Apple has just bought VR company SPACES for an undisclosed amount.

According to Protocol, Apple confirmed the recent acquisition. In an email response, the tech giant said that it "buys smaller technology companies from time to time." And that they "generally do not discuss the purpose or plans." 

SPACES is yet to release an official statement. However, the company did give some clues on their website. "SPACES is heading in a new direction," the website's headline reads. SPACES thanked its users and partners who participated in their product. The team also thanked the consumers. Their located-based entertainment attractions are installed at theme parks, theaters, and other locations. SPACES did not provide further details. 

Location-based VR industry is struggling

SPACES was a spinoff of Dreamworks Animation. Before Apple acquired SPACES, it was known for developing location-based VR experiences at theme parks and theaters. However, due to the pandemic, SPACES had to close all their arcades. The company then shifted to developing VR add-ons. Their product allowed the use of animated avatars on video conferencing software.

SPACES was not the only casualty of the pandemic. Many other location-based VR companies suffered the same fate. For example, Sandbox VR filed for bankruptcy protection. Sandbox VR was operating 10 VR centers in North America and Asia. All of which are now closed. Along with the shutdown, 80 percent of its employees were laid off, including their then-CEO Siqi Chen.

Other firms hit hard by the pandemic include Zero Latency, The Void, Dreamscape, the Protocol report said. The Void was operating several VR centers in North America, Asia, Europe, and the Middle East. Then the company had to halt its operations on March 18. Chief Marketing Officer Jamie Apostolou said everything went dark that day. 

So, why buy SPACES when the location-based VR industry is in dire straits? Marketing Dive points to the growth potential of virtual events and conferences as a possible reason. This makes business sense. Many people are expected to shy away from large gatherings, even after the health crisis. 

For several years now, Apple has had several acquisitions. These include NextVR, Akonia Holographics, and Vrvana. Many believe that this move is to beef-up its team as it strengthens its hold on the virtual reality space. But as to how Apple will leverage SPACES is still up in the air. Will Apple use the recent acquisition to leverage on SPACES' VR roots? Will Apple aggressively compete with video conferencing software giants like Zoom, Cisco, and Skype?

CEO Tim Cook has been vocal about how he sees potential in AR technology. He stressed it during the Q1 earnings call. He said that AR would play an important role in how we use technology in the future. And that it is gaining traction in both the corporate space and everyday consumer usage.

Reports say that Apple was working on its AR and VR headset that could be introduced in next year or in 2021. 

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