
Mixed reality outfit Magic Leap nets $793.5M - Impossible
http://gamasutra.com/view/news/264972/Mixed_reality_outfit_Magic_Leap_nets_7935_million.php
======
rdl
I hope to be wrong, but secrecy like this usually doesn't bode well. Best
case, I'm expecting something like Segway or Apple Watch -- overhyped from
secrecy, but legitimate, but not all that amazing. Middle case is something
like Theranos; not overt fraud from the beginning, but the result of a lot of
pivots and coverup. But most often it is outright bad.

Short term practical or tactical secrecy, sure. And in some industries,
probably not as bad a signal. But software-heavy hardware ecosystems aren't
one of those.

Outside of wars, Ultra or Manhattan just aren't that good a way to work. Why
cut yourself off from the global community?

~~~
josh2600
I was, at one time very recently, very deep in the VR/AR space. It seems to me
that there will be quite a bit of time before people accept projectors pointed
at their eyeballs (or however you want to explain Magic Leap's "digital light
field" technology).

$800M on $4.33B post- is a big chunk of a company, particularly one that does
not have a working product demo yet. Maybe it'll all shake out positively, but
I am of the opinion that this is not real.

Lastly, all of Magic Leap's demos are very clearly not using wearable hardware
(and also not being demonstrated using any kind of light-accurate
reproduction). For example, metallic effects usually require "black" as a
shade and things like the Lumus Optical lenses cannot reproduce such an effect
(despite being basically the cutting edge of lightfield reproduction).

In short, I am bearish on Magic Leap.

Also, I am super confused as to why Magic Leap is operating their own silicon
fab... That seems crazy to me.

Edit: Fixed the $'s from VC-land.

~~~
Udik
There is some kind of irony in the fact that an augmented reality company
seems so successful in presenting investors with an image that nobody else can
see.

> Maybe it'll all shake out positively, but I am of the opinion that this is
> not real.

But after all, isn't that the whole point of it? :) I wonder what kind of
stuff they managed to project in the eyeballs of the VCs.

~~~
josh2600
Cups of coffee...

~~~
josh2600
I see a bunch of negative votes so I'll expand as I was not trying to be
facetious or sarcastic.

The first magic leap demo I ever heard of (and, because I'm not under an NDA
with them this is all hearsay) was a cup of coffee on a table. Put $WEARABLE
on, now there are two cups. Which is real?

I can easily imagine that, were this convincing visually, VCs would surrender
their wallets with aplomb.

~~~
christiangenco
It'd be fantastic if it turned out that the Magic Leap demos were all just
magic tricks set up to make it seem like it was really advanced VR technology.

Ex: in this case, when you put the glasses on there's a moment of not being
able to see anything, and they just put another real coffee cup on the table.

------
liquidise
This blows my mind. Not because of the amounts raised without a single
released product: investors have shown a propensity to throw spectacular
amounts of money at baffling ventures.

Instead, my shock is the implied burn rate of these raises. LinkedIn reports
Magic Leap is between 201-500 employees. They are no indications of them mass-
producing a product. No sales, and their marketing seems to be exclusively
articles about the enormity of their rounds.

How, then, is a company raising 790M 1.5 years after raising 500M? What
possible expenditures, without mass product development, sales and marketing,
consumes finances at a rate that warrants these raises?

Or, alternatively, maybe the founders and employees simply despise maintaining
ownership of their company.

~~~
rsp1984
I've asked myself the same thing. I think burn rate alone can't explain it,
unless they are paying their employees way, _way_ over market rate.

Probably what they are planning to do with the money is a couple of
acquisitions. I'd not be surprised.

------
benlower
TechCrunch had a piece on this today ([http://techcrunch.com/2016/02/02/ar-
startup-magic-leap-raise...](http://techcrunch.com/2016/02/02/ar-startup-
magic-leap-raises-793-5m-series-c-at-4-5b-valuation-led-by-
alibaba/#.g65xml:lJY1))

I find it interesting that the top image (of the floating robot) has the text
saying "no special effects" whereas the gif of the elephant in the hands (been
available online for awhile) does not. This tells me that all the videos/gifs
we've seen (the elephant, the whale splashing down thru the gym floor) are
"aspirational" (AKA "bullshit").

Don't get me wrong, the floating robot is cool but this is doable on HoloLens
(yet to ship but coming in Q1). Definitely seems like there's a real risk here
of overhyping MagicLeap.

EDIT: Fixed the link to TechCrunch...If you saw the other link we're hiring :)

~~~
josh2600
The floating robot is not doable on the hololens because metallic effects
require black, which is not reproducible on the hololens display... Yes, I
have seen the photos of hololens output that show black. I don't believe
that's a reproducible effect on their wearable.

~~~
benlower
true about black so colors might look different.

~~~
RangerScience
You have no idea. You also have to consider the colors of real things behind
your fake things.

~~~
benlower
one of your sentences is actually true.

~~~
josh2600
If you don't have black you can't achieve metallic effects... If you disagree,
please explain how it is possible to achieve said effect without black.

As far as I know, and I was pretty deep into this at one point, metallic
requires black and without it you cannot achieve any sort of luster-like
effects.

~~~
josephpmay
Could you provide a source for that? (not doubting you, just curious)

~~~
josh2600
[http://blogs.valvesoftware.com/abrash/why-you-wont-see-
hard-...](http://blogs.valvesoftware.com/abrash/why-you-wont-see-hard-ar-
anytime-soon/)

See the section labeled "See-through AR == additive blending only".

~~~
josephpmay
I meant your claim that "metallic requires black." I'm well aware that AR is
only additive.

------
aresant
In the founder's own words:

[http://www.magicleap.com/#/blog/atoms-not-
included](http://www.magicleap.com/#/blog/atoms-not-included)

------
untog
Someone else in this thread mentioned Theranos and while the two businesses
are wildly different, I still think there's something to it: investors can be
fooled by flashy presentations.

I'm going to continue to be suspicious of Magic Leap until I actually see
something that delivers on the promises they are making. Luckily(!) for me, I
don't have enough spare money to be an investor in these things anyway...

------
WhatIsDukkha
I'm still not seeing the usefulness of AR in the near term.(Disclosure: I
think VR is here and ready with lots of useful possibilities).

I see AR being useful in verticals ie "pipe fitter" or "nurse".

As a general tool for everyone what is the problem solved?

"It's like an iWatch but in your vision all the time"

"you can enhance X with digital information"

"you can play games that somehow make sense in your ambient environment?"

I have not heard very many use cases that don't just sound like visual clutter
for little benefit.

Balance that against what is likely to be more then putting on a pair of
Raybans ie the battery pack and display bits.

What's the not-awkward input method that's even plausible? edit: Gestures have
some serious downsides.

~~~
monk_e_boy

        > I see AR being useful in verticals ie "pipe fitter" or "nurse".
    

I do think IT folks forget just how many nurses, doctors, pipe fitters, car
mechanics, telephone engineers, etc etc etc are out there. Literally millions.

Hook these glasses up with google maps and other online databases will be
neat.

~~~
mattmanser
I know someone who worked on a heads up display for paramedics. People have
been trying to make these for a few years.

Just think how complicated it actually is for a nurse:

\- it's got to supply actually useful information that isn't fairly trivial to
get by picking up a chart

\- it'll have to hook up with some sort of input device

\- are they carrying around the AR device and the input device at all times?

\- it's got to be wearable for 8 hours or it's completely pointless (you can't
use it half the time if it's essential)

\- it's got to be light and durable

\- for almost every hospital it'll have to have specialized software written
to integrate

\- an amazing UI to use it without touching anything as they can't keep
cleaning their hands to use it

\- there's got to be total network coverage in every hospital room, it can't
cut out in wi-fi deadspots (I have no idea how good this usually is)

And those are the easy problems I can think of without any particular domain
experience. I imagine it will get a lot more complicated when you know what
they actually do.

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TheMagicHorsey
To me Magic Leap is an interesting test of the investment people at Google and
Ali Baba. I'm giving them the benefit of the doubt, but if Magic Leap is a
spectacular failure, I think it will be a strong signal that Google and Ali
Baba's investment groups are similar to the groups at other big tech
companies. i.e. full of strong political players without much industry acumen.

I'm particularly biased though. I've always been a bit skeptical of the amount
of money corporate development people make ... I feel like they don't bring
that much value to the table as individuals, even when the corporate
development function is essential.

When you meet a good engineer, lawyer, or salesperson, you can usually pretty
quickly understand what they are bringing to the table. With investment people
I feel like they just make decisions, and then they aren't often measured
against what the results of those decisions are.

The people that should probably actually be corporate development people ...
the ones that are unsure of themselves without sufficient data. The ones that
listen quietly and form measured opinions. Those awkward types ... the ones
with valuable insight ... I never see that type coming to visit our offices as
part of the steady stream of investors.

All I see are well put-together people, with good personalities, strong
handshakes, excellently tailored clothes, good presentation skills ... and a
fair understanding of the industry ... plus maybe slightly above average
intelligence. They are usually warm and personable though. Its clear they have
that skill.

I have no idea why the CEOs select these people for the job though. Any one of
our engineers if tasked to evaluate companies like ours, would ask better
questions, would be more intelligent about figuring out what is our marketing
fluff, and what is actually ready to go.

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seibelj
Has anyone tried out this technology? What is it like? It's just so hard for
me to imagine investing so many billions before any product is released

~~~
moron4hire
If they have, they won't be commenting here. MagicLeap locks everyone up with
an NDA.

~~~
semerda
Is this another Theranos? I hope not but all we are hearing are promises, NDAs
and big rounds/valuations for a product not yet on the market. One kinda grows
suspicious after so many howls.

------
shady_trails
I am happy to see they pulled this magnitude of investment. Curious why? There
are exactly two possibilities:

1\. The product is developed and released in a few years, its amazing, and
everyone is happy.

2\. It sucks, investors lose their money.

#1 is a win for me, #2 is a who cares.

~~~
S4M
> #2 is a who cares.

It's a very shortsighted reasoning. If this turns out to be a completely lost
investment, investors will become wary of investing in VR startups, which will
have for consequences less R&D jobs in virtual reality (which itself will
decrease negotiating leverage of all R&D engineers), and less VR products,
sold at a more expensive price.

I don't know anybody who works at Magic Leap, but I'd rather prefer they don't
waste all that money.

------
femto113
This can't possibly just be a hardware play. This investment would buy 1.3
million Oculus Rifts at retail price. At component prices and figuring
economies of scale lets say it could fund the construction of perhaps 5
million units. Are there really 5 million people waiting to buy an AR device?
Google Glass sold perhaps 50,000 units--has the market somehow grown by a
factor of 100x in the past couple of years? I just don't see enough people
wanting to own this tech. Not now, not even in 10 years.

The more likely possibility in my mind is media (this becomes the thing that
replaces 3D movies or 3D TV) where they collect a royalty on everyones
content, or perhaps theme parks (they are in Florida after all). A Hogwarts
where you could actually see the spells you cast, or an Imagineered experience
where you could walk through Mary Poppins' animated countryside might be
capable of generating enough revenue to justify this.

~~~
NegatioN
I agree with much of what you're saying. However I'm not sure your comparison
with Google Glass is fitting. The market for a functional Google Glass might
also have been a lot bigger than 50 000. Not a lot of people outside the tech-
environment knew a whole lot about it, and there weren't really an eco-system
around it since it was never a consumer-grade product.

So I think the market is bigger than previous numbers indicate, however I'm
not sure how close to perfection it would need to be to show it's true colors.
Hopefully the launch of Oculus and Vive might give us an indicator this year.

(As an anecdote,) personally I would want something like this if it actually
had enough content to let me reuse the product without indefinitelly replaying
tech-demos. :)

------
AndrewKemendo
Interesting comment thread from r/oculus about this announcement:

[https://www.reddit.com/r/oculus/comments/43tehp/magic_leap_r...](https://www.reddit.com/r/oculus/comments/43tehp/magic_leap_raises_794_million_and_announces_mixed/)

------
melted
This truly must be the second coming of Jesus Christ. Billions of dollars in
investment and nothing to publicly show for it yet.

------
randomgyatwork
Maybe they are building something like those in eye projectors that were
featured in a couple of episodes of Black Mirror.

~~~
josephpmay
Their form factor is a headset/glasses of some sort

~~~
rasz_pl
No, last time they did a real (aka not a fake PR YT clip) demo their form
factor was a giant table with a Phoropter like strap on producing low res
single color image.

~~~
josephpmay
I meant as a consumer product, not as a current prototype.

------
tim333
For those wondering what the tech does here's their demo video

[https://www.youtube.com/watch?v=kw0-JRa9n94](https://www.youtube.com/watch?v=kw0-JRa9n94)

(the demo with the robot and solar system)

quite cool but I'm not sure how that converts in to a product people buy

------
ogreveins
It's going to work but it's not going to work amazingly so, probably just
suffering from a low FOV. With that said, there's too much money and too many
people being hired for this to fail incredibly hard; it just wouldn't make
sense.

------
walkingolof
Is there anything stopping these guys from covering the whole view field ?

I've tried a number of VR headsets and they all feel like a stopgap solution,
there has to be something better than wearing 2 x 4" screens mounted in a cone
on your head....

~~~
nilkn
This is AR, not VR, right? The two are quite different. VR does not aspire to
be AR. It seeks to completely replace the world around you, not just add onto
it.

From what I understand, upcoming VR headsets like the Rift and Vive have
pretty solid FOVs, but Microsoft's HoloLens AR headset has a significantly
more limited FOV.

~~~
RangerScience
_Microsoft_ does. ;) AFAIK that's because they're trying to keep the price-
point low, since they're aiming for consumers.

Edit: AFAIK, the tech they're using can support a wider FOV, but then the
price jumps pretty quickly. I definitely do NOT know for sure, however; that's
just what we figured when they were first announcing.

~~~
josephpmay
Microsoft could slightly enlarge the Hololens FOV for a significant increase
in cost, but it still wouldn't be good. They would have to change the display
technology they use to have something immersive.

------
koolba
Is there any more info or examples (demo, video, etc) of Magic Leap available
anywhere?

Every article has the same "mini elephant in hands" picture. I've never seen
anything else.

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late2part
I don't think "nets" means what you think it means.

~~~
codeisawesome
It's actually ironic, most people seem to think:

"getting investment" === "success"

Even my JavaScript runtime knows better.

------
ilaksh
AR plus
[https://en.m.wikipedia.org/wiki/Light_field](https://en.m.wikipedia.org/wiki/Light_field)

------
chaostheory
So far we've only seen MS's AR offering via Hololens.

Has anyone tried the ex-Valve AR system? I think it's called castAR.

~~~
RangerScience
Both Daqri and ODG have had floor demos.

CastAR is pretty neat and damn simple, although you have to prepare the space.
If I had to bet on a _consumer_ AR technology, I'd probably bet on CastAR,
although I haven't checked up on them in awhile.

------
Lapsa
sounds like money laundering

