Why Metro Vancouver has become a world leader in virtual and augmented reality

    1 of 8 2 of 8

      As resident genius, gadgeteer, and early leader of superhero collective the Avengers, Tony Stark—or Iron Man, to his adversaries—is one of Marvel’s most powerful creations. Portrayed by Robert Downey Jr. in several big-budget Hollywood adaptations, the character has a rough-around-the-edges charm that pushes his team to conquer everything from nomadic warlords to open wormholes.

      Despite Downey’s effortless charisma, though, it’s not Stark who captures audiences. It’s his suit.

      The key to his armour is the helmet. The full-head protector allows Stark to look at his surroundings while it projects important information into his field of vision. Digital graphics let him view his suit’s condition, aim weapons, operate radar, and place himself on a map, all while transparently seeing the real-world around him.

      To those acquainted with the rise of virtual and augmented reality—VR and AR—it’s a familiar idea. Stark’s headgear is a sophisticated augmented reality headset.

      According to Bill Tam—former president of the B.C. Tech Association, a nonprofit that promotes the interests of the technology industry to provincial lawmakers—Iron Man’s visor, or at least glasses like it, will become commonplace in years to come.

      “I’ve always been a big fan of Tony Stark, just in terms of the way that Marvel portrays how he manipulates information as Iron Man,” he tells the Straight with a laugh, on the line from his Vancouver office. “It seems very futuristic, but we’re already getting there. Augmented reality in particular, for me, is a powerful tool, because you don’t lose perspective on what’s going on in the world. Ultimately, we should be able to see information hanging in space, not just on two-dimensional screens. What excites me about it is how fast it’s developing.”

      Robert Downy Jr. as Iron Man, wearing his AR helmet

      Even three years ago, virtual reality (a technology that displays an immersive, computer-generated world through a headset) and augmented reality (a medium that enhances the real world with digital graphics) were both very rudimentary concepts. Save for a brief appearance in the ’90s as cumbersome arcade games with choppy animations, VR was a kooky fantasy that belonged to futuristic flicks like The Lawnmower Man, and AR was as outlandish as flying cars or hoverboards.

      The past few years, however, have spurred a renewed interest in the technology. Augmented reality was first to break into the mainstream with the ill-fated Google Glass: the slightly-too-large spectacles banned from casinos and movie theatres for their capability to record video surreptitiously. Next came Snapchat filters—a part of the app that lets individuals overlay graphics and distort their faces on their phones—and Pokémon GO, a game in which cartoon characters pop up on phone screens as players point their cameras at real-world locations. Now AR is intelligent enough that, by wearing a wireless headset, users can lock a three-dimensional hologram in space, and manipulate it by moving their fingers in the air.

      Virtual reality was not far behind. Google Cardboard was released in 2014, which encouraged early adopters to put their phone in a small box and watch 3-D videos. Samsung’s Gear VR added controllers to the setup, but the biggest advances came two years later. Facebook-owned Oculus Rift, HTC Vive, and Sony PlayStation VR all launched computer- or console-based headsets capable of tracking a person’s movement in minute detail with mounted cameras. That technology created immersive and responsive worlds that are terrifyingly realistic.

      With the technology a pipe dream no more, studies project that the virtual and augmented reality industry will be worth anything from $79 to $215 billion by 2021. More than any other Canadian region, Metro Vancouver is set to profit from that success.

      “We definitely have a VR and AR hub here,” says Tam. “It’s still a very nascent technology, but we have unprecedented skills that have meant that we’ve really captured more than our fair share of the market already.

      “We’ve asked ourselves some key questions over the past few years,” he continues. “What are some of the attributes that differentiate Vancouver and British Columbia from every other jurisdiction on the planet? Why have VR and AR caught fire here? The answer is that we have considerable expertise in combining creativity and technology.”

      A woman manipulates a car axel wearing the Microsoft HoloLens headset

      Metro Vancouver’s media-arts sector has been gathering momentum for more than 40 years. In 1977, the B.C. government established a film development office to promote the province to the Hollywood community. Now known colloquially as Hollywood North, the region is home to some of the largest special-effects stages in North America, and is recognized as a world leader in 3-D animation and visual effects. Interactive entertainment, too, is a big draw for international talent. Companies like gaming giant Electronic Arts—which created its EA Canada wing just outside of Vancouver in 1991—houses the world’s largest videogame test operation, and more than 100 independent gaming studios call the Lower Mainland home.

      That creative foundation might be a great resource, but it’s a more esoteric aspect of Metro Vancouver’s history that makes its VR and AR industry versatile. Stacked with companies like Crystal Decisions—now a part of SAP—and branches of Microsoft and Amazon focused on data analytics, the Lower Mainland has an aptitude for record-keeping that offers a goldmine of information for up-and-coming businesses. Virtual and augmented reality can bring those files to life.

      “British Columbia has always been very strong at collecting data—particularly industrial data,” Tam says. “We have a plethora of information that is tied to natural resources. There’s everything from satellite imaging to radar information to sensors that are gathering information from the Internet of Things. On top of that, there’s all the health data we have amassed—the MRI images, the CAT scans, and everything like it—over 30 years.

      “There’s a treasure trove of data in the province, and what VR and AR helps to do is to turn it into useful information that can be accessed easily,” he continues. “As humans, we are naturally visual beings. These data sets are so voluminous they are currently almost impossible to navigate, and we need visualization to be able to understand them. VR and AR does that in unprecedented manners.”

      The ways that local companies have reimagined that material is staggering. In 2016, for instance, Port Coquitlam studio Finger Food Studios developed a program for vehicle manufacturers to create trucks in augmented reality. Using the Microsoft HoloLens—an AR headset that was developed at the tech giant’s Vancouver office—the software lets users add, resize, and change parts of the 3-D model simply by moving their fingers in front of the glasses. Previously, vehicle design involved cutting a life-size model out of clay: a process which took six months. Finger Food’s technology slashes that time to three days.

      Medical applications, too, are a big part of Metro Vancouver’s VR and AR expertise. Among other projects, UBC researchers last August unveiled the results of their partnership with the Microsoft Garage on the Holographic Brain Project. The app visualizes a human brain as a semi-transparent, 3-D object that floats in the air. Groups of viewers are able to see the hologram at the same time through their HoloLens headsets, and the technology allows students and doctors to walk around the brain, open up the structure with their fingers, and make notes on the MRI scans inside as a teaching tool.

      Researchers examine the holographic brain using the Microsoft HoloLens
      UBC Faculty of Medicine

      The innovation bubbling across Metro Vancouver spurred Tam to act. Recognizing the wealth of potential offered by the Lower Mainland’s companies, the then B.C. Tech president spearheaded a push toward setting up an incubator for the region’s VR and AR businesses. It would be a place to nurture early-stage companies, and allow them access to the partnership-ready Cascadia Innovation Corridor: the swath of land that connects Metro Vancouver to goliaths Amazon and Microsoft in Seattle. The workspace was dubbed the Cube.

      “B.C. Tech has always been committed to making our province the best place to grow a technology business,” he says. “We’ve supported developing companies for many years by providing acceleration, mentorship, and a whole range of services to connect aspiring entrepreneurs with the resources and coaching to help them to succeed. The Cube in many respects was an extension of that, but hyperfocused on augmented and virtual reality.”

      Opened in October 2017 by dignitaries including minister of innovation, science and economic development Navdeep Bains, B.C. minister of jobs, trade and technology Bruce Ralston, Vancouver mayor Gregor Robertson, and director of Microsoft Vancouver Edoardo De Martin, the Cube was created so that startups can share new developments. Offering workshops and training from local education hubs such as BCIT, as well as speaker sessions on topics like how to raise capital, the Railtown workplace proved a breakout success. Within months, it had run out of desk space.

      “I think the Cube tapped into a vein of passion for many,” Tam says. “It’s a place where people can experiment with development techniques, and help each other along the way. We have the benefit of being a small enough city to have a tight-knit, community feel, almost like a village, and yet be able to together create an industry that can compete on a world stage. It’s important for us to nurture that.”

      The power of partnerships

      In Tam’s view, Metro Vancouver’s strength in VR and AR is based on collaboration. While other tech sectors are notoriously aggressive and cutthroat, the Lower Mainland’s virtual- and augmented-reality ecosystem thrives on cross-pollination. Developments in the trade come fast, and homegrown businesses are constantly adapting to everything from new hardware releases to breakthroughs in 3-D coding. Understanding that Metro Vancouver’s ranking as a world leader is dependent on multiple companies succeeding, the local industry embraces cooperation.

      But while Tam focuses on promoting collaboration within the region, industry thought leader Dan Burgar stretches that concept further. As president of the Vancouver chapter of the VR/AR Association—a worldwide organization that links companies working in virtual and augmented reality—Burgar believes that the Lower Mainland’s success comes from its ability to connect across international borders, and to network with companies outside of the tech sector. In both areas, the district is excelling.

      “Vancouver is the model chapter of the VR/AR Association,” he tells the Straight on the line from his office, pointing out that his outlet includes members from across the Lower Mainland. “There are branches in countries as far-flung as New Zealand, Russia, and the UAE, but with our talent pool from the visual-effects and gaming sector, we’re the fastest growing division in the whole organization.

      “Five years ago, VR and AR was nonexistent in the Lower Mainland,” he continues. “Even in 2015, there were probably just a handful of companies, maybe 10 to 15, working in the space. Now we have upward of 150. We’ve gained a lot of ideas from talking to other international chapters. Our proximity to San Francisco, Seattle, and Portland has been a driver for a lot of business-to-business enterprise development, and it’s only going to get bigger from here. I think 2018 is the year when Vancouver really spreads its wings.”


      Growth in Vancouver’s division of the VR/AR Association is exploding partly because of Burgar’s vision. As well as welcoming VR and AR companies, the president reaches out to organizations that are set to be disrupted by the technology. Connecting with industries from fashion to fitness—both of which are being transformed by VR and AR apps—Vancouver’s chapter helps firms plan for the upcoming restructuring on their own terms. By linking local virtual- and augmented-reality companies with clients in their own region, business is booming.

      But despite his efforts, many industries have yet to realize how VR and AR will transform their business models. Pitches and discussions can only go so far in describing the technology, and convincing companies to invest with just a portfolio of screenshots is no mean feat. To realize his goal of mainstream acceptance for virtual and augmented reality, Burgar believes it’s vital to put more executives in headsets.

      “It can be really difficult to understand what the technology is without experiencing it yourself,” he says. “That was definitely the case for me. I was at a tech conference in Barcelona with a company I was working at. I saw that a booth actually had one of those strange VR headsets. I put it on, and it was this weird cooking and cleaning app. Suddenly it transformed this seemingly mundane task into something really fun, and I was completely immersed in this virtual world. As soon as I saw the technology, I knew it would change everything.”

      With its strong connections between VR and AR developers and professionals in different sectors, Metro Vancouver has carved a niche in the business-to-business space. Advancements in firefighting techniques, architectural design, and visualizing oil pipelines are a few of the many ideas currently in development by local companies. Burgar believes that finding solutions with the potential to transform industries, like those demonstrated by Lower Mainland outfits, will drive VR and AR adoption by businesses around the globe.

      “Imagine being in a foreign land where you don’t know the language,” he says. “It’s super tough to get around. Now imagine having AR glasses that can automatically translate all the words that you see. Or picture walking down the street, and having flashing arrows on the road showing you which direction to go. That’s becoming a reality. On the VR side, already companies like Walmart are using virtual reality to train their workers at home. Surgeons are operating on bodies in virtual theatres to give them the muscle memory to make incisions on real patients.

      “We’re going to see a huge drive in education, training, and use by different industries,” he continues. “VR and AR are going to totally change the way we communicate in the next three or so years. We think that for the next one to three years, enterprise is going to drive the technology. As the prices drop, we’ll see consumer adoption follow. Vancouver is a leader in creating those solutions.”

      Expertise in the business-to-business field

      One of the industries where Metro Vancouver’s VR and AR companies are already excelling is the mining sector. A trade that relies on collecting data from huge archives—an area where the region shines—mining has already seen many multimillion-dollar firms use the technology to streamline their planning processes. By allowing those businesses to examine huge amounts of information visually, local companies like LlamaZOO and Finger Food offer the tools to simplify designing new mines.

      Currently, much of the information used to draw up mine plans exists in different formats. Complex and unwieldy, the data is tough to read, particularly for upper-level executives and government officials who are often not trained to interpret files like technical CAD drawings or maps. In order to secure their permits, mine developers must lease the land from local authorities, and the challenge of understanding the information holds up an already slow process. Typically, it can take up to four years to get a site approved.

      LlamaZOO, a leading VR and AR company with offices in both Vancouver and Victoria, has created software that can shave six months off that time.

      “We have a program called MineLife VR,” Kevin Oke, cofounder and VP of sales for the company, tells the Straight in a downtown coffee shop. “It lets people visit a mine site in virtual reality. You can look at the area at its life size, and zoom in and out. You can easily compare historical, current, and future data for the site, including the locations of pits, drill holes, ore bodies, and infrastructure. The way that we’ve combined big 3-D data sets and geospatial information is really engaging and easy to access.

      “Instead of physically flying people up to a site—which is terrible for a company’s carbon footprint, has major safety risks attached to it, involves big insurance costs, and needs careful scheduling—you just need to put on a VR headset,” he continues. “You can determine things like where you want the pit, what angle to position a ramp, and how wide to make a bench. We’ve got a collaboration feature, so you might be in Peru at the mine, and I might be in the Vancouver office, and we would virtually both be together at the site, at its one-to-one scale, totally immersed in it. By putting all the data in one place, and not having to send people to a physical location, you can save a lot of time and money.”

      MineLife VR software on the HTC Vive

      Oke created LlamaZOO with his business partner Charles Lavigne three-and-a-half years ago. Like many other founders of VR and AR companies, both came from the Lower Mainland’s thriving videogame industry, but wanted to work on something different. The pair saw how virtual reality was gathering momentum. Headsets were starting to be released, more capital was funnelling in from investors, and digital training was being prioritized by employers. It was, in Oke’s words, a perfect storm.

      “Years ago, I wouldn’t have been interested in the enterprise side,” he says. “Your tastes change over time, though. Games are driven by popularity. You either have a hit or you don’t, and on platforms like mobile it very much depends on how much you spend on marketing. When you make a game, you can’t say it’s able to solve a problem or save somebody money, because it’s like candy. We didn’t want to make candy anymore. We wanted to make painkillers.”

      Metro Vancouver is a fitting home for a company focused on natural resources. Gold, lead, zinc, silver, copper, and coal are all abundant in British Columbia, and the province has boasted a thriving mining industry since mid-1800s. For Oke, it was important to work with the region’s existing expertise.

      “The first product LlamaZOO put out was software for training veterinary students,” he says. “The idea was always to branch out from there. When we started looking for what our next development was going to be, we turned to what’s in our back yard. We have really big data sets for the mining industry that have been gathered locally. Vancouver was a natural-resources town before it became a tech town, and that’s one of the cool things about what we’re doing—we’re merging the traditional B.C. economy with the new economy.”

      A user views options to visit a mine site in virtual reality

      LlamaZOO’s reach has extended far beyond the province, however. Currently working with some of the largest mining corporations internationally, the company is looking to break into markets across the globe. In Oke’s view, those opportunities would have been impossible without B.C.’s generous funding and grant initiatives for VR and AR companies.

      In 2010, the province introduced the interactive digital media tax credit (IDMTC), a scheme that now hands back 17.5 percent of salaries and wages to virtual- and augmented-reality businesses. Six years later, it invested $100 million in venture capital for local tech companies. The federal government, too, provides aid to startups, offering to subsidize a portion of an organization’s costs under the industrial research assistance program (IRAP), and also pledges a sizable scientific research and experimental development (SR&ED) federal tax credit. That assistance has been instrumental in securing the Lower Mainland’s status as a VR and AR leader.  

      “Those schemes have been hugely helpful for us,” Oke says. “We need it to compete with the U.S. We don’t have as much venture capital as they do. We’re smaller in Canada, and there’s less money going around because the Canadian mindset is to be more conservative. The tax credits and funding doesn’t level the playing field totally, but it’s absolutely critical for us to compete. It makes B.C. a great place to start a company.”

      The speed at which local VR and AR businesses are growing, though, comes at a price. One of the biggest problems facing the industry is finding local talent to meet the increasing demand. Although the B.C. government is funneling huge resources into leading tech and design programs for students at Vancouver institutions like UBC, BCIT, and Emily Carr University of Art and Design, virtual- and augmented-reality projects require specialized knowledge that is still in short supply.

      Attracting global workers has since become a priority for Lower Mainland startups. Unsurprisingly, it’s an area in which Metro Vancouver excels. Regularly ranked as one of the top locations in the world to live, and with easy access to beaches, hiking, and snowsports, the region is a draw for many would-be employees. The high cost of living is offset by tech-sector workers typically making around 85 percent more than the average B.C. salary, and at a moment when the U.S. is tightening its borders, Canada’s Federal Skilled Worker program makes it easy for local VR and AR companies to hire internationally. As a result, companies like LlamaZOO scoop up top global talent.

      “We’ve had employees from many different places,” Oke says with a laugh. “We have a really international team. Currently, our office has people from the U.K., Mexico, and Kenya. In the past, we’ve had individuals from Brazil, Bangladesh—all over. We make a point of taking the best people, no matter where they’re from.”

      Building the future with top international talent

      That's a strategy also employed by one of Metro Vancouver’s most well-known VR and AR companies, the multichannel business Archiact.

      Growing from five employees working in a basement to a team of over 100 in a glittering downtown high-rise, the organization achieved its success by imagining many different ways to apply virtual and augmented reality. Producing everything from business-to-business applications to high-end games, Archiact’s work spans many platforms, and offers developers the chance to work in both VR and AR—often switching between the two in the same day. It was that fast-paced innovation that drew senior producer Ed Lago to the company.

      “I worked in South America over the past 10 years on a range of different platforms—mobile, console, and others,” he tells the Straight by phone from Archiact’s office. “In the last few years before I came to Vancouver, I was working for Samsung in Brazil, doing games for AR and VR. One of them became a launch title for AR and VR for consumers in 2015. Some of the producers from Archiact found my work. We started a conversation around that time, and then they invited me to move here.

      “Virtual and augmented reality are on another level in this city,” he continues. “In Brazil, we don’t have very much government help. It’s pretty much just a small group of people trying to survive. Here, there are a lot of different developers doing a lot of different things. It’s like another dimension.”

      Archiact hosted the 2017 CVR conference at the Vancouver Convention Centre
      Kate Wilson

      Top hardware designers such as HTC, Oculus, and Samsung are repeatedly looking to Metro Vancouver companies to create software for their platforms. Archiact is one of their first calls. The tech giants have consistently tapped the local company to create games and business programs to run on their gear, and to develop flagship apps for yet-to-be released headsets. Lago is at the head of one of those projects.

      “We developed a game for Samsung’s Gear VR and Google Daydream called Hidden Fortune,” he says. “It’s a little bit like Harry Potter in a way, because you have to use your magic wand to solve puzzles and quests. It was a really successful title, and we achieved some great numbers.

      “I was showing the game in September, and I was called to a meeting with the HTC team in San Francisco,” he continues. “They really liked it, and asked if we wanted to make a demo for their upcoming headset. That’s when the opportunity came to make something for the HTC Vive Focus. We were one of the first developers to see it.”

      Currently, the top VR headsets are tethered to computers or consoles with wires. While users can experience free movement by carrying a PC in a backpack, it can still be cumbersome to transport the gear. The HTC Vive Focus is a stand-alone headset that carries all the computing power inside the hardware. Because it’s self-contained, users don’t need to add a smartphone or mainframe. That freedom allows wearers to walk, jump, and crawl around a large space, and opens up exciting possibilities for the future of VR.

      “The first thing we did when we started developing the new Hidden Fortune was to put it on the Vive Focus headset, and start walking,” Lago says. “We walked the entire length of the studio, and it was amazing—we could just walk forever in the game. As well as that movement, we’ve made it so you need to crouch or reach over objects with the controllers to achieve your objectives. It’s an almost entirely new design, and we’ve had to change the name to Hidden Fortune: Unexplored to reflect that.”

      A still from Hidden Fortune: Unexplored

      The golden age of videogame development in Metro Vancouver began in the early ’90s. Local studio Distinctive Software was bought out by Electronic Arts, and the new company started producing blockbuster-budget AAA titles in the region, including the NHL, NBA, and FIFA franchises, along with snowboarding favourite SSX and shooter Medal of Honor: Heroes 2. Around the same time, a number of independent studios sprang up in the Lower Mainland. Companies like Next Level Games and Smoking Gun Interactive have moved into securing publishing deals, and many studios have successfully pivoted to mobile—a sector that generates much of the local industry’s multimillion-dollar annual revenue.

      The emergence of VR and AR opened new doors to developers. Early adopters like SkyBox Labs—a development partner for Microsoft—and Fire-Point Interactive, who last month released their flagship title Tooth and Claw, were some of the first to work in the new medium. In all, the Lower Mainland currently boasts more than 30 companies creating games with the technology.

      Given the region’s history of releasing award-winning titles, Lago is proud that a local company has been selected to create the next step in gaming technology. 

      “The HTC Vive Focus launched in China for the first time last week,” Lago says. “I can tell you that Hidden Fortune: Unexplored will be a flagship app. It’s one of the games—one of only 20, we think—to be released together with the headset. That’s a big deal for Archiact.

      “I feel very lucky to be here in Vancouver working on VR and AR technology,” he continues. “There are a lot of reasons that make it such a good place to be. There are many VR developers here, and the companies who are putting themselves out there and being the most social are those who are successful. As well, the government is really supportive.

      "Most of all, though," he concludes, "it’s just a really exciting place to create.”

      Follow Kate Wilson on Twitter @KateWilsonSays