Creative AR Studio NZXR Aquired by Niantic
13 April 2022

Even for members of the general public who may be unfamiliar with the name Niantic, you can guarantee they will know their technology very, very well…

From the Keyhole product in 2001 that allowed users to zoom into interactive 3D maps of the planet. Conceived as a video game that would let people from across the globe experience any corner of the planet, it was aquired by Google in 2004 and was renamed Google Earth. Several members of the original Keyhole team still work at Niantic today.

Then in 2016, Niantic launched Pokémon GO, and it became an overnight global phenomenon. Pokémon GO remains the most popular augmented reality app of all time, and the most profitable. By the end of 2016, Pokémon GO had generated more than $1 billion in revenue, crossing that threshold faster than any app in history.

Now in April 2022, Niantic welcome the New Zealand creative AR team at NZXR into their fold.

NZXR itself was founded like steel, under the pressure of a heated environment: early in the COVID-19 pandemic their Wellington-based Magic Leap team was one of many made redundant worldwide. At that point the team had spent 5 years together working on in-development and leading-edge headworn augmented reality. They decided that we didn’t want to lose their collective expertise and team dynamics. So, in a flurry of activity, the team started NZXR.

It wasn’t long before NZXR had more work than they could handle. VR safety training. Dozens of AR prototypes. Design and engineering support to Reality Crisis for their awesome AR skateboarding game Skatrix. Collaboration with Hackman on Destination Mars, their Unreal Engine powered interactive theatre experience that has had a successful run at Te Papa Tongarewa, the national museum of Aotearoa New Zealand.

Dennis Hwang, VP of Visual and Interaction Design at Niantic said of the acquisition:

“We’re excited to welcome NZXR to Niantic and continue building the future of AR and the real-world metaverse together. NZXR shares our vision for how technology can positively impact our lives out in the physical world. The NZXR team will help us accelerate new kinds of AR experiences for the real-world metaverse where our explorers can create, contribute, and interact with digital objects in a way that is persistent and shared by everyone.”

James Everett, the co-founder of NZXR, published their own thoughts which stated:

“We’ve been fans of Niantic’s work and players of their games for a long time. Augmented Reality isn’t just virtual content being displayed in the physical world, it’s also about using location, context, and social interactions to augment our everyday experience. Niantic does this for millions of players and with Lightship they’re opening the doors to their AR tech for developers around the world. These are the things that made us jump at the opportunity to work with Niantic shortly after we started NZXR.”

James references in particular the support from the game development community in New Zealand and the help and support they received when taking their first startup steps during those turbulent times:

“The support from our community and colleagues helped us build a thriving studio. Most importantly, thank you to our whānau and friends who stood by us as we took our first terrifying and exhilarating leap into startup land and have cheered us on every step of the way.”

Our Vice Chair Carl Leducq sat down with James Everett recently, to talk about the acquisition:

Carl
Congratulations James, on the recent acquisition of NZXR by Niantic! I’m sure you and the team are really excited to share that news and hopefully it wasn’t too long in the making, but I have a few questions just to kind of pick your brain and this exciting moment, just to understand a bit more how you’re feeling, how the team’s feeling, how this decision changes things for you, the kind of the trajectory that you’re going in now that you’re a creative director at Niantic. So I guess first question, just to kick it off as is how does it feel to be acquired by Niantic?

James
Really good. It’s you know, we’re excited about it because we’ve been working with them for just over 18 months, on a variety of projects and sort of, as we were doing that, we were like, oh, these are really cool folks. We like them, this is good. And over time we just started working more and more with them. And it seemed like at some point that the question came up of like, “Hey, do you want to make this a more permanent arrangement?” And we thought about that long and hard. And we said, well, let’s talk about it. And so we kept talking about it and it, yeah, just got to a point where it made sense. And so we decided to move ahead. So for me personally, I’m really excited that I will be able to put down my biz dev tools and things like that, and focus more back on the creative side. You know, we spent two years building NZXR and the learning curve of starting a studio is significant as you imagine. We have a lot of experience building games and building teams and all those sorts of things, but the running and operations of the business as a whole other stack of work. So I’m not sad to see the back of that bit of work and, excited to be moving back into more creative work for myself and for all of us really, it’s a chance to put the whole team under one umbrella and focus our efforts, quite a lot, which is great. Prior to this, we had at any given time three to eight clients across the team with multiple projects for each of them. And so as a result, we were always working in many, many directions, but rarely in a very coordinated fashion, because of course there was very little overlap between clients. So now it’s cool. We all work with Niantic. Our mandate really is to accelerate augmented reality development across all the teams there. So get to basically keep doing the things that we’re doing, just all of us doing it together, which is awesome.

Carl
Right. So are you still going to be operating as a service business for like augmented reality projects or is it all going to be kind of behind closed doors now?

James
I mean so we are Niantic employees where we a Niantic team, but we’re going to be working with all the teams at Niantic too, to help them put AR features into their games, and just yeah, make really cool stuff there. So it’s actually probably going to be less behind closed doors than the stuff that we’ve been doing for the last couple of years, because, Niantic is all about making games that people play. So eventually the work that we do will make its way up to millions of players, which is really exciting because we’re used to a much smaller audience than that with most of our work.

Carl
Yeah. So one of your recently announced projects, the great crane cakeoff, will there be like similar projects like that coming from the team?

James
I’m not sure yet. Probably not in the short term. Our, our focus in the short term is really going to be on the needs of different game teams at Niantic. Our role really is in the early prototyping and technical development phase, and so the intent behind all of these things is that we basically work as a co-developer with those other teams. So it’s not us, going “Hey, here’s a fun idea”. And then chucking it over a fence to another team, it’s we get a briefing in from the team that we’re working with. We brainstorm with them, we pitch back a bunch of ideas. They pitch ideas to us. We start prototyping those things. And once we get to a point where everybody’s like, yeah, this is what we want to do. Then we help them with integration as well, so that they’re able to take ownership of those features and start with the integration into the core product and then expansion from there mostly by their teams. So the, the hope is that we are able to, as I say, act as sort of an accelerant to their work. But we’re, you know, just a message away on slack. So it’s not like we’re sort of operating nearly as arms length as we were previously.

Carl
Exciting. After you left Magic Leap and WETA two years ago to form NZXR was the long-term kind of vision to be acquired, or know what the future might hold back then?

James
No, not at all. I mean the first six months was mostly terrifying as we tried to try to just like understand what we were doing and whatnot, we were very fortunate to receive some really wonderful support from, from developers in Aotearoa and our former magic leap colleagues. Every time they landed somewhere, we would get a message from somebody going, “Hey, I’m over here now let’s talk, um, we’ll see if there’s any opportunities” and some of those opportunities bore fruit and that’s what helped us build a thriving studio in the last couple of years. The acquisition thing was always out there because there is a ongoing, incredibly high demand for talent, but it wasn’t necessarily a goal of ours. Really, what we wanted to do was to continue making world first AR stuff, basically, and Story XR was our stab at that our own product, and that started to get a lot of traction. Actually, we were going to develop that as a business to business application originally, because we were able to do the things that are really difficult for a lot of folks, right? Multiplayer AR with persistence is really hard, and there’s a lot of great teams out there that can make amazing projects in Unity, but that technical sort of leap out to the AR space is one that, unless that’s the background of the team, it’s not one, it doesn’t make a lot of sense to make that investment yourself. So I think there was a really clear product ization path for us with Story XR, and that’s probably the path that we would have continued down for the next few years is trying to make an ongoing, sustainable business with our own products, rather than continuing as much work for hire, which, you know, is a tale as old as the game industry there. It’s been really, really good to, to kind of go like, “okay, well, we don’t have to stress about that anymore”. And now we just focus on making awesome things.

Carl
Totally. So, so projects like, like Story XR with they be put on hold or discontinued, like for now, is that the status?

James
We’ll see what happens. We’re just, we’re literally on like week two at the moment with Niantic and just getting our laptops set up and all those kinds of things. There’s a lot of interest from our colleagues at Niantic about Story XR. You know, obviously Niantic has an enormous amount of internal tooling and, the Lightship platform that they’re now opening up to more and more developers. So, you know, it’s, if what we’ve got is duplicating effort, then there’s not really a reason to eep that going, but there are almost certainly parts of it that will be useful to ourselves and other teams. And if, for sure there’s a whole bunch of learning in there that we ca, help expose to the rest of the Niantic crew.

Carl
Awesome. Yeah, I appreciate that. I only have couple more questions. What advice would you give to New Zealand game developers, whether they’re working in augmented reality or any other niche corner of the games industry, what advice would you give them on, you know, trying to predict what’s going to happen in the future or kind of where to look, you know, what’s going to come next? Is there anything that you kind of have learned from this process that you’ve been through that you would tell your younger self that could have helped?

James
It’s not like there’s a specific thing. what I’d say is that augmented reality is changing so, so quickly right now, you know what I mean? And again, that’s a truism for the game industry, right? Like we are forever changing. But AR is a space that is rapidly evolving and the use cases are just coming out of the woodwork, right? Like there’s always a different way of looking at these things. So, I mean, we, we had some success with more game oriented things, but we also had quite a bit of success with more, you know industrial applications, but like, you know, outside of the entertainment space, the reality is that the next however many years, everybody’s coming to our party, right? Like real time 3d that’s interactive that has good UX wrapped around it. That is going to become the baseline for so many things that people interact with over the next decade. And so the skills that game developers have, like were some of the only people in the world that work in this stuff, because it’s our stock and trade. And I think we’ll see just a huge amount of opportunity come out of that. We’re also going to see a massive number of new entrance to the space. You know, there’s a lot of people who are coming from outside of the games industry who are now picking up our tools for the first time and going “Alright, Unity, what’s the deal here”. And it’s like, welcome to the party. There’s a lot to learn, you know? And so, yeah, it’s, it is going to just continue to be a big thing and an ever-growing thing. And I think for any developer who is in the space or starting in this space, I guess my biggest piece of advice would be very flexible and don’t constrain yourself to your previous expectations. If you’re coming from a more traditional game space, you know, just be open to just how many different people and fields are going to be coming into this. And so you’re going to find opportunities everywhere, particularly places that maybe you’re just unfamiliar with. And so, you know, you might be the expert in game development or augmented reality, but you’re probably not the expert in construction or food safety or anywhere else that these technologies get used. So be flexible, be curious and be ready to learn a whole lot.

Carl
Yeah My last question was thoughts on the kind of future of the AR space, but I think you touched on that quite well. So I guess if I was to reframe it, there’s still players like apple that haven’t really entered the space fully yet and snap continuing make plays. As someone who’s got a pulse on the current trends and, and innovations in the space, is there any big, like next frontier that you’re looking forward to like any big change, whether it’s a new device or a new use case that’s being more widely adopted that, that you think is going to really change the way people interact with the space?

James
Like head-worn displays? So stuff like the magic leap and Qualcomm Snapdragon spaces, and that sort of thing are obviously gonna be like a huge change as they reach, I would say, you know, and anything approaching mainstream adoption. We’re still a long ways away from that, but in the meantime, apple and Google are improving AR kits constantly. What phones are capable of doing is just wild now and there’s a lot to learn from how to design experiences for phones that some of which translates over to head-worn stuff. And some really does not, so yeah, a lot of change in that space, but I think for the sort of the next couple of years, we’re, we’re going to be heavily focused on mobile phones because that’s where the audience is. I think what people will need to get used to is creating for lack of better term bite-sized AR content, because holding a phone out in front of you for more than two minutes is really hard on your arms, and it’s not a good time, you know? So how people get into and out of stuff very quickly so that you can have an experience or get the information presented in the right context that AR is great for, and then get out of it again and be able to dip in and out very, very quickly. I think that’s where we’re going to start to see a lot more everyday use cases. Because if you want to build an AR game that you’re expecting people to play for, let’s say 20 minutes, you can’t keep your arms up that long. Right? Those are the big changes I’m expecting from a UX perspective that needs to also be supported by the technology, which is the moment my phone comes up, the content is there and it’s in the right place. And those things are all starting to become possible today. and will be kind of the norm, I think, in the next year or so. So that’s what I think going to be the biggest change in terms of practical day-to-day development will be the understanding of just understanding how to use these things and how to get the most value out of them for players in very short stints and being able to come in and out of them. And so I think that’s the, that’s a spot where there’s going to be a lot of learning in the next 12 to 18 months.

Carl
Awesome, really, really valuable. So thank you so much for, for your time and just answering these questions and providing your perspective. I hope you, and the team are able to have a well-deserved break before you get right into the weeds of, of Niantic and working for them. But I know that the New Zealand games community is excited to see what you guys produce and what you guys do for the space. So, so thanks a lot for your time. Appreciate it.

James
Thanks for that.