Last week I had the great privilege to see industry legend, Atari and Chuck E. Cheese’s co-founder Nolan Bushnell talk at the 2016 NXNE Future Land Interactive Conference in Toronto. Bushnell was at the event thanks to AMD (whom he credited with saving Atari with a line-of-credit extension) to talk about his storied past in the interactive entertainment industry as well as its present state and where the future may take us.

In his talk, Bushnell took us through the greatest hits of his long career, including how he got into the electronic gaming industry, the creation of Pong, and the founding of Atari. He also gave the two Steves, Wozniak and Jobs, their first jobs in the industry when they worked at Atari and built the hardware for the arcade game Breakout.

Interestingly, though, at least for us, Bushnell didn’t mention another significant employee of Atari in his presentation – Jaron Lanier who worked at its research labs until he founded the pioneering VR company VPL Research in 1984 and who is also credited with coining the term “Virtual Reality.”

Along with other ventures like the Apple II-programmed Androbot Topo educational robot and early automotive navigation system company Etak, in addition to Atari, Bushnell is most well known for founding the Chuck E. Cheese’s chain of restaurant/entertainment centers.

His many years of experience in the arcade business at Atari and at Chuck E. Cheese’s means that Bushnell has a unique perspective when it comes to public VR experiences like The Void and VR arcades, which he thinks are going to be more successful in the short-term than expensive in-home VR hardware. Of course, it doesn’t hurt that one of his sons runs Virsix, a location-based entertainment company that created the VRCube VR arcade game.

The most off-the-wall part of the talk was the reveal of Pong, The Musical, an interactive, immersive 4D experience that will take place in a 10,000 square foot warehouse. It will use AR and VR to tell the story (with music!) of Pong’s quest to change from being a “square ball” to being round. Bushnell has a rule that he has to do something extremely different every two years, and Pong, The Musical is the result of that. When we asked if he could share more details, he said it was too early right now, and more information would be released in the fall.

After the presentation, we were lucky enough to be able to interview Bushnell, and I sat down with him to get his thoughts on the past, present, and future of VR.

Alex Davies: Before we start talking about the current state of VR and your thoughts on it I wanted to ask if you were ever involved in the very early days of VR?

Nolan Bushnell: Yes, with Jaron Lanier and Eric Gullichsen [who worked on VR projects at Autodesk in the late eighties]. It turns out that it was funded in the early days by Autodesk, and there was a whole VR group in Sausalito in North California, and they had VR using the Polhemus tracking device, which was pretty crappy stuff. Then there was a VR construct for the Amiga [Virtuality] – it was Amiga-powered, and it was pretty good, but it had latency, and you literally got sick within three to five minutes of using it.

AD: Did you believe at that time that VR was going to take off, or did you think it wasn’t ready for primetime?

NB: I felt it wasn’t ready for primetime – I think it’s hard to make money on technology that makes you sick.

AD: Everyone thought that VR was going to explode, then suddenly it felt like it just disappeared, almost overnight – I guess it was that if it makes you sick, it’s not particularly fun.

NB: There was also another confusing thing. Nintendo came out with the Virtual Boy, and it sold out and then it went away, and I always thought there was a story that needed to be uncovered there.

AD: Now we’re in a new golden age of virtual reality…

NB: …I think it’s happening. I think it’s driven by two things – the screen resolution, and the screen costs are so low and the second thing is the computing power we now have, allowing for the ability to transfer huge amounts of data over the air so you can, in some ways, untether a lot of stuff. Cheap gyros and accelerometers give a physical underpinning to the technology as well.

AD: You still think, though, from talking to you earlier that the idea of in-home VR isn’t going to be there for the mass market, and we’re going to see most accessible-to-the-public VR experiences for the foreseeable future in VR arcades and at special events?

NB: I believe that in the next two years there will be less than a million headsets sold – I’m talking in the US, not worldwide…

AD: That’s not including mobile solutions like Gear VR, correct?

NB: Correct. I believe that [those sales figures] represent an interesting market but not a wonderful market. However, I believe that the public VR market is going to explode. I think there’ll be all kinds of VR arcades, VR experiences and I think there’ll be a good five to ten year run of that.

AD: There seem to be two approaches to creating these experiences. There are outfits that just want to take off-the-shelf consumer VR hardware and put it in a space and simply make you pay to play and then there are companies like The Void, who are creating these custom theme park ride-like experiences. Which approach do you think is going to be more successful?

NB: I think that there is a problem innately with CapEx [capital expenditure] and throughput. I think that a lot of the failures and successes will be driven by the economics. In general, entertainment needs to make a dollar for every fifty cents of investment on an annual basis so how much can you charge – and it’s very difficult to create a business that charges much more than a movie ticket.

AD: People have been bringing up Laser Tag as a model for VR arcades, but then Laser Tag disappeared.

NB: Yes, but it had a good five-year run and also you could put twelve people through [each time] and twelve people paying ten bucks is a lot different to one or two. You’ve got to get enough entertainment seats [filled] to cover the overhead and the costs. You can do that pretty easily with off-the-shelf [VR] stuff. With custom stuff, you have to put a lot of money in before you make a dollar out.

AD: It’s interesting that with The Void, along with the wind and the fire [4D] effects they’ve also said that the VR hardware that they’re going to use, the headset and backpack, is going to be custom designed. I’ve often wondered why they don’t just take off-the-shelf VR components and adapt them to the experience instead of building everything from the ground up.

NB: Well, the neat thing about this world is that opinions are a lot like assholes – everyone’s got one [laughs], and I think that it’s going to be hard to figure out the right solution. If their [The Void’s] solution is really significantly better and people are willing to pay for it, it will be a good solution. If it’s – there’s a certain amount of pixelation on any of the current headsets, the HTC Vive or Oculus…

AD: You’ve tried all the current major headsets?

NB: Yes. I would like less pixelization – you’re basically looking at these screens through magnifying glasses, you know. I think right now that you are selling the experience, not the resolution.

AD: I wanted to talk about the kind of experiences you can have in VR and also relate it to your idea for Pong, The Musical that you talked about today, an idea which I think is fascinating and amazing…

NB: Isn’t that crazy? What I want to do in these speeches is at least have the audience to think that I’m nuts [laughs]

AD: [Laughs] The idea of a musical in a large space [Pong, The Musical is planned for a 10,000 ft warehouse] that combines AR and VR, music, story, and the audience can move through space, that is very interesting and potentially really exciting. It can break the mold of what a musical is, the idea of people, where you sit and watch the performers on a stage.

NB: Yes, get rid of the proscenium arch, have the action all around you, that’s what I want to do.

AD: That’s a unique and innovative approach to using new technology to provide a different kind of entertainment experience, and in the VR space right now where some people are simply interested in recreating current gaming experiences in VR. Do you think it’s a bad idea for VR developers to take existing experiences and just try to VR-ize them? Shouldn’t everybody try and make something completely new and unique using this technology?

NB: No, I think there’s always an opportunity for a remake, redoing proven hits. You could actually say that Halo is not that different than Doom. If I’m doing the financial risk analysis, I would rather take something that has proven to be a good game and VR-ize it, hoping that fans of the game will suck over into my [VR] environment.

AD: Because, at the end of the day, developers need to make money, they’re not all starving artists

NB: It’s not about kumbaya, it’s about let’s cha-ching [laughs]

AD: The last thing I want to ask about is the future and how eventually VR will transition to a mixed-reality experience where you can seamlessly shift between the augmented and the virtual. Knowing the technology out there now and what’s coming out, how far off do you think we are before we can put on a pair of glasses and have MR becoming part of our everyday experience, from waking to rest? Is that still that decades down the road?

NB: Have you read Ready Player One? It’s basically these guys living in a virtual world, and their virtual word is much cooler than the real world – I think that there’s a big hole in the technology, and that’s haptics.

AD: How do you achieve it [full-body haptics]? Suits?

NB: There have been all kinds of things – there was one proposed many years ago, they called it the spider web cage which your arms and legs were connected at three points to servo motors, so when you were up against a wall [in VR] a servo motor would stop you. You would feel like there was a wall there, or your leg could bump into things, and that was kind of OK – it had problems with occlusion, but it gave you a pretty good feeling.

AD: Couldn’t they eventually just do some kind of direct nerve connection?

NB: You mean jack-in, The Matrix – well there’s still the problem if you don’t physically stop your muscles…

AD: When the technology gets there that you can have this amazing mixed-reality experiences, and you could customize every aspect of it and have the power to augment your every waking moment do you think we’ll run into the problem of people doing this continuously and living their fantasy life 24/7?

NB: When you look at Second Life, a lot of people got very heavily into Second Life, so the answer is yes and no. Some people will and some people won’t.

Our time spent talking to Bushnell was fascinating and what impressed me the most was that unlike many other luminaries from the early days of the video games, he is, at 73, just as knowledgeable as anyone as to the current state of the industry and the technologies and trends that are driving it. I was also impressed that he still has the drive to come up with new and unique ideas like, for example, Pong, The Musical, and we can’t wait to experience Pong’s immersive journey from square to round set to music. When we learn more about it, we’ll be sure to bring you the news.

The big takeaway for the VR industry from our conversation is that Bushnell is currently at bit pessimistic as to how successful the current generation of home-based VR will be. He thinks that VR experiences like The Void, VRcade and CtrlV (whose opening we recently covered) will be more successful in the short-term getting virtual reality onto the heads of the masses. It’s also interesting that he doesn’t think that adapting current games to VR is as big of a problem as many people think and that this approach will help developers find financial success by going with proven experiences rather than trying to create something completely new.

Parts of this interview have been edited for clarity and flow.