CastAR closes, IP for sale?

The CastAR dream: a slimline, lightweight set of glasses capable of projecting interactive 3D images onto a retro-reflective surface. Credit: Technical Illusions / CastAR

Augmented reality headset maker, CastAR (formerly Technical Illusions), and which I’ve been following and reporting on in this blog, has apparently closed its doors.

The company first came to prominence when the system – designed to use a glasses-like headset to project holographic images onto a retro-reflective surface users could then interact with via a hand-held controller  – was shown at the 2013 Maker Faire in New York.

At that time, the idea was very much fledgling and more spirit gum, soldering, tape and wires than it was a commercial venture – but that was enough to convince the pair behind the system, Jeri Ellsworth and Rick Johnson they had a potential product on their hands, so they went ahead with a Kickstarter campaign to raise US $400,000 to start development in earnest – and ended up raising over a million.

The Head Crab – Jeri Ellworths’ initial approach to what became CastAR. Image courtesy of Jeri Ellsworth

The system, called CastAR due to its primary function of projecting images onto that retro-reflective surface, actually came about by accident. In 2012, Ellsworth was working on another project at Gabe Newall’s Valve when she accidentally found she could create holographic-like images on the surface.

The potential of the idea excited her and (then) fellow co-worker Johnson, so they started delving into the idea. Then, in February 2013, they were among a group of staff let go by the company – and in a generous move, Newall allowed them to take the IP for the CastAR system with them, even though almost the entire development up to that point had been made on Valve’s time and with Valve’s resources.


The Development Kit / Kickstarter version of the CastAR headset. Credit: CastAR

From here, the story does suffer the hiccups. The Kickstarter raised US $1 million, enough to fund development of an initial headset system, but it was not entirely what Ellsworth and Johnson were hoping it would be. There were delays,  funding seemed (from the outside) to be slow in coming in and delivery dates for the initial Kickstarter headset got pushed back, although there was sufficient for the company to establish operations, hire a CEO (initially David Henkel-Wallace), refine the headset design, develop games to run on it.

But the company kept doing the rounds of VR / AR shows and the like, garnering publicity, generating interest and towards the end 2015, secured US $15 million in funding. The majority of this came from Playground Global, co-founded by Andy Rubin of Android Inc. fame, and Rubin persuaded Ellsworth and Johnson to back to basics and design the system they wanted.

Playing a projected game using CastAR (simulation). Credit: Technical Illusions / CastAR

As a result, in 2016, the company announced a significant change in direction. The US $1 million raised via the Kickstarter was refunded, together with a promise all backers would receive a “consumer” version of the headset,  CastAR hired talent to open its own mixed reality studio in Salt Lake City and acquired entire Eat Sleep Play development team, responsible for the Twisted Metal series and God of War. All of this was done with the aim of developing a complete consumer package – headset, controllers, game surfaces and games – which would be low-cost and playable “right out of the box”.  2016 saw LucasArts chief Darrell Rodriguez take over as CEO, with former Disney executive Steve Parkis as its president and chief operating officer.

Now, according to an article appearing in Polygon on Monday, June 26th, and since widely circulated in the tech media, CastAR has closed its doors with up to 70 people being laid off. There has been no official statement on the matter from either CastAR – the corporate website continues to reference a consumer product launch in 2017, although it doesn’t appear to have been updated since around the start of the year – nor Playground Global, despite attempts by a number of outlets to secure a comment. However, the Polygon piece suggests the reason for the closure is Playground Global’s refusal to provide further funding for the venture after CastAR failed to obtain investment from other sources.

The CastAR headset and “wand” hand controller as they looked in November 2016. Credit: CastAR

Following the story breaking, Polygon later updated their article to reflect sources stating that a small team has been retained by CastAR to oversee attempts to sell the company’s IP. But again, there has yet to be an official statement from CastAR.

This might be seen as a blow to the fortunes of AR. However, as innovative as CastAR was (and as much as I found their approach fascinating), the system took a markedly different approach to AR / MR than is the case with the likes of Qualcomm (see here) and others, simply by its reliance on a retro-reflective surface. While the latter is well suited to gaming, and the company tried to suggest it could have practical applications through their promotional videos, it still might have been seen as a limiting factor in the system’s broader appeal.

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