Besides giving me an excuse to put a NASDAQ ticker over the latest Inspirational Poster, Gravity Jack is developing an SDK for their indoor system.

Features of the SiREAL World SDK in development now:

IPS – Indoor positioning system, using a patent pending method the phones running our software create a mesh that allows us to position the phone exactly in a Cartesian space indoors. It is almost like walking around with your phone acting like an RFID tag but with coordinates. We also use patented vision techniques to make your phone become the symbol thereby avoiding symbol recognition.

Instant Mapping – Utilizing a combination of scene recognition and real time edge detection we can build the real world scene into a 3d wireframe model on the fly. This allows for actually placing 3d objects in the scene and even behind real world objects because we have depth built into our model. AR products today just overlay things on the same front layer. Our technology allows us to place objects in the actual 3d plain.

GeoLocation and Proximity Alert – Allows a user to receive push notifications when they are near a SiREAL object and for storage of GeoTags for placing objects in the real world.

Asset management server – Our asset management server allows you to upload 3d assets or triggers, symbols associated with those assets and our object recognition will return the correct asset to your application.

Stickyness – While not a technical feature – what we have discovered is that by creating augmented reality applications and an engine that allows for true, non gimmick, life enhancing AR; users keep coming back! AR isn’t just a gimmick with us.

In summary, we fully support existing technology like symbol recognition, GPS tagging, but have new ways for AR to work indoors, in the dark, socially and we can create stickyness in our AR applications. Not only that, our tech understands what it is looking at and gives depth to scenes – something currently done with expensive dual camera setups.

Today, Steve Jobs announced at the Apple Music Event, the new incarnation of the legendary iPod product line.

One of my personal highlights was of course the new iteration of the iPod Touch. Faster (Apple A4 processors – like in the iPhone), with the new Game Center(iOS 4.1), the largest games market (1.5 billion games and apps have been downloaded to the Touch), and now – can do Augmented Reality.

Jobs bragged the iPod games outsells Nintendo DS and PSP games – combined!

There you have it – the perfect new platform for augmented reality games (as long as you have WIFI…)

Thanks to the work of researchers from the Korean Gwangju Institute of Science and Technology and the Swiss EPFL, this needn’t be the case anymore. In a paper titled “Point-and-Shoot for Ubiquitous Tagging on Mobile Phones” accepted to ISMAR 2010, they present a method to scan surfaces and create “recognition-models” by using your phone (no data is sent to a remote server).

You don’t even need to take the perfect straight-on picture. As the video below shows, this means you can augment hard to reach surfaces. Best of all, you can share those models with your friends.

A little bit more detail over Wonwoo Lee’s blog.

We all are great believers in the potential of Augmented Reality (AR). Within the next 10 years, we say, it will totally change the way we interact with the world.

But what industry will be the first to bring AR to the masses?

When you co-found a company that focuses on Augmented Reality games – and especially – when it secures an investment from a venture capital firm – you have some deeper explaining to do.

Here are 3 key (business) reasons why games will be the first industry to spearhead augmented reality into the mainstream:

Reason #1 Games are the killer app for emerging technologies

Games Accelerate the Adoption of New Technologies by the Mainstream

Games have a history of pushing the envelop of new technologies and bringing new inventions to the masses: computer graphics, memory, silicon, screens, 3D animation, interactive story telling, immersion…and the list goes on and on. What made GPUs popular and drove its development? Games! First mainstream handheld electronic device? Games! When PCs were first introduced to consumers how were they marketed? As more capable than video game consoles…

Nolan Bushnell (the legendary founder of Atari) wrote back in 1996:

“WHIMSY and fun are often the precursors to powerful tools that are used later for more serious

applications. A project at inception might not be useful because of lack of infrastructure or

incomplete refinements. The automobile and airplane were considered toys before they were

reliable and safe. The computer game has filled a similar role in being the incubator for many innovations that drive the usefulness of the computer.”

Was the first PC a video game console?

Gaming has done it many times in the past – now it could accelerate the adoption of Augmented Reality (AR) by the mainstream. And it has another advantage…

Game Design Can Overcome Technology Limitations And Deliver a Powerful Experience

In the best games, the pleasure manifests itself in the players imagination – not necessarily on the screen.
Skeptics will say AR is not ready for the mainstream yet: It’s not fast enough; it doesn’t work in bad lighting conditions; hardware has a long way to go – and you know what – they may be right. However, in games – clever game design can help overcome technical limitations and provide a fun experience. This luxury is not available for many types of real world apps, definitely not military or healthcare apps – which deal with life or death situations.

In games, you can focus the player on the highlights of the technology, and dodge the stumbling blocks. Or you can take advantage of a technical drawback and present it as a challenge of the gameplay  - which makes the game even more captivating. In the words of Raph Koster, a veteran game designer: “Creativity, is largely about finding solutions within a known problem space.”

For example: recognizing an object takes too long? build it into the suspense of the game. Tracking gets out of whack when the camera moves too fast? encourage players to keep it steady as a special skill required for succeeding in the game. Tell a good story; use non AR elements to create a more rounded experience; use AR as a highlight that takes the game to a never-before-seen level.

Game design is a strong reason why games will be first to drive AR into the hands of consumers.

But is there a market for these AR gaming experiences?

Reason #2 Games is a big business going through transformation

500 Million Digital Natives Will Spend 10,000 Hours Playing Games Before the Age of 21

A recent statistic (heard at TED by Jane McGonigal quoting a research by Carnegie Mellon University): “500 Million gamers Will Spend 10,000 Hours Playing Games Before the Age of 21″ (and in a decade another billion gamers will be added.) That’s a lot of people, spending a lot of time with your product. Plus they are early adopters which makes them a likely audience to want to try your product.

AR devices are already in our pockets

What’s the barrier for entry? Can digital natives afford the hardware required to experience AR games?

With the invasion of the iphone, Android phones, and other smart phones into our pockets, all of a sudden, we carry with us at all times, the ingredients required for an augmented reality experience (nice screen, video camera, adequate processing power, communication, GPS, and other sensors). Many digital natives already have an AR capable device…in their pockets.

(31% of U.S. teens want iPhones And 14% already own one and Android phones are catching up.)

By the way, how many americans currently play on mobile devices? 42%!

OK, so many people are spending a lot of time playing games and have the hardware to play AR games, but what’s the revenue potential of the game industry?

Gaming is a $67 Billion Growth Industry Going Through Transformation

Gaming is huge. Bigger than music, bigger than movie box office. And yet, it is going through a major disruption.

On the one hand revenues by major publishers such as EA and Activision, are growing, but on the other hand they are struggling with profitability.

One of the key drivers is the massive transformation from retail distribution to digital distribution: the iphone, online games, and social games – are bypassing the old retail distribution model which charged $30-$60 per title and are reaching directly to consumers with a race to the bottom in terms of pricing.

Another major disruption is the rise of new game genres – most notably social games. Companies which as recent as 3 years ago were unknowns, are now being gobbled for huge sums:  $300M for Playfish (acquired by EA), $763M for Playdom (acquired by Disney), Slide (acquired by Google), Kongregate acquired by GameStop, Zynga is estimated to be worth $3B and can hardly be acquired…

Zynga's Farmville

Social games and casual games are reaching new audiences that previously were out of reach for game developers (survey shows that dominant age group playing social games such as Farmville is women 35-55).

Jesse Schell, instructor of entertainment technology at Carnegie Mellon University  says: “There are games now for pretty much every age, every demographic. More and more women are going online. It comes down to everybody is playing games. Games are just evolving like species in order to fit into every little niche of our lives.”

In parallel to the change in game genres and audiences there is also a massive change in business models. If up until recently games were selling for $30-$50 a pop and required a trip to the store which limited its potential audience – nowadays a new game is a click-to-download away and more and more games are available for free.

Which leads to the next point – a fresh business model that was made for games.

Free2Play + Micro-transactions is a Business Model  that Works Best in Games

web 2.0 has brought about the concept of Freemium business models which help reach massive audiences and drive light speed growth in revenue. Free2Play + micro-transactions is taking it further. Games are much more engaging than any other form of apps and drive the consumption of digital goods. Tying purchase to the compulsion loop in games has proven to be very effective. In the words of ngmoco’s Neil Young – it’s the new “Quarter Sink” from the arcade games era.

Of course, when using micro-transactions in games it’s important not to detract from the experience. Farmville by Zynga is a good example: impatience is the driving factor behind the appeal of micro transactions. And thus the experience is in no way impacted by those with patience and resourcefulness. As long as you avoid the potential pitfalls with micro transactions as articulated by Kevin Miller this business model is a fantastic revenue stream for games. Especially on the iphone where a 99 cent for a virtual weapon needed in the game is just a tap away. Worldwide sales of virtual items are expected to reach $7 billion by 2015, according to online games research firm DFC Intelligence.

Where else (except music) do you find such levels of revenue from digital goods?

Games Are a Key Tool For Marketers to Reach Their Audiences and Bolster Brands

Games are such a powerful medium for engaging audiences, that it is becoming a key tool for marketers to reach their customers and strengthen their brands. Take GE’s Smart Grid interactive campaign featuring augmented reality –  it got more than a million YouTube hits – an order of magnitude higher than equivalent traditional online campaigns. The Advergaming industry had revenues in excess of $3 billion on mobile, iPhone, and social networks platforms. And this is accelerating because digital natives expect to interact with the world through games. New target age groups and demographics are playing games which are more immersive than other types of advertising.

Games have just surpassed email as the #2 online time killer for americans. Guess what’s the first time killer? social networks. And what do people do on social networks? 40% of the time is spent playing games…

Adam Dole (a Design researcher) wrote in his paper : “Games engage consumers and build value around products and services, creating a powerful competitive advantage. The highest level of consumer engagement and brand loyalty comes from positive experience. By reflecting the way people want to act, a product or service more effectively changes attitude and behavior.”

Couldn’t have said it better.

So, games are big, and will get bigger. But how does it relate to AR Games which are played in reality?

Reason #3 Games are Getting Physical

For Digital Natives Gaming has become the primary metaphor for interacting with the world

The next generation (aka digital natives) has evolved to expect a very different way to interact with the world, and it’s largely influenced by games and the internet. They expect everything they interact with – to behave like games: provide challenge and reward loops, fellowship, discovery, narrative, expression. These are game pleasures (loosely taken from Marc LeBlanc’s list) that digital natives are used to – and they seek them in anything they do – in their real lives.

So if games escape computers and consoles and penetrate the real world, how will it impact our lives?

Games have the power to transform our real lives

Really?  Just checkout the Fun Theory Guys’ work. This team is hard at work proving that by injecting fun into daily routines you can change people’s behavior . When presented with multiple options (stairs or escalator) people are more inclined to chose the option that is more fun (playing piano while going up the stairs.)

Gabe Zichermann – which has been touting the funware theory says: “anything can become more fun if you bake games into it. The human brain is attracted to fun. Games can improve the outcome of every aspect in life. Points, rewards, immersion…”

In sales, it has already been used successfully: leaderboards, scoring and badges are a common aspect of sales people in many sectors.

Jane McGonigal takes it further in her Ted Talk and claims: “Games create urgent optimism and blissful productivity.” How could we harness this power to make the world a better place?

Jane McGonigal

Speaking of Jane, she has a track record of applying game mechanics to non game environments: she designed game features in ebay.com to reward sellers for high throughput combined with high satisfaction, by awarding them badged and literally unlocking levels.

Here are more examples listed by Adam Dole (a Design researcher) in his paper about Gaming for Behavior Change:

• Mint.com, a financial management tool that leverages gaming principles to successfully capture and expand its market.

• When Toyota began visualizing fuel consumption for drivers in their Prius models, they created a “fuel economy game.”

• RecycleBank is a web-based service designed to promote recycling. Families accrue points based on the weekly amount of materials recycled; these points can be redeemed for discounts at over 1500 national businesses.

• Byron and Leighton in their book: Total Engagement – show how to use games and virtual worlds to change the way people work and businesses compete.

But are websites the most optimal interface to “gamify”  our lives?

Why not insert these same mechanics into our field of view?  Into our visible reality? Into our daily routine?

Augmented Reality and games mechanics is a match made in heaven to reshape our real lives.

But here’s the caveat: when I first gave my 12 year old daughter an AR game to test – she asked: will I have to move…?

Are kids really interested in moving while playing? Will gamers be leaving the comfy couch and beloved controller in exchange for playing in the real world?

Games are Already Moving (Back) into The Real World

Digital natives born were into the digital revolution; they may be shocked by the following revelation: before video games – games were actually played in the real world. Since the dawn of man – playing games was how humans learned new skills. When civilization started 10,000 years ago people have already been playing board games and team games. In 1972 with the introduction of Pong – games have started a transition away from the real world and into the digital realm…

The latest trends in the gaming world (across consoles, social games, and location based games) point to games moving back into the real world: interfaces are becoming more intuitive – losing the traditional game controllers in favor of gestures. This has been aggressively persued in the game console segment: first by the phenomenal success of the Nintendo Wii which opened up new markets for gaming beyond hard core gamers. Sony Eyetoy and Sony Move are taking it a step further with a camera based system that tracks the movement of gamers. Microsoft  Kinect for Xbox (planned to be introduced this holiday season) will not require any controller whatsoever – the player’s body becomes the controller.

In social games, players interact with real life friends instead of imaginary avatars such as DragonSlayer85 which, in a way, is making the games more linked to the real world. In addition, Zynga, the leader in social games, expanded its super successful Farmville game to interact with real world objects. Starting this summer, consumers will be able to purchase specially marked products to receive a redemption code that can be used for a new, limited-edition virtual good in one of three Zynga games. For instance, you can buy a real Big Gulp from 7-Eleven and get a virtual version as well.

Location-based games are emerging and attracting massive audiences. Games such as MyTown which let you buy and own your favorite real-life locations, and collect rent when other people check-in to your shops – has amassed more than 2 million users in several months (more users than Foursquare has!), and has recently introduced Product Check-ins – registering interaction with an actual product by typing in a code.

Facebook, a phenomenal growth engine for social games, is also getting closer to the real world with the recently announced Facebook Places.

Clearly, there is an appetite for gamers to play in the real world. This transition from a made up virtual world that takes place on a screen – to the real world – is already happening. Augmented Reality has the power to accelerate this momentum and along the way introduce a new type of experience to massive audiences.

The Opportunity

Now here’s the big question: if games can advance AR forward, have a huge market potential, and have the power to impact our real lives for the better  - how do you explain the following fact:

The top 18 of 20 paid iphone apps of all time have been games and entertainment (2 are music and 16 are games) and yet, there are only a handful of (mediocre) AR games available on the app store?

How come?

The underlying reason is that good AR games are hard to make. Since the technology is admittedly in its early stages, developing AR games require in house expertise in AR, which are hard to find. Even if you do posses these rare expertise in house – it must be merged with game design skills to take advantage of the technology and create a fun and sustainable game experience.

Building successful AR Games relies on nurturing multiple disciplines and carefully fusing them together – with lots of passion. This has never been done – until now.

Fusion...

This gap between the attractiveness of games in general and the lack of AR games for sale – points to a huge opportunity.

Someone, somewhere is currently working on a killer Augmented Reality game that will completely change the way we look at games, and will catapult Augmented Reality to mainstream awareness. I believe it will be unveiled in the coming months.

Are you it?

Do you have what it takes to make AR Games that reach the mainstream?

The best thing is that Extra Reality provide an SDK to develop your own AR models, which can then be uploaded to their servers to be identified by clients worldwide. And it’s free for non-commercial use.
I’m a bit worried about their marker code, though, as it seems to contain a very limited number of bits. If Popcode becomes hugely successful (and I really hope so), they’ll have to come up with another scheme.
Sadly, it’s only available for Android right now, so I can’t really test it (hey, benevolent sponsors to be, this is a call for help!).
See more demos at Popcode’s website.

• Real time and quite robust face tracking on Nokia N900 from researchers at the University of Manchester. Not originally part of an AR project, but could be easily become one. [Via Zugara]
  
• Congrats to Kooaba for landing a $3 million funding round (boo to Techcrunch for coming with the corniest headline ever for a story; even I don’t get so low).
• A multi-part video interview with Robert Rice. Probably Future Labs will upload it to their site in the coming days for a more comfortable viewing experience.
• Want an augmented version of Hollywood’s Star Walk? There’s an app for that, and it will cost you 3 bucks. Would someone create a free channel for Layar or Wikitude, please?
• Two years old art project, but still cool – creepy crawlies of the augmented kind (luckily they are still squashable)
• Mashable on how non-profits can use augmented reality, and why they don’t actually do it. [via @DavidFosterAR]
• More fluff about Google Goggles, and some speculative fluff about AR in Windows 7 Mobile phones.

This week’s video comes to us from Youtube user bittman25, or as his friends call him Danny. The clip is called “If Minority Report Was Our Twisted Reality”. It’s not a masterpiece, but has a nice twist at the end:

That’s it, have a nice week!

Apparently Augmented Shadow stems from Moon’s MFA thesis in Design & Technology for Parsons. He writes:

In this installation, the shadows exist both in a real and a virtual environment simultaneously. It thus brings augmented reality to the tabletop by way of a tangible interface. The shadow is an interface metaphor connecting the virtual world and users. Second, the unexpected user experience results from manipulating the users’ visual perceptions, expectations, and imagination to inspire re-perception and new understanding. Therefore, users can play with the shadows lying on the boundary between the real, virtual, and fantasy.

More details on the project’s home page.

One of the highlights of ISMAR2010 will be the Mobile AR Summit, chaired by Christine Perey, Jung-hee Ryu and Woontack Woo.  The event will be held on October 13th, 2010 in Seoul, Korea.

This summit provides a single forum for all stakeholders to meet and discuss the future of commercial Mobile Augmented Reality, present their contributions, and set future directions for collaboration.

Towards these ends, the Summit seeks to:

• Include representatives from all parts of the ecosystem of Mobile Augmented Reality:
  • Mobile Network Operators
  • Independent Software Vendors
  • Experience Designers
  • Augmented Reality Service Providers
  • Handset Vendors
  • Silicon/hardware component manufacturers
  • Publishers
  • Advertising Agencies
  • Local Search Companies
  • Internet Companies
  • Standards Organizations, Industry Bodies
• Discuss current technical and/or business barriers to growth with an eye to understanding how these can be reduced,
• Learn about proposed mobile augmented reality protocols, and how these will be integrated with existing mobile industry constraints and trends. Solutions addressing privacy, security, and monetization on mobile are of interest.
• Identify the gaps in the industry at technical and business levels so as to chart the roadmap to continued and accelerated growth in the future, and
• Explore avenues for industry collaboration.

See the Mobile AR Summit page for more information.