Wireless Technologies

Latin America could be a serious VR contender

At just over 120,000 people, Mendoza is not a large place and most well-known for its wine. Despite its relative obscurity, this Argentinian city located just a 45-minute flight from Santiago de Chile has its sights set on growing its reputation for Virtual Reality (VR) development. Companies like Inamika Interactive have already pioneered the use of VR in the city, developing a VR tour of the Museum of Mendoza’s dinosaur exhibit. It is hoping to capitalise on this success to drive more VR business in the future and it is not alone.

Mexico is also throwing its hat in the VR ring, with Eon Reality launching the first Virtual Reality centre in Latin America in Atizapán in April. It is early days yet, but, given the growing tech talent in the region, Latin America has the potential to innovate in this emerging field.

A report by MarketsandMarkets estimates that the global VR technology sector is likely to reach $15.89 billion by 2020. Vinitha Prameela, an analyst at MarketsandMarkets said that the VR market for Latin America is expected to grow at a CAGR of 49.61% between 2016 and 2022.

While Latin America is traditionally about a year to 18 months behind the United States and Europe in adoption of new technologies, many believe that it could play an important role in the development of VR solutions. There are already a number of examples in the field.


Innovative projects

Six years ago, Founder and President of Inamika Interactive, Rodolofo Giro was honoured with a Sadosky Foundation award for the development of a VR school, an alternative to video conferencing systems. From teaching CPR to learning how to drive a forklift or safely perform mining operations, Inamika Interactive is focused primarily on the use of VR for training purposes. “We want to help people with this technology, to build simulators for risky tasks. If we save a life or the hand of an operator with our simulations, then we know we have done our job,” Giro said.

Other projects include an art installation and a VR component to the proposed “Mafaldaland”, the Argentinian equivalent of Disneyland featuring Quino’s iconic cartoon character Mafalda, which Giro describes as the Argentinian Mickey Mouse.

Healthcare applications like the Argentinian app for treating phobias, as well as emerging projects like Argentina’s Vrtify for broadcasting musical events with immersive experiences, are also gaining ground, while simulation applications in industries such as oil extraction are under development.

Latin American-born companies are having an impact on US developments, too. Martin Repetto describes Voxelus, a VR content creation platform and marketplace which is headquartered in Argentina with development offices in Buenos Aires and Rosario, as an American company despite its Argentinian roots. Voxelus’ development team comprises of nine developers in Argentina. Voxelus CEO Repetto is quick to point out the financial benefits of using talent from Latin America. “We pay for nine people what you would pay for three people in the US or Europe,” he said.

In many ways the political upheavals and economic turmoil that have characterised Latin America of late have also translated into increased price competitiveness for IT services, something that, together with impressive talent resources, have made the region increasingly able to compete with the likes of India and the Philippines in terms of value rather than pure price. The region has made significant inroads into the global services industry with three Latin American countries featuring in the top 10 of the 2016 A.T. Kearney Global Services Location Index: Brazil (4), Mexico (8) and Chile (9). Costa Rica and Colombia make the top 20.

“Ninety percent of what Latin America produces is software as a service for video games and I see that trend continuing into VR. I definitively see game developers here in Argentina, Brazil, Uruguay, shifting to VR studios and providing product as a service, bandwidth, time and materials, and of course software as a service to companies in the US and Europe that are looking to build such products. Since VR is new and you want to invest but you don’t want to over-invest, it is good to outsource,” Repetto said.


Talent could be competitive advantage

This track record of servicing North American and European markets with software exports and IT services means that the region is ideally positioned to also provide similar services to the emerging VR industry. In particular, Latin America’s history of serving the US and European gaming market – especially in social and mobile games – positions it well. In 2009/ 2010, when mobile and social games started becoming mainstream, there was a surge in Latin American development with studios creating products outsourced for US and Europe.

Repetto believes that VR will follow the same trend. He said: “2016 is the wake-up call for VR in Latin America, but 2017 and 2018 is when we are going to see the really cool products and services emerge from [the region],” Repetto said. “Next year is when we develop for Latin America and 2018 is when we see adoption.”

In fact, for Repetto Latin America’s competitive advantage in VR is about more than just price competitiveness; it is all about talent. He believes that Latin America’s multidisciplinary developers offer the region a leg up over the US and Europe. “We are more generalists than specialists. And that is good for VR because VR is a combination of a lot of art and immersive presence design with programming,” he said. A Unity developer in Latin America would also probably know Photoshop and grading software as well as how to code. “The teams that I built in Europe or in the US are more specific. You need five guys to do what you can do here in Latin America with two.”

When Inamika’s Giro first built his team of VR developers, he drew on a pool of people with some skills in related fields, such as designers or programmers from video game development. Latin America also has solid skills in audiovisual/ multimedia design, which is needed to build VR and which he believes is one of the strengths of the region.

VR researcher Sarah Jones of Coventry University’s School of Media and the Performing Arts, who is ranked 72nd in the world as a VR influencer, said that EON’s announcement that they are moving into Mexico and the number of VR meet ups currently happening in Latin America are important because that is where the talent comes from.

“As an emerging technological space, we are seeing the best work coming from community groups who work together to fix problems and share best practices,” she said. “Although VR has been around for years, the recent developments and accessibility is moving at such a fast pace that it is hard to keep up with the skill set. You are constantly working off betas and fixing as you go.” She describes this as the main challenge and says that it is universal and not a problem defined by geography.


Challenges remain

Luis Calabria, Co-Founder and Director of Uruguayan VR company SimDesign, adds that in Latin America developers are accustomed to working with limited resources. “This increases creativity in trying to solve complex problems at a low cost. Undoubtedly the entertainment and advertising industries in VR are going to benefit from these creative programmers and designers that we have in Latin America.”

Repetto does recognise that there will still be a learning curve as demand for VR talent increases. Talent development is core to the region’s VR dreams and some countries are already investing. EON Reality’s Interactive Digital Centre (IDC) in Mexico is focused on building VR and Augmented Reality capacity in the country. The IDC is designed to produce VR and AR content as well as play a role in training future AR and VR professionals through improved knowledge transfer. It also seeks to create high quality jobs, and build a bridge to employment for students in the local EON Entrepreneur School. It is expected to open in mid-September this year.

In addition to the need to grow more VR talent, hardware costs may be the most significant challenge. It can even be difficult to secure the VR hardware in Latin America at all because of import restrictions and duties in certain countries and unrealistic price points in others. In fact, Samsung Gear VR only launched in Argentina last week.

Jones says widespread adoption is a core challenge. At the basic entry level, for mass adoption, there are 360 degree films and limited VR games. “This needs powerful phones that have a giroptic and cardboard or smartphone headsets. At the next level it’s the Samsung Gear but you need the Samsung S6 or above. A lot of phones in Latin America don’t have the capacity to run the 360/VR experiences.”

Alfredo R. Cebrián, CEO of Cuatroochenta, a Spanish company with offices in Panama City, agrees, pointing out that implementing VR projects is closely linked to device (hardware) market penetration. Companies like Samsung are making a clear bid by distributing their Samsung Gear VR, however consumer penetration is still quite low, and in lower income segments, almost non-existent, meaning that the first VR projects are limited to large companies and/or projects which direct their efforts towards target audiences with high purchasing power.

At the moment, Cuatroochenta's new VR department is developing niche projects in architecture with corporate presentations for large urban and civil architectural projects, and luxury retail. These projects are in the early stages, though.

Repetto is optimistic about Latin America’s chances, pointing to Argentina’s Globant, which is now a global company listed on the NYSE and has built its business model on services. He sees a similar model for VR in Latin America. “I think that in Latin America, it is going to be huge. If we play our cards right, we can be one of the VR providers for excellence in the world.”


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Bianca Wright

Bianca Wright is a UK-based freelance business and technology writer, who has written for publications in the UK, the US, Australia and South Africa. She holds an MPhil in science and technology journalism and a DPhil in Media Studies.

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