smartphone. That pot that had the vocation to be an essential in every home on the planet.

But the industry, which barely dreamed of the metaverse beyond the movies, was beginning to realize something: technology was not yet ready for the invention. The immersive videos had a lot of quality, but it was an awkward process. Few lasted more than a few minutes with glasses on; many deserved it and others did not understand the concept. For their part, investors ran out of patience with a consumer market that wasn't there yet.

With this, autumn gave way to winter and began the succession of victims numbering in the dozens

With this, autumn gave way to winter and began the succession of victims numbering in the dozens. The Future Lighthouse studio, based in Los Angeles and Madrid, closed in 2018. Vidreo, which sought to be the YouTube of virtual reality, also closed its doors. Altspace VR, with 35,000 users, ended its history in 2017. Others, such as 8i or Jaunt, pivoted to video-related businesses in time. And so, a long list.

It was in this context that YBVR was looking for capital to start being something bigger. Silicon Valley was the perfect place to find it, except that the funds were no longer giving money for VR-related projects. The bubble had burst and there was no news that it was going to change in a short space of time.

“The funds told us to go see them when we made money and then we saw that it was going to be difficult for us. We had a very hard winter”

With an office in Madrid and another in California, YBVR was left alone with the one in Madrid. It also had to reconvert and reinvent virtual reality in some way. If the glasses did not work, something similar would on the mobile or computer. After all, everyone had that at hand.

Pivoting with Covid in the middle

YBVR found new ways to get out of that winter. In fact, before Zuckerberg's metaverse got them out of trouble, the coronavirus pandemic already provided a reprieve.

Through the mobiles themselves, and focused on massive sporting events, they found their way. The service is provided for matches such as tennis, football or basketball, in which those attending the event could use their mobile or tablet as a screen at will within the meeting. Connecting with YBVR's own cameras or even television cameras. During the pandemic, the need to bring the outdoors closer to lockdowns was a blow to the company and a good resource for organizations that took the VR company as the best partner for a very complex moment.

With this YBVR managed to be in the Australia Open, the one that Novak Djokovic could not enjoy. It also has agreements with Real Madrid – it is not entirely clear whether to include the service in the team's new stadium. “We are working with them, but we can't say much,” says Prieto. And we don't know if the metaverse will have something to do with it or not.

Now yes, the metaverse for VR Now, and with the arrival of 5G and new lines of investment by Telefónica and Lanzadera, YBVR opens a new chapter. One that has a metaverse on the cover. They can't go too far either, but, together with Telus in a project focused directly on users –until now their vision was that of a company–, they plan to make the leap to world created by Facebook. Only that of Facebook? Far from it, although it is true that the model initiated by Zuckerberg is the one that involves the greatest technological burden and the most hardware to expand the experience.

There is a hype like virtual reality, but the industry is much more prepared

Before all this debate, a question remains in the air. In this reconversion, forced by circumstances, of the old virtual reality companies, the question of the metaverse seems to have taken on great importance. But does the metaverse exist for YBVR? They are sincere, and they should be considering their background: “ There is a hype like that of virtual reality, but the industry is much more prepared and Covid has accelerated the need.”

And you just have to analyze the increase in investments and interest by the big funds, also of those that are entering the segment of buying land in the metaverse – where yes aims to create a next bubble–. But unlike what happened a few years ago, there is now technology and business models ready to succeed. Once the barriers and definitions are resolved, the road is ready. “These are the first steps of the metaverse.”