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> Citing COVID-19, CEO Rony Abovitz wrote in a blog post that the company needed to shift focus Right... because of Covid-19. As a counter example, Animal Cros

> Citing COVID-19, CEO Rony Abovitz wrote in a blog post that the company needed to shift focus Right... because of Covid-19. As a counter example, Animal Crossing on the Nintendo Switch is doing phenomenal right now, in part due to Covid-19.

throwaway2048 7y ago
Products consumers enjoy at home are getting a big bump, Startups relying utterly on the VC cash gravy train less so.
- alephnan 7y ago
  My point is that the Magic Leap CEO made it seem like there is a lack of consumer demand for gaming / entertainment products, due to a lack of job / financial prospects during Covid-19.
  - JakeTheAndroid 7y ago
    While there is absolutely a consumer market for gaming and entertainment, Magic Leap has nothing to offer in that space. The apps store they offer is very limited and it's mostly tours of locations, or design tools for making stuff that works with the spacial dimensions. They do not have any real games to play that the public at large would find fun for more than an hour or so. Their apps are like PoCs for what you can do with Magic Leap. If FF7R was on Magic Leap, I bet they'd be selling a lot more units and it'd be a great time for them. Instead, you're better off getting the Oculus or Valves VR where you have tons of actual games to play and support for streaming apps. There is no way for Magic Leap to capitalize on the consumer purchasing right now, because they don't have a catalog that supports the hardware to any meaningful degree. And they can't suddenly churn those things out in the space of a month since we've been hit with quarantine.
- ilikehurdles 7y ago
  I've heard that VCs are doubling down on their portfolios and avoiding new company investing. Maybe Magic Leap was just not looking all that great to its VCs and they'd rather focus their resources on companies that are more likely to come out of this pandemic as big winners.
save_ferris 7y ago
Nintendo is a well-established company with a solid platform for its Switch that sells millions of units. They've been doing this for a little while longer tbf. I get the sense that "shifting focus" means that Magic Leap were so focused on the hardware that they didn't really think concretely about bringing a viable platform to market, or something like that. I just don't understand how a company raises that kind of money and gets totally exposed during a financial crisis like this. Did they really raise that much money without a concrete go-to-market strategy?
- wpietri 7y ago
  But nothing about the crisis changes fundamentals negatively for at-home entertainment. Covid-19 is a convenient excuse here. > Did they really raise that much money without a concrete go-to-market strategy? I'm sure they had a nominal strategy. But if you take the anthropologist-from-Mars perspective on Magic Leap, it looks like their real business was selling feelings of excitement to investors. This is a common phenomenon with build-it-and-they-will-come businesses. If you want to crate a good business, you need contact with reality early and often. You need to test your hypotheses on actual customers, because that's how you really learn to maximize delivered value. If you want gobs of investor money, on the other hand, it's often better to have no proof at all. With $0 in revenue, investors just have to imagine the billions that await. But once you have $1 in revenue, suddenly projections get anchored to real data. Rather than reveling in dreams of what people might do with, say, Segway or Google Glass, people insist on looking at the dreary reality.
  - ryandrake 7y ago
    Living off the money of "believer" investors seems to be a tried and true tech business strategy. Why sell hard tech to lots of customers when you can sell dreams to a handful of rich investors? One can argue that Silicon Valley is simply an enormous apparatus for transferring wealth from investors to landlords by way of tech employees.
    - wpietri 7y ago
umvi 7y ago
It's an easy scapegoat. OneWeb blamed it for going bankrupt even though everyone knew they were in a precarious financial situation 6 months before covid-19 even existed.
- MattRix 7y ago
  Patreon just laid off a ton of people under the guise of Covid-19 despite doing even better during this situation.
cushychicken 7y ago
Never waste a good crisis!
robocat 7y ago
Supply chain, factory production, and delivery all affect the ability to produce and supply hardware devices. Animal crossing is software, so not a fair comparison.
- vernie 7y ago
  What does Animal Crossing run on?
  - dflock 7y ago
    The Nintendo Switch - which Nintendo has already shipped millions of units of, giving them a ready market for any software they release, even if they never ship another Switch.
    - alephnan 7y ago
      Anecdotally, people procure the Nintendo Switch just to play Animal Crossing.
- alephnan 7y ago
  That suggests there is demand for what they have to sell. Surely if they stood to profit, they would build it. They still have the Magic Leap listed for sale on their website. The real issue is likely consumers don't demand their product
Bubbadoo 7y ago
Oh we're going to hear about lots of bad things due to Covid-19. It's the internet crash and Great Recession rolled into one.
deleted 7y ago
[deleted]

throwaway2048 7y ago

Products consumers enjoy at home are getting a big bump, Startups relying utterly on the VC cash gravy train less so.

alephnan 7y ago
My point is that the Magic Leap CEO made it seem like there is a lack of consumer demand for gaming / entertainment products, due to a lack of job / financial prospects during Covid-19.
- JakeTheAndroid 7y ago
  While there is absolutely a consumer market for gaming and entertainment, Magic Leap has nothing to offer in that space. The apps store they offer is very limited and it's mostly tours of locations, or design tools for making stuff that works with the spacial dimensions. They do not have any real games to play that the public at large would find fun for more than an hour or so. Their apps are like PoCs for what you can do with Magic Leap. If FF7R was on Magic Leap, I bet they'd be selling a lot more units and it'd be a great time for them. Instead, you're better off getting the Oculus or Valves VR where you have tons of actual games to play and support for streaming apps. There is no way for Magic Leap to capitalize on the consumer purchasing right now, because they don't have a catalog that supports the hardware to any meaningful degree. And they can't suddenly churn those things out in the space of a month since we've been hit with quarantine.
ilikehurdles 7y ago
I've heard that VCs are doubling down on their portfolios and avoiding new company investing. Maybe Magic Leap was just not looking all that great to its VCs and they'd rather focus their resources on companies that are more likely to come out of this pandemic as big winners.

save_ferris 7y ago

Nintendo is a well-established company with a solid platform for its Switch that sells millions of units. They've been doing this for a little while longer tbf. I get the sense that "shifting focus" means that Magic Leap were so focused on the hardware that they didn't really think concretely about bringing a viable platform to market, or something like that. I just don't understand how a company raises that kind of money and gets totally exposed during a financial crisis like this. Did they really raise that much money without a concrete go-to-market strategy?

wpietri 7y ago
But nothing about the crisis changes fundamentals negatively for at-home entertainment. Covid-19 is a convenient excuse here. > Did they really raise that much money without a concrete go-to-market strategy? I'm sure they had a nominal strategy. But if you take the anthropologist-from-Mars perspective on Magic Leap, it looks like their real business was selling feelings of excitement to investors. This is a common phenomenon with build-it-and-they-will-come businesses. If you want to crate a good business, you need contact with reality early and often. You need to test your hypotheses on actual customers, because that's how you really learn to maximize delivered value. If you want gobs of investor money, on the other hand, it's often better to have no proof at all. With $0 in revenue, investors just have to imagine the billions that await. But once you have $1 in revenue, suddenly projections get anchored to real data. Rather than reveling in dreams of what people might do with, say, Segway or Google Glass, people insist on looking at the dreary reality.
- ryandrake 7y ago
  Living off the money of "believer" investors seems to be a tried and true tech business strategy. Why sell hard tech to lots of customers when you can sell dreams to a handful of rich investors? One can argue that Silicon Valley is simply an enormous apparatus for transferring wealth from investors to landlords by way of tech employees.
  - wpietri 7y ago

umvi 7y ago

It's an easy scapegoat. OneWeb blamed it for going bankrupt even though everyone knew they were in a precarious financial situation 6 months before covid-19 even existed.

MattRix 7y ago
Patreon just laid off a ton of people under the guise of Covid-19 despite doing even better during this situation.

cushychicken 7y ago

Never waste a good crisis!

robocat 7y ago

Supply chain, factory production, and delivery all affect the ability to produce and supply hardware devices. Animal crossing is software, so not a fair comparison.

vernie 7y ago
What does Animal Crossing run on?
- dflock 7y ago
  The Nintendo Switch - which Nintendo has already shipped millions of units of, giving them a ready market for any software they release, even if they never ship another Switch.
  - alephnan 7y ago
    Anecdotally, people procure the Nintendo Switch just to play Animal Crossing.
alephnan 7y ago
That suggests there is demand for what they have to sell. Surely if they stood to profit, they would build it. They still have the Magic Leap listed for sale on their website. The real issue is likely consumers don't demand their product

Bubbadoo 7y ago

Oh we're going to hear about lots of bad things due to Covid-19. It's the internet crash and Great Recession rolled into one.

deleted 7y ago

[deleted]