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Welcome to Lowpass. This week: Exploding Kittens embraces VR, and consumers are cutting back on video subscription services.

A quick housekeeping note: I’ll be taking the next week off, and will be back in mid-July. See you then!

Why Exploding Kittens could be a perfect match for VR

As Meta is gearing up for the launch of a budget-priced VR headset this fall, the company is likely also lining up a number of launch titles – games and experiences that will convince first-timers to give VR a try, and people who have only used their friend’s VR headsets to finally open their wallets.

Among the titles that is going to launch at or around the release date of the still-unannounced new headset: Exploding Kittens VR. Saber Interactive, the company behind such franchise games as Jurassic Park: Survival and The Witcher 3: Wild Hunt, announced this week that it is bringing a VR version of the popular card game to Meta’s Quest headsets this fall.

The announcement is intriguing for a few reasons. For one thing, casual card and board games offer a unique entryway to VR, and could potentially attract audiences that are less interested in first-person shooters or other hardcore games. But the game also represents just a first step into the world of spatial computing for Exploding Kittens, whose CEO Elan Lee has been obsessed with the medium for some time.

“We've always pushed the boundaries of how to make the people you’re playing with entertaining, and VR presented a unique opportunity to reimagine the Exploding Kittens experience,” Lee told me via email this week. “The challenge was to create a truly immersive game that didn't lose the heart of what makes our games so special – connection and interaction.”

VR is an unlikely medium for Exploding Kittens. Lee and his collaborator Mathew Inman of The Oatmeal fame launched the company with a Kickstarter campaign in early 2015 at least in part as a response to Lee’s disillusionment with the world of video games. Prior to the launch, Lee had been Chief Design Officer for Microsoft’s Xbox Entertainment Studios, but he decided to quit that job when he realized how isolating gaming could be.

I wrote a profile of Lee for The Information last year that includes more about the company’s origin story and evolution, but the gist is that card games like Exploding Kittens were pretty much the antithesis to his prior work: Instead of getting teens to zone out in front of the TV, these games prodded them to have fun together.

After perfecting the art of making physical games, Exploding Kittens has been slowly warming up to digital media again. The company has launched a few mobile games, and in two weeks, it will launch an animated Exploding Kittens show on Netflix.

VR can be isolating as well, Lee admitted when I talked to him last year. That’s especially true for bystanders. “It creates that same isolating experience,” Lee said. “Nobody else is wearing the headset. People sitting next to me? I look like an idiot to them. I'm having a great time, but I'm not having a shared experience with anyone in my vicinity.”

Exploding Kittens VR isn’t solving this problem either, but the game is designed as a social experience, and allows up to five people to play together online. There’s also an integrated social hub with VR-exclusive mini games that is supposed to make hanging out with friends in the Kittens VR world more fun.

What VR and card games have in common. VR insiders have long called the medium a contact religion. You can talk about VR as much as you want, but people don’t really get it until they try it. Conversely, it’s difficult to overload VR games with instructions, especially when you deal with newcomers to the medium who’d rather look around and explore than follow or even read through long-winded instructions.

That happens to be a very similar approach to what Exploding Kittens team has been doing with its physical games. “I hate instructions,” Lee told me last year. “I think they're a complete waste of time. I want to learn how to play games from my friends. But you can't put your friend in a box.” Instead, the company simply recorded a short explanatory video. “We're just going to teach you how to play the game,”  Lee said. “Go set the rules on fire. They suck.”

And just like during game nights with friends, it’s true that simplicity often wins out in VR. Beat Saber, which remains one of the most popular VR games of all time, can be played – and thoroughly enjoyed – with little to no instructions at all. Gorilla Tag, which has surpassed $100 million in revenue and attracts 3 million active players every month, is literally just a game of tag.

Next up: Exploring mixed reality super powers. Exploding Kittens VR was developed under license, but we may at some point get some first-party spatial games from the Exploding Kittens team as well. When I interviewed Lee via Zoom last year, he had a Quest Pro within arm’s reach, and told me that he has headsets “literally … in every room.”

“I spend a lot of time playing with VR and AR,” Lee said back then. “A lot, way too much.” One reason he has been spending so much time with headsets is that he wants to figure out how to combine mixed reality headsets with real-world game nights. “The most interesting stuff for me right now are ways to use a headset [in a way that] one person is wearing it, [but] nobody else is.”

Equipping one player with mixed reality tech could afford them super powers, Lee mused. “We’re sitting around a table,” he said. “We’re all playing cards. All those cards have QR codes on the back. When I look at them through the headset, I’ve got X-ray vision. I can literally look right through them. How can we build a game around that? That’s really interesting to me.”

Streamcession is real

Consumers have been significantly cutting back on their streaming expenses, according to new data from Parks Associates: The average US internet household spent $63 per month on subscription video services like Netflix and Max in Q1 of 2024; in 2021, the average spend was still $90.

“Consumers are spending less,” said Parks Associates Research Analyst Sarah Lee in a blog post. “Many are using ad-based alternatives to save on costs.”

A move towards video services with ads is not the worst that could happen to the industry. One reason that Netflix introduced an ad-supported tier was the belief that the company could actually make more money with the combination of a lower monthly fee and ads than with its cheapest ad-free tier.

However, consumers are also reducing the total number of services they’re willing to pay for, which could be a bad sign for anyone who isn’t running a must-have service. The average number of services has dropped below five, according to the research company.

What else

Redbox missed a multimillion-dollar payment it couldn’t afford to miss. My latest scoop for The Verge: The DVD kiosk vendors parent company had settled a lawsuit with NBCUniversal over unpaid bills — and promptly missed the first negotiated payment.

Inside Netflix’s bet on advanced video encoding. Another The Verge story from yours truly: A feature-length look at Netflix’s video encoding optimization.

Meta’s new Quest software looks more like the Vision Pro. The headset’s next OS update includes the ability to freely reposition 2D windows.

The RIAA has sued two AI music startups. Major labels allege that Udio and Suno are engaged in “en masse” copyright infringement.

Paramount+ is getting more expensive. The Paramount+ with Showtime plan will cost $12.99 going forward, while the Essential plan will be $7.99 for new subscribers.

The new magic number: 200 million. That’s how many subscribers a streaming service needs to have in order to be sustainable, according to some of the industry’s biggest names interviewed by the New York Times.

How YouTube dominates streaming. The Google owned service was responsible for 10% of all TV-based video viewing in May.

That’s it

One of the nice things about the early internet was the the sheer amount of random things it offered to those who knew where to look. People built entire sites that made no sense whatsoever, and were nonetheless thoroughly enjoyable. Onemillioncheckboxes.com is a site in that spirit, with the added bonus of being real-time and even kind of social. It’s like popping bubble wrap. With strangers. On the internet. Fun!

Thanks for reading, have a great weekend!