We are truly standing on the precipice of a cyberpunk future, and I, for one, welcome our new technocratic overlords who are promising to bring us augmented- and virtual-reality vision.

Technical Illusions is a new company founded by former Valve Software employees Jeri Ellsworth and Rick Johnson. They are working on a device called CastAR that is capable of augmenting reality and immersing a player in virtual reality.

Valve cut Ellsworth’s and Johnson’s positions in February, but the pair continued their work on the CastAR that they began while working for Valve head honcho Gabe Newell. Now, they are attempting to raise $400,000 through a crowdfunding project on Kickstarter to turn their concept into a consumer product.

A few hours into the campaign, backers already contributed more than $80,000.

Augmented reality is the concept of layering game and video data and images over the real world. Certain smartphone apps and games use AR to make it look like enemies are zooming around the player’s environment.

CastAR is essentially a pair of glasses bundled with a variety of sensors and a pair of tiny projectors (one above each eye). This combination of technologies is capable of a few eye-shattering feats:

Those face-mounted projectors can display an interactive play field onto a surface. The glasses use existing 3D technology — the same kind used on some 3D televisions —  to give the image depth. Simultaneously, sensors can track head motion so that the projection changes the perspective of the image. This means that CastAR can create interactive Dugneons & Dragons maps where each player sitting around a tablet can see a unique angle of the environment.

That covers the AR capabilities, but CastAR is also a VR solution. Technical Illusions accomplishes this by attaching a clip-on peripheral to the glasses that directs the images of the projectors over a player’s eyes.

The company explains how it all works in its Kickstarter pitch video below:

[kickstarter url=http://www.kickstarter.com/projects/technicalillusions/castar-the-most-versatile-ar-and-vr-system width=558]

To get all of the AR and VR functionality, backers need to contribute at the $285 level. This creates a little bit of competition for Oculus VR’s Rift headset.

Oculus Rift is a face-mounted display that also uses head-tracking sensors to create a 3D virtual-reality experience for gamers. Unlike CastAR, Oculus puts the screen directly in front of the eyes rather than directing projects that sit above them. This means Oculus doesn’t have any AR features.

CastAR is playing in different markets than Oculus. Technical Illusions is focusing on the augmented-reality capabilities, which the Oculus isn’t built for, but that doesn’t mean CastAR cannot jump out in front of the VR market and potentially steal Oculus Rift’s momentum.

With Oculus VR and Technical Illusions, virtual reality seems like it is on the verge of breaking out into a major consumer-electronics category. The two startups are establishing that the technology is at a point where players can feel totally enveloped by a game world, now they just need to prove they can make money doing it.

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In 1972, Nolan Bushnell co-founded Atari with Ted Dabney. The company went on to launch seminal video games such as Pong and Breakout that defined a generation of gamers. Almost 43 years later, he’s still the spokesman and showman of video games.

Bushnell still has a lot of fun as the public voice of gaming. He has an educational games startup, BrainRush, and he’s an advisor to many game startups. He wrote the book, “Finding the Next Steve Jobs,” where he talked about how he could have owned a third of Apple for $50,000. He’s also writing a new book, “The Unemployment Myth,” about how tech can both destroy and create jobs.

I interviewed Bushnell on stage at the opening of our GamesBeat Summit, our executive event last week at the Cavallo Point resort in Sausalito, Calif. Bushnell was the opening talk. Just before it, he asked me how irreverent he should be. “Just be yourself,” I told him. And he was. He wasn’t afraid to speak his mind, and had us laughing from the start.

Here’s an edited transcript of our conversation. You’ll see why he was the most popular speaker at our event.

Above: GamesBeat’s Dean Takahashi and Nolan Bushnell, founder of Atari.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: You’re working on something called BrainRush. Can you tell us about that? Why is this a bold idea?

Nolan Bushnell: I’ve always felt that education and games were linked in some very interesting ways. As you get older you start thinking — I have eight kids. I saw them learning through games and learning through school. Games were better. I thought it would be fun to work on some software and push it forward. We’re having modest success. It’s a tough market. Selling to government institutions — one should never do it. But it’s going to be fun.

GamesBeat: You say that games make us smarter.

Bushnell: Absolutely.

GamesBeat: Here’s the second part of the question. How does that explain Gamergate, then?

Bushnell: Well…

GamesBeat: That’s a gotcha question.

Bushnell: The reality is that our brains are constantly creating new dendrites, new axons. Unfortunately, about half the population are dead from the neck up. I’ve found that one of the things that makes a successful company is only hiring alive people. If you continue with that, you can have a pretty good company.

It’s the whole idea that you want to surround yourself with people with enthusiasm and passion and curiosity. So much of what our educational constructs do is fight that. They actually train out creativity and enthusiasm. They pound in boring 45-minute lectures. You have to deal with growing up without having all the spark snuffed out of your life. Unfortunately that’s the reality of today’s school system.

GamesBeat: You wrote a book about finding the next Steve Jobs. You confessed very self-effacingly there that you had a chance to get a third of Apple for $50,000.

Bushnell: That’s true, and I regret not doing it.

GamesBeat: What was the point of writing that book?

Bushnell: If you look at Back to the Future, there’s a lot of different threads. The fact that I introduced Steve to Don Valentine, who introduced Mike Markkula to Jobs — I think Markkula was as important to the formation and early days of Apple as anyone. I’m not arrogant enough to believe that if I had made the investment, I would have been the CEO or president that Markkula was. The whole outcome may have been different.

At 21, Jobs was a very unfinished product. He didn’t smell well. There were a lot of things — my litmus test for a good CEO, it’s not Steve Jobs. But he grew into it. So who knew?

Above: Nolan Bushnell, speaking at length about the future of video games, with GamesBeat Summit moderator Dean Takahashi

Image Credit: Michael O'Donnell / VentureBeat

GamesBeat: You have a new book in the works as well. Tell us more about that one.

Bushnell: It’s called The Unemployment Myth. Technology in the next 20 years will destroy, in the United States alone, about 50 million jobs. It’s going to be the major war and political issue of the next 20 years.

Ned Ludd, 1779, was a weaver. He was a good weaver. He had a wife and three children. He went to work one day and he got fired. He realized he got fired, amongst a bunch of his buddies, because an automatic loom was installed. He decided, this cannot stand, so he got a bunch of pickaxes and hatchets and went in and destroyed the looms that night. That became the start of Luddism as an anti-technology movement.

Think about what the self-driving car is going to mean to the Teamsters. You can see, all of a sudden, that’s going to be a massive war. Those jobs are going to go away.

GamesBeat: Did you know that you just described the theme for the next Call of Duty game?

Bushnell: I did not. But it should be. Anyway, what the book is going to do is talk about all the jobs that are created because of technology and the life that we can live. It’s hopefully going to be aspirational and enthusiastic. I want you to all buy several copies, because they’re actually good for breakfast.

GamesBeat: A lot of people approach you with ideas. How do you filter them? That’s the kind of job that a lot of people in this room probably have to do as well.

Bushnell: I’m always looking for disruptive innovation, not evolutionary innovation. Most of the stuff I see is evolutionary — pedestrian, sophomoric. I tend to not like that. I like to get involved with things that are truly revolutionary, that look like they’re going to be important.

Games, more than almost any other thing — games have a slightly longer life, in most cases, than movies. The half-life of a typical game, a really good game, is six months to a year. Exceptions are World of Warcraft and a few things like that. So what you want to do is find threads that have sustainability.

The mobile space right now, to me, is very noisy. I’m always looking for the mass reset. There’s a reset coming around every four to five years. The next reset is clearly AR or VR. I have a little wager on each one. My gut actually says that AR is going to be more important. VR has some wonderful spaces in the public space world. AR is going to take over the game world.

Above: Nolan Bushnell, founder of Atari, at GamesBeat Summit.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: I believe your family helps you with scouting this out.

Bushnell: As I say, I have eight children. They have six companies. They’re so good at what they do. They’re very dismissive of me. Which is good. Then I come up with some new stuff, and the minute I show them something that’s cool, they immediately think it was their idea. It’s just not fair.

GamesBeat: You get out a lot, though. You go to a lot of meetups.

Bushnell: Yeah. Right now, a college degree is very imprecise. I find that hiring strictly for passion and enthusiasm almost trumps formal education. I’m looking for people who are self-taught. I’m a massively passionate person about Unity. It’s such a great tool for us in so many ways. Today you can find some of the best talent in the meetups, among the people who are spending nights and weekends on their passion for games while they’re flipping hamburgers at McDonald’s.

Augmented reality gaming glasses startup CastAR has raised $15 million in funding from Android creator Andy Rubin.

The money from Rubin’s Playground Global investment firm brings a variety of benefits, including office space and technical know-how, said David Henkel-Wallace, the chief executive of Mountain View, Calif.-based CastAR, in an interview with GamesBeat.

CastAR has a lot of competition, from Google (which might one day create a new version of its Google Glass project) to Magic Leap, an augmented reality company in Florida with a lot of funding from Google. It will also likely compete with virtual reality companies (which provide goggles that are more immersive because they put you inside virtual worlds) like Facebook’s Oculus VR. But Rubin’s investment brings a very important ally into CastAR’s camp, as Rubin has a lot of money as well as a ton of connections in the tech world.

“One thing you look for investors is what kind of network they have,” Henkel-Wallace said. “It’s really a different kind of firm. They’re very focused on hardware businesses, and they have a model where they’re kind of an incubator. We just closed this deal and we’re already finding them useful.”

Above: CastAR wand

Image Credit: CastAR

CastAR was born as Technical Illusions in the greater Seattle area. It was started as a research project by Valve technologists Jeri Ellsworth and Rick Johnson to build augmented-reality glasses, or ones that can overlay animations and other imagery on top of the real world. Valve decided not to pursue the project, so Ellsworth and Johnson spun out as Technical Illusions. They raised $1 million in funding on Kickstarter in November 2013. Now they’ve moved to Silicon Valley and renamed the company as CastAR.

The CastAR glasses can project 3D holographic images in front of your eyes so that you can either feel like you’re seeing a virtual layer on top of the real world, or you can feel like you’re immersed inside a game world. It works with glasses and a reflective sheet-like material called “retro-reflective.” While you could theoretically use the reflective sheets to animate an entire room, CastAR has decided to focus on using smaller sheets for tabletop gaming.

This week, I talked with Henkel-Wallace in San Francisco and got a fresh demo with a prototype of the glasses. In a demo inspired by the old Marble Madness game, I was once again able to move around a marble through a landscape by tilting my head. I found it very easy to control things in the virtual world, but I could also see everything happening around me the because the glasses don’t obstruct your view of the real world. The imagery was quite sharp.

I also used a “wand” with the glasses to play a Jenga game. I used the wand to slice the bricks.

“We thought Jenga would be more fun with a lightsaber,” Henkel-Wallace said. “This is what we mean by fun. We forget the pleasure of frivolity. My girlfriend’s kids stand on the table when they play. We want to go back to fun.”

I also was able to look at a chess game that resembled the battle chess game in the original Star Wars movie. I could touch creatures with the wand and knock them off the table into a lava pool below. The graphics were crisp, and the field of view had no limitations, in contrast to Microsoft’s HoloLens holographic glasses, which have a more limited 20-degree field of view.

The new round of funding will be used to drive forward business and continue product development efforts as the company looks to drive adoption among tabletop and interactive game developers. Henkel-Wallace said you can imagine a tabletop battle where part of the battlefield is occluded by “fog of war” because your troops haven’t discovered an area yet. CastAR is also focusing its attention on attracting engineering, business, and design talent as it works towards a 2016 commercial launch.

“Among all the confusion about what separates AR from VR, what’s lost is fun,” said Henkel-Wallace. “People want a simple, accessible, fun solution that they can just pick up and play with their friends, without dealing with a bulky, uncomfortable headset, much less being tethered to a big computer. Our goal is to see CastAR on store shelves across North America, aligned with some recognizable brands in tabletop and interactive gaming. Playground’s support will help us get there.”

The company has just 11 people, but it plans to hire more now that it has funding.

“I was really intrigued by David, Jeri, and Rick’s approach to tackling the problem of how to drive mainstream adoption of AR,” said Rubin, the former Google executive and now managing director at Playground Global, in a statement. “They’re the only company I found to be simplifying the utility and application of augmented and virtual reality technology into a fun, accessible, and portable system that will wow kids and adults alike.”

Henkel-Wallace said that the pricing isn’t available yet, but it will be targeted at consumers.

“A $1,000 gaming PC to go with your lenses isn’t a consumer product,” Henkel-Wallace said.

Above: CastAR demo, visualized to show what you see with the augmented reality glasses.

Image Credit: CastAR

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CastAR is postponing the launch of its augmented reality glasses, but it is also doing something unusual. The startup is returning all of the $1 million in pledged money from its Kickstarter crowdfunding campaign to its supporters.

The company says it’s the right thing to do, even though it isn’t obligated to return the money. But CastAR still wants the goodwill of its early supporters, and it can do this because it recently raised $15 million in venture money from Playground Global, an investment fund run by Android creator Andy Rubin. CastAR still has ambitions to make a big splash in augmented reality, which tech advisor Digi-Capital forecasts will be a $120 billion market by 2020.

David Henkel-Wallace, the chief executive of Mountain View, Calif.-based CastAR, said in an interview with GamesBeat that the company decided to postpone shipments of a prototype product for the development community, which also included many non-developer consumers. Those Kickstarter supporters will get their money back and also receive a free pair of CastAR glasses when the full product is ready, sometime in 2017. All told, the supporters number about 3,000.

“We will give back exactly what our backers gave us and free glasses as well,” Henkel-Wallace said. “And we will thank them for their support. We don’t want people to feel ill-used. We are super-grateful. They committed their funds. We could have stuck to the letter of the law. We want their support.”

Some Kickstarter campaigns have gone sour.

CastAR has a lot of competition, such as Google (which might one day create a new version of its Google Glass project) or Magic Leap, an augmented reality company in Florida with a lot of funding from Google. It will also likely compete with virtual reality companies (which provide goggles that are more immersive because they put you inside virtual worlds) like Facebook’s Oculus VR. But Rubin’s investment gave the company a lot of options, Henkel-Wallace said.

Above: CastAR wand

Image Credit: CastAR

CastAR was born as Technical Illusions in the greater Seattle area. It was started as a research project by Valve technologists Jeri Ellsworth and Rick Johnson to build augmented-reality glasses, or ones that can overlay animations and other imagery on top of the real world. Valve decided not to pursue the project, so Ellsworth and Johnson spun out as Technical Illusions. They raised $1 million in funding on Kickstarter in November 2013. Now they’ve moved to Silicon Valley and renamed the company as CastAR.

The CastAR glasses can project 3D holographic images in front of your eyes so that you can either feel like you’re seeing a virtual layer on top of the real world or feel like you’re immersed inside a game world. It works with glasses and a reflective sheet-like material called “retro-reflective.” While you could theoretically use the reflective sheets to animate an entire room, CastAR has decided to focus on using smaller sheets for tabletop gaming.

CastAR has shown off games where you can roll a virtual marble over an aninmated tabletop, play a game of battle chess that resembles a scene from Star Wars, and use a wand to play virtual Jenga.

“We are shifting out of Kickstarter mode into a more professional mode,” Henkel-Wallace said. “Not everyone manages that properly. We are doing this out of a position of strength. We still plan to ship a consumer product in 2017. That’s different from the original Kickstarter timeline.”

In a message to supporters, Johnson wrote, “Kickstarting CastAR provided us with the foundation that Jeri and I used to begin building both a company and the CastAR product. During the last two years we’ve learned a lot about the market we are in, how to put a business together, and the expectations set forth by you, our backers.”

Johnson said the team debated what to do. On the one hand, many backers want a product with a full set of software. That won’t be ready for some time in the future, as it has a “much more complex development cycle.”

On the other hand, the Kickstarter campaign was aimed at creating hardware suited for developers, so they could start working on software. To resolve the debate, the team decided to gve everyone who was expecting CastAR hardware a free pair of consumer glasses at the future launch, and it will reimburse people for their Kickstarter pledges.

“To further express our appreciation, we’d also like to send you a couple small thank you gifts designed just for you, our backers,” Johnson wrote. “We wear our Kickstarter success as a badge of honor, and we hope you will too….Jeri and I want to sincerely thank you for embarking on this journey with us. The entire process has been very humbling and we have especially enjoyed interacting with all of you. At the start of any journey it is not always exactly clear where you might end up.”

Henkel-Wallace said that the 2017 final product will benefit from miniaturization and cost reductions, thanks to the benefit of Moore’s Law. Thanks to its recent funding, CastAR has grown from 11 employees to 20.

Above: CastAR demo, visualized to show what you see with the augmented reality glasses.

Image Credit: CastAR

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Jeri Ellsworth and Rick Johnson have been toiling away at augmented reality for years at their startup, CastAR. Their ambition to make a fun AR product has been cooking for a while, and they’re taking a very different approach to the next-generation gaming platform.

And given Ellsworth’s background as an underdog, it’s no surprise she’s trying to think different. Ellsworth taught herself how to design chips and became known in 2004 for creating a Commodore 64 system on a chip with a joystick. She went on to become a hardware hacker and was part of a team of researchers at Valve, the maker of the Half-Life games and the new SteamVR virtual reality technology.

Ellsworth left Valve in 2013 to cofound Technical Illusions with fellow Valve technologist Rick Johnson to create the CastAR system. They raised money on Kickstarter and eventually moved from Seattle to Mountain View, Calif., in 2014 with their team. CastAR raised $15 million last August, and it is preparing to ship its first generation product.

Ellsworth wants to create a new kind of gaming experience with augmented reality glasses. The CastAR glasses can overlay animations and other imagery on top of the real world. And for Ellsworth, the focus is on fun for the mass market, not making a really expensive toy that you never play with. She spoke at our GamesBeat Summit 2016 event with Will Mason, cofounder and editor-in-chief of UploadVR.

Here’s an edited transcript of their conversation.

Above: Jeri Ellsworth of CastAR and Will Mason of UploadVR.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: Today, I want to dive in a bit on mixed reality’s role in the big future we keep hearing about. It seems today you can’t throw a stone in Silicon Valley without hitting someone who wants to talk about AR and VR. Jeri, before we get into the story of CastAR, can you talk about how you got into mixed reality in general? You were working at Valve on VR in 2012, right?

Jeri Ellsworth: I have an interesting background. I’ve been fearless as far as getting into areas I don’t know about. I dropped out of high school and started building and racing quarter-mile dirt track cars with everyone telling me I couldn’t do it.

In the ‘90s, the computer store business was booming. [In 1995] I opened a computer store. I was so poor at the time that I lived out of the back of the store, but I grew it into more and more locations. Eventually, I had five. Then, that market fell apart. In 2000, I thought I’d always enjoyed electronics, so I taught myself chip design. I bought a bunch of books, found some mentors, and started learning about [very-large-scale integration] design.

I came down to Silicon Valley. That was my first introduction to the culture here, which was eye-opening coming from rural Oregon. It was important to get to events like this and start networking if I was going to be discovered as a self-taught chip designer, and so I’d go to events and shake everyone’s hand and show them some circuit boards with [field-programmable gate arrays (FPGAs)] on them. “Look at this video controller I built. Here’s a sound controller. This one takes joystick input.” From there, I slowly launched my career in the early 2000s.

What got me into games and got me closer to working at Valve was, I had done some blog posts about reverse-engineering old 8-bit computers and putting them in these FPGAs. I’d reverse-engineered the old Commodore 64 and stuck it into a chip and blogged about it. A toy company contacted me and said, “We want to make a toy where we have 30 retro video games built into it.” At this point, I’d only done very small designs on bigger teams. They asked me if I could do the whole thing. I took a deep breath and said I could. I’d never manufactured anything before, never done a full chip before. But it turned out well. It was a huge viral hit, and it put me on the map.

Above: Jeri Ellsworth recently spoke at GamesBeat Summit 2016.

Image Credit: Michael O'Donnell/VentureBeat

From there, I did a bunch of other toys and got really immersed in low-cost product design. My career afterward centered on customer-facing entertainment devices, hardware that kids could afford and adults could easily purchase. Some years went by until Valve was interested in expanding beyond the PC platform. They were concerned about the Windows platform remaining viable. They hired me as their first hardware person to put together a team and research other ways to get them off the PC platform and into the living room.

This was a dream job. It was magical. They gave me an unlimited budget. I could hire anyone I wanted. I split the research into three pieces. First, I’d get pure researchers. We’d get some maker types, people who are into building things. And then, we got some product people, which I fell into. We were given free rein to research whatever we wanted.

We went down some crazy paths. We had electrodes hooked to people’s heads trying to read their brain waves. We had galvanic skin response to read people’s emotions while they played games, and we fed that back into the games. We even ran electricity through people’s inner ears. We did this thing we called “the remote-controlled human,” where we’d push buttons and make people steer. But our main objective was, “How can we bring new gamers into the living room and attach them to the Steam platform?”

We splintered into some different areas of research. Some folks worked on the Steam Box. Some folks worked on the game controller. And then some of us worked on AR and VR. That’s where I got interested in mixed reality. We were doing a lot of AR experiments, and they were difficult. It was difficult at the time to put photons in the world and wrap them around plastic toys. But we were getting some of the early prototypes going.

It was quite different from the VR effort because this actually ties back to what the executives at the toy companies were always beating into my head. When it’s fun, it’s fun. Stop when it’s fun, and make sure it’s affordable. Looking at what we could do with AR, it hit a broad demographic. It was inclusive. Someone like my father could play a mixed-reality game with his grandkids. Whereas when I was looking at some of the VR stuff and hardcore gaming like the Steam Box, I could never see new game players coming in to that platform unless it’s something more approachable, more direct.

That was a long story, but that’s how I got to Valve. Valve didn’t want to proceed with their AR efforts, with the CastAR prototype, so Rick Johnson and I spun the company out of Valve, and here we are today.

Above: Jeri Ellsworth is a self-taught hardware designer and cofounder of CastAR.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: You guys emerged out of a Kickstarter, similar to how Oculus came to market. Oculus now has the resources of Facebook. HTC and Valve are established and so is Sony. As you’re trying to bring CastAR and mixed reality to the market, what are some of the strategies that you’re going to use as an underdog in this market?

Ellsworth: We’re trying to keep things simple. It goes back to the toy guys. Put the bare minimum in to make a fun experience. We see a lot of the other guys trying to go huge and grand, creating these huge walk-around, room-scale experiences. That’s not going to be very tractable in the living room with families. That’s one of our strategies. The core of our system is this game board, which is about three quarters of a meter on a side. We’re trying to pack as much experience as we can into this space and make it social and fun.

Always fun, always cost-effective, zero friction. Friction is another thing we’re focused on. Christmas day, when people get this for the holidays, we want them to unfold their game board, hit the power button, and be playing within minutes. We surveyed Xbox, Nintendo, all these game consoles. How long does it take to get to your first game? Some of them are terrible. It’s almost an hour for some of the game consoles. Even the handhelds, it’s as much as 15 minutes. We want to get a lot of traction in the marketplace by having a zero-friction experience. Hit the power button, slip the glasses on, and start playing.

Keep it social, too. Your friends come over, and you’re looking into the same space. You’re looking at each other. You can see each other. You don’t have to clear out your furniture and make a dedicated VR room. It’s right there.

GamesBeat: There’s been a lot of talk about the gap of disappointment that John Riccitiello mentioned. Things might not be adopted as quickly as some people might think. What are some of the ways you guys are looking to sustain success through that period?

Ellsworth: We’re constantly thinking about what other people have done, other companies, in the past. We look back at Nintendo a lot. They often don’t have the most cutting-edge technology, but they keep it fun and keep it simple. They focus on what counts. The black and white Game Boy went up against the color Atari Lynx. For a tech nerd like me, the Lynx was amazing. But the Game Boy was so much fun. It had Tetris. It had Mario. It ran for a really long time, even with its limitations.

We’re not trying to make a new tech gadget. We’re trying to make something that my dad can use, that a kid can use. That’s a natural type of experience. I’m a bit concerned that there’s this arms race in VR right now. Who has the most pixels? Who has the most expensive tower sitting next to their VR chair? You’re not going to reach hundreds of millions of users when you have to make that kind of investment. That’s why our price point is so critical and narrowing down to the game experience.

GamesBeat: From a macro perspective, there’s a bit of an issue of rhetoric within the industry. I’d love to get your opinion. How do you define the differences between AR, VR, and mixed reality? Do you think that, in the next five years or so, we’ll still be using those different terms?

Ellsworth: In the next three or four years, we’ll start to see a lot of merging of technologies. VR is the tip of the iceberg. There will be new display technology that will do AR and VR seamlessly, switching between them. Looking out a bit further, there are holographic displays in the prototype stage that don’t require eyewear. If you start projecting out five years, six years down the road, all the lines will be blurred. People will interact in these natural holographic experiences.

Whether it’s some kind of display that’s on a table and projecting holographic images or if it’s eyewear that I put on to add annotations to the world, it’s all going to blend together. This will come in time. Who knows what we’ll call it eventually?

Above: CastAR wants you to play tabletop games in mixed reality.

Image Credit: CastAR

GamesBeat: The word I keep hearing you say is “fun.” A lot of people talk about VR and AR in these platform-shift terms — “this is going to change everything.” Why is your focus on fun rather this whole world-changing dynamic everyone else talks about?

Ellsworth: When I take a look at VR experiences — what we were researching at Valve, what we see out there now — the first thing you see is, “Oh my God, I had this amazing experience riding a roller coaster; it’s great!” That’s what I look for. I’m a thrill seeker. I have that experience, and it’s fun in that instant. But then I put my VR headset away for months until something new comes along.

What we’re focusing on is how do we find sustained fun? How do we have an experience that you want to revisit every single day? You want to grab your CastAR system and check in on what your friends are doing or invite people over and have this prolonged game experience. That’s a more subtle experience. It’s not as intense.

That’s one of the things we discovered at Valve. When we were doing these experiments with gameplay, we were feeding people’s emotional states back into the game. If you give them super high intensity for prolonged period of times, it’s not as fun as something more mild. But if you survey folks as they leave the different game experiences, if you throw 5000 zombies at them and they die instantly, they have fun in that instant. If you give them a more subtle experience that goes through peaks and valleys, they engage longer and come back to it. That’s what we’re looking for. What are experiences that are natural and get people to come back?

Some of our core values — we look at everything. Do we want to have this type of tracking system in here? Is it going to work 100 percent of the time? Can my father pick up our wand controller and know how to poke at the game character and move him around? Could a five-year-old do that? Could anyone else do that? We want to make sure everything we put into it works seamlessly and isn’t confusing to the end user, especially when it comes to input.

Above: Jeri Ellsworth of CastAR on stage at GamesBeat Summit 2016.

Image Credit: Michael O'Donnell/VentureBeat

GamesBeat: When you’re building a system like that — obviously, it’s a brand new platform. When you have a new platform, you have to have content to keep people coming back to it. Whose responsibility is it to help in the creation of that content?

Ellsworth: Some of that, going forward, is going to have to be stimulated by us. We’re going to have to go out and commission some content. We have some internal research going on, which is going to feed into our developer network. We’re already working with developers bringing their content over.

We had a game team with a little green army men game that they wanted to port to our platform. It took them a day or so to port it over, build some UI around it, and get it working on the table. It was just amazing to watch this small game development team port their game, an Xbox or Steam type of game, to the platform. New game mechanics that they didn’t expect just emerged out of the blue.

When they first ported it over and you could play solo, it was about the same as playing it on an Xbox or whatever. You could look around these little buildings as your character ran around. But adding more players — two, four, five — the gameplay totally changed. It was hard to pry the headset off of folks. If you’re sitting over there and I know my character is short enough that you can’t see him, but I can peer over that building and see your character, I can run around and snipe him. The alliances that form around the table are social and fun. A lot of content may be familiar but unique.

GamesBeat: Do you think the advantage of mixed reality, especially in terms of games, is the ability to have that kind of transformative social experience in a way that you might not necessarily have with a VR headset?

Ellsworth: Right. In the first generations, we want to touch hundreds of millions of users. We want to be that approachable. I don’t think it’s practical for most people to clear out their furniture and set up a VR room. Although personally, I would.

Above: CastAR also involves a wand-like controller.

Image Credit: CastAR

More information:

CastAR is a high-profile augmented reality startup, and now it’s kicking into high gear. The maker of the upcoming CastAR AR glasses has recruited former LucasArts chief Darrell Rodriguez as its chief executive. It has also appointed former Disney executive Steve Parkis as its president and chief operating officer.

Above: Darrell Rodriguez, CEO of CastAR.

Image Credit: CastAR

In doing so, the Palo Alto, Calif.-based company is strengthening its management team, which still includes cofounders Jeri Ellsworth and Rick Johnson. CastAR refers to its new leaders as “world-class executives” who will help guide it to the future of “mixed reality entertainment.” CastAR’s glasses let you see imagery overlaid on the real world, and it’s ideal for a new kind of tabletop gaming.

“Darrell and Steve not only share our passion for pushing the boundaries of what’s possible in mixed reality gaming and entertainment, they are the one-two punch we have been looking for to drive CastAR into our consumer launch and beyond,” said Ellsworth, in a statement. “Together with our great partners at Playground Global, we’re poised to deliver a groundbreaking player experience.”

In over two decades as an interactive and entertainment media executive, Rodriguez has run some very big creative enterprises. He was president and chief operating officer of LucasArts, the former game company created by Star Wars creator George Lucas. Rodriguez also served in roles at Trendy Entertainment and International Game Technology.

Parkis has led teams at The Walt Disney Company, Zynga, and Storm8, producing globally recognized, award-winning and commercially significant products based on franchises like Toy Story, The Incredibles, Cars, Pirates of the Caribbean, CityVille, and FarmVille. He has been creating tech, entertainment, and interactive stories for 15 years. Parks will focus on further building out the team, platform, product execution and marketing strategy to bring CastAR to consumers.

“CastAR is primed to make mixed reality the place where the next breakthrough in entertainment will happen.” said Rodriguez, in a statement. “Steve and my experiences in digital entertainment, combined with the vision of Jeri and Rick, leave us both incredibly excited to drive the future of gaming through our first to market technology.”

CastAR was born as Technical Illusions in the greater Seattle area. It was started as a research project by Valve technologists Ellsworth and Johnson to build augmented reality glasses, which can overlay animations and other imagery on top of the real world. CastAR’s previous CEO was David Henkel-Wallace. A year ago, CastAR raised $15 million in a round of funding led by Android creator Andy Rubin’s Playground Global investment firm.

Augmented reality startup CastAR is opening a new mixed reality studio in Salt Lake City today, with talent recruited from the former developers of Disney’s Infinity toy-game franchise.

Disney closed its Avalanche Studios division in Salt Lake City in May after it decided to end its Disney Infinity toys-to-life products because of slumping sales. But Palo Alto, Calif.-based CastAR saw that as an opportunity and it has hired a number of the developers who previously worked on Infinity.

That will more than double the size of the CastAR development team, but it’s not clear yet exactly how many people CastAR is hiring. That’s the first big move since CastAR recruited former LucasArts chief Darrell Rodriguez as CEO and former Disney executive Steve Parkis as president and chief operating officer last month.

Overall, CastAR now employs more than 70 people. At its peak, Avalanche Software was about 240 people under Disney. So that leaves a lot of talented people still on the market in Salt Lake City.

CastAR was born as Technical Illusions in the greater Seattle area. It was started as a research project by Valve technologists Ellsworth and Johnson to build augmented reality glasses, which can overlay animations and other imagery on top of the real world.

“Our new CastAR SLC team has creatively-inspired talent that has delivered at the highest levels of quality. We’re excited to have them join us in creating a new generation of gaming through mixed reality experiences,” said Parkis, in a statement. “With their experience in bringing massive franchises to life through breakthrough interactive design, the addition of this team is our next bold step in launching a dynamic platform that will bring awe-inspiring mixed reality to households.”

Disney’s former Avalanche team specialized in merging the physical world with the digital. And that’s what CastAR wants to do with its augmented reality product, which will have tabletop games and other kinds of mixed reality entertainment.

Mixed-reality startup CastAR continues to beef up its management team with the addition of Peter Dille, the former head of marketing for the Sony PlayStation business in the U.S., as its chief marketing officer.

Above: Peter Dille is the new CMO of CastAR.

Image Credit: CastAR

The Palo Alto, Calif.-based company is making an augmented reality entertainment system with glasses that allow you to see animated images on top of the real world. CastAR is specializing in such apps as table-top AR games, and it recently hired former LucasArts chief Darrell Rodriguez as CEO.

In addition to Dille, the company also hired Mel Heydari as head of talent and Arnie Sen as vice president of engineering.

CastAR plans to launch its mixed reality gaming and entertainment platform in 2017.

“We continue to build out our executive ranks with industry all-stars,” said Rodriguez, in a statement. “We’re building something truly special at CastAR, and Peter, Mel and Arnie are the type of executives that will take our vision of a mixed reality platform in every household and make it a reality.”

Dille comes to CastAR with over 20 years of experience leading marketing strategy for interactive entertainment companies. He was most recently CMO of mobile advertising technology company Tapjoy. And he was senior vice president at Sony Computer Entertainment America, where he was instrumental in the launch of both the original PlayStation and the PlayStation 3. Peter was also a leader in the business and operations side of the PlayStation Network.

Heydari was recently the head of talent at TiVo, where he helped develop key protocols and talent acquisition programs. Sen joins the team from Immersion, where he served as vice president of engineering operations.

When CastAR’s head-mounted display launches, it’s going to need content. And the company is taking steps to ensure that happens.

CastAR revealed today that it has hired former Eat Sleep Play developers to work at its first-party studio in Salt Lake City, Utah. Eat Sleep Play was responsible for the PlayStation 3 Twisted Metal in 2012 as well as recent mobile games like Running With Friends and Ice Age: Arctic Blast. Industry veteran Scott Campbell, who founded Eat Sleep Play, is bringing an undisclosed number of his team members with him to take on the challenge of AR game development.

CastAR is a pair of glasses that is capable of projecting digital images onto the real world. It is similar to systems like Microsoft’s HoloLens and the Magic Leap. CastAR launches in 2017.

“Eat Sleep Play had a 20-year track record of pleasing gamers by contributing to countless top rated console and mobile franchises, from Twisted Metal to Warhawk and more and we are thrilled to have their experienced developers join the CastAR Salt Lake City team,” CastAR president and chief operating officer Steve Parkis said in a statement. “The continued expansion of our development staff brings together an all-star content creation team focused on developing augmented reality experiences and increases our momentum towards launching the first mass-market augmented reality gaming platform.”

This is the latest move from CastAR. The company previously hired former Disney Infinity developers from Avalanche after The Walt Disney Company shut that game down. CastAR also brought in former PlayStation marketing boss Peter Dille as its chief marketing officer and ex-LucasArts chief Darrell Rodriguez as its CEO.

CastAR has a lot to prove, but with all these pieces falling into place, CastAR is positioning itself for a major launch in 2017.

CES 2017, the big tech trade show in Las Vegas last week, was loaded with augmented reality smartglasses, which layer digital animations and information on top of the real world. They promise us wonderful connections between the digital and physical worlds, and games where we can chase cartoon characters through our own furniture.

Mainstream venture capitalists pumped up startups in virtual and augmented reality in the third quarter, with a record $2.3 billion invested in the last 12 months, according to tech advisor Digi-Capital. And the company predicts that AR will be a $90 billion market by 2020.

I talked about this great promise of AR on a panel at CES with Jeri Ellsworth, cofounder of CastAR, and Nick Beliaeff, vice president of production at Spin Master Studios, a toy company that recently launched its Air Hogs Connect: Mission Drone game.

Here’s an edited transcript of our panel.

Nick Beliaeff: I’m the VP of production at Spin Master Studios. That’s a division of Spin Master, which is a 20-plus-year-old toy company. My job is to bridge the gap between physical play patterns and digital play patterns as connected devices become more accessible to the kids of today. They’ve stopped playing with toys, because it’s such a compelling medium. It’s my job to re-engage them and go from there.

One thing we love about AR is how it’s such a natural pair with physical play. We’ve been investing in it since 2014. We released our first product late last year, called Mission Drone, where you transform your room into an AR sci-fi universe and fly a real physical drone while you fly rescue missions and battle aliens. Our next one, which we’re showing over at Luxor, is Nitro Boost, with multiplayer RC car racing on different circuits. What’s cool about AR and connected toys is we can do stuff with a physical RC car crashing into an AR virtual car and spinning out. There’s a certain magic to the experiential nature of AR. We’re huge fans.

Above: Air Hogs Connect: Mission Drone

Image Credit: Spin Master

Jeri Ellsworth: I’m an inventor. I’ve been an inventor my entire life, and also an entrepreneur. I got my start building and driving race cars in my first career. I opened up retail computer stores after that, at the height of the internet boom in 1995. Eventually I moved into electrical engineering and product design, and toy design as well, which is a very fun field.

I ended up at Valve Software running their hardware department, putting the team together that created the HTC Vive. We were tasked with exploring how to bring new gamers into the Steam platform. Just recently, in the last few years, I founded a company called CastAR, where we’re making AR glasses that allow you to blend virtual graphics with real-world objects on your table.

GB: There are predictions from Digi-Capital, a tech advisor, that AR is going to be a $90 billion market by 2020. Three times the size of virtual reality, goes their prediction. They’re very bullish on AR. I wonder what, as far as the backdrop goes, or how far back the thinking around AR goes in history — what sort of science fiction dreams inspired you to think about AR and get into AR?

Beliaeff: The one that spurred us at the toy company came from the head of our Air Hogs division, the RC division. He’s also a very big Star Trek fan. He wanted a holodeck experience with his toys. That’s where Mission Drone came from.

Ellsworth: I’m another huge Star Trek nerd, and Star Wars of course. When I saw holo-chess as a kid, I didn’t know what the gameplay was, but I wanted to experience that someday. All the sci-fi didn’t necessarily push me directly to AR, though. It was all the combined inputs and outputs and the blending of your digital experience. That excites me. Where are we going in the next 10 years? It’s going to be a blend of all our digital content into the real world in a seamless way. Science fiction predicts that for us.

Above: CastAR wants you to play tabletop games in mixed reality.

Image Credit: CastAR

GB: We have that very bullish forecast right now, but that wasn’t always the case. Where do you think we got this turn for optimism about AR?

Beliaeff: There are a few different touch points. Some things you don’t necessarily think of as AR that are technically AR, like the weather person doing the weather in front of a green screen. It’s been fairly pervasive, but it just hasn’t been labeled. There’s a bit more awareness there.

Meanwhile, the technology you guys all have in your pockets or in your laps — your smartphones and tablets and even PCs — have gotten powerful enough that there’s enough horsepower to run this technology. The software has also advanced a lot as well. SLAM, simultaneous localization and mapping, is getting more accessible. As hardware and software mature, awareness is driven by wonderful things like Pokemon Go. That’s not the perfect implementation of AR, but it drove awareness like nothing else.

CastAR was one of the most ambitious augmented reality game companies in the business. But it looks like it has shut down amid one of the most obvious problems in the fledgling industry: It was too early, and the challenges it faced were incredible.

CastAR failed to raise a new round of funding and shut down this week, according to a report from game news site Polygon. That spelled the end to a years-long project by former Valve employees Jeri Ellsworth and Rick Johnson to create a unique AR tabletop gaming platform, one that wanted to deliver the next step in a magical kind of play.

You could say it was a victim of the warned “gap of disappointment” that AR and its cousin, virtual reality, are facing as reality sets in. CastAR, which raised $1 million in a Kickstarter crowdfunding campaign in 2013, is only one player in what is expected to be a vast market with many different companies, but its failure to raise a new round in time shows how difficult navigating the gap will be.

Above: Rick Johnson and Jeri Ellsworth of Technical Illusions, creator of CastAR

Image Credit: Dean Takahashi

The company was born in 2013 the Woodinville, Washington, home of Johnson. He was a former software engineer at Valve. Ellsworth was a hardware designer who was looking for a new way to play games by projecting animated images into a realistic backdrop. They had tried to make their tech work at Valve, but that company decided to focus on virtual reality instead. Still, the optimists were abundant. Tech adviser Digi-Capital estimated early on that AR could be a $120 billion market by 2020.

CastAR proposed creating a headset that could overlay animated images in front of your eyes as you looked at a tabletop with a special reflective material. It was restricted in terms of what it could show you in a given space, but Johnson and Ellsworth believed it would work great for tabletop games.

CastAR raced ahead of others, raising $15 million from Android creator Andy Rubin’s Playground Global hardware accelerator. The company moved from Washington to Silicon Valley and recruited new executives such as former LucasArts chief Darrell Rodriguez, former Disney executive Steve Parkis, and ex-PlayStation marketer Peter Dille. The company also hired a team of software developers from Avalanche Software in Utah to develop AR games.

Above: Jeri Ellsworth of CastAR onstage at GamesBeat Summit 2016.

Image Credit: Michael O'Donnell/VentureBeat

It’s still not clear exactly what happened, as Ellsworth hasn’t made any public comments. But it was clear that CastAR had a technology issue and a cost problem. On the cost side, it might have been able to create a $250 solution for tabletop AR gaming, but it was replacing tabletop card and board games that might have cost $25. It’s like the internet of things pet feeders, which cost $250 and try to replace, unsuccessfully, the $2.50 pet bowl.

Polygon reported CastAR shut down and laid off 70 employees because the company couldn’t find a new investor. Based on what we know, CastAR’s fate isn’t cast in stone just yet. One of the outcomes could be that someone could buy the assets. At least one developer, who preferred to remain anonymous, was told that the company is trying to sell its technology.

Ellsworth and Johnson spun out of Valve and they raised $1 million in a Kickstarter crowdfunding campaign in November 2013. I visited them early on, when the AR headset they were envisioning was a bulky prototype. Johnson’s home was impressive, filled to the brim with pinball machines and hardware prototypes that used a wand to make things happen in AR.

The aspirations of that time showed how far the tech had to go. It would be several generations of hardware before the company had something that it could place on the heads of consumers that was comfortable, lightweight, and dazzling when it came to animated graphics quality.

“They were making progress on launch titles,” said Kevin Krewell, analyst at Tirias Research. “The experience, even using a reflective mat was very good. The hardware was going to be much cheaper than most AR. I also saw one demo where a guy covered an entire inflatable dome with the reflective material and it worked well.”

Above: Early prototypes of CastAR wands

Image Credit: Dean Takahashi

The obstacles didn’t deter Ellsworth or Johnson, who were staunch fans of science fiction and wanted to believe that serving early adopters would help them reach their eventual goal. The growth of events such as Augmented World Expo, which drew 4,700 people this month in Santa Clara, California, showed that a big industry with hundreds of companies believed the same things as Ellsworth and Johnson did.

“You can take a physical, tangible object, like a figurine, and put it down on the table,” Ellsworth said in a panel that I moderated at the Consumer Electronics Show in January. “Then the essence of the character jumps out to battle and level up. What’s interesting is that when you start having those types of experiences, this little plastic toy suddenly becomes mine. It has all these markers of the experiences I’ve had. I’m more connected to this physical thing than if it were just a digital object on a screen. The whole toys-to-life phenomenon is going to be taken to another level. Each of your little gadgets or toys will be unique to you, because it’ll be persistent.”

But AR experts such as Jesse Schell, head of the Entertainment Technology Center at Carnegie Mellon University, recently warned that AR would have big problems to overcome as far out as 2025. As he noted about Google’s original Google Glass project, AR glasses “look stupid,” and few people would willingly wear them on their heads. To do so, they would have to completely ignore the fashion sense people normally have about things like sunglasses.

On top of that — though it was less a problem with CastAR’s focus on tabletop games — AR makes people uncomfortable because it means you’ll be under surveillance by people wearing the headsets with cameras. And to Schell, that means there will be social obstacles on top of technological obstacles that hold the market back.

Above: Rick Johnson, cofounder and chief software engineer of CastAR.

Image Credit: Dean Takahashi

In the meantime, it was clear that it was going to take a while just to get the technology right. The bulky headsets are the norm for now, and some companies such as Vuforia and Microsoft believe that AR will work best in enterprise markets, where the customers can afford to pay thousands of dollars for a solution. CastAR was simply early in choosing to focus on the consumer market, and it didn’t really have a way to survive the lean years, as some companies like Playful have proposed in terms of surviving the lean years of the cousin market, VR.

Schell also pointed out that AR needed more killer applications. Niantic’s Pokémon Go  took off in 2016 as the first major AR mobile game, earning $1 billion within a year. But veteran game investor Mitch Lasky warned a while ago that the success of Niantic’s game was likely not reproducible, and that it was due to pent-up demand for Pokémon mobile games.

As long as CastAR hit its milestones and convinced investors it was on the right track, it should have been able to raise money. After all, investors poured $2.3 billion into AR investments in 2016, according to Digi-Capital. But somewhere along the way, the investors must have gotten cold feet, and others failed to step in to keep it all going. And other AR rivals such as Magic Leap and VR companies may have snared those investors instead with even more grandiose visions.

It’s not the end of AR games, but the tale of CastAR is certainly a cautionary tale.

Above: CastAR demo, visualized to show what you see with the augmented reality glasses.

Image Credit: CastAR

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