Virtual, augmented and mixed reality devices and environments are gaining momentum as viable tools for the design, construction, and management of cities and buildings. Tech companies working in the field of extended reality and gaming are developing software applications and tools for Architecture, Construction and Engineering, and the Real Estate industry. How will this impact the built environment in the near future? What possibilities and opportunities can mixed reality offer for real estate? These are some of the questions we start to answer in the (Un)Real Estate research initiative at the MIT Real Estate Innovation Lab.
Game engines, such as Unreal Engine and Unity, are used by architects, planners, developers, and real estate companies to build the mixed reality applications needed for their work. For example, Unity Reflect and Unreal Engine are used for the transfer of multiple BIM and CADx models into a three-dimensional, real-time environment. The real-time visualization enabled in these engines helps to gain a better understanding of the physical environment – such as scale and proportion, switch locations, lighting – and can accelerate future development proposals. This software ultimately aims to streamline the project lifecycle and increase the efficiency across all stages of the project, from the design conceptualization to the construction. Additionally, it serves as a communication device between different stakeholders, not unlike shared BIM models which are already used for discussion and decision making during the design process.
The spaces we see in digital models used in AEC and Real Estate are created by the same technology used to create the landscapes in games such as Fortnite and Minecraft. Moreover, the scale and scope of the gaming industry is indicative of its effect on culture, society and economy. As we have mentioned in our pilot medium article, the sales revenue of the gaming industry exceeds the sales revenue of the music and cinema industries combined. Currently, there are over 2.5 billion gamers worldwide, and the virtual goods market is growing exponentially. According to the same statistics, the secondary market of virtual goods now exceeds $50 billion. Prior to the Covid-19 pandemic, e-sports stadiums were being built across the globe on a massive scale, and the gaming industry continues to grow as more and more people find themselves exploring virtual worlds as both entertainment and work environments.
- What is virtual real estate?
The term virtual, in conjunction with ‘real estate’, is often associated with the visual communication of real estate assets using visualization and extended reality technologies. For example, a virtual real estate walk-through allows a client to see and experience the space of a building in virtual reality, either replacing or enhancing broker services. Other use cases include digital twins utilized for property management, such as for monitoring of the building systems and security, and cross-disciplinary collaboration and training for designers, engineers and developers.
More accurately, the term virtual real estate refers to the virtual land or buildings that can be bought and sold in online digital games or other types of virtual assets that have a specified location, web address, in-app address or id, or geo-reference. For example, web domain names or land and buildings in online digital games and virtual worlds can be considered as virtual real estate.
- What is Extended Reality?
In 1994 Paul Milgram proposed a conceptual diagram of a virtuality continuum, which is a continuous scale ranging between the completely virtual – a virtuality – and the completely real, reality. Mixed reality, the space where virtual and real environment interact, was nested between the two extremes. With the technology available today, this conceptual framework has shifted towards a non-linear concept known as extended reality. Extended Reality (XR) refers to all virtual-real environments combined, including augmented and mixed/merged reality and their in-between states. Extended reality subsumes all virtual and real environments interacting and affecting each other through digital technology. This ranges from Google maps to Pokémon Go, and VR real estate walk-throughs to immersive VR experiences.
Virtual environments span from the dynamic representation of data, sampled from the physical environment to the representation of a fictional environment, or a hybrid of the two. These environments stem from digital twins and BIM models of architectural projects to online games and virtual experiences. Extended reality and gaming technologies are becoming widely accessible and are implemented in a broad range of fields, including Architecture, Engineering, Construction and Real Estate.
- Brief overview of extended reality & gaming tech for AEC and Real Estate:
One of the most relevant use cases of extended reality and gaming technologies in the AEC and Real Estate is digital twin. As Dr. Andrea Chegut, James Scott and other industry professionals already identified in Primer on Smart Buildings and Digital Twins, a Digital Twin is a model of a process, product or service. In AEC and Real Estate, a Digital Twin is a digital representation of a physical building that combines three-dimensional visualization with other types of data such as occupancy rate, traffic flow, real estate value, energy use, pollution and other in one place. Several countries around the world have a national Digital Twin program, most notably the United Kingdom. Big tech players such as IBM, Cisco and Siemens, alongside Arup, Cityzenith or 51VR, work on a broad range of solutions from proof-of-concept small projects to full enterprise developments of digital twins for the built environment.
A more traditional case for the use of gaming technology and XR in our field is visualization and visual communication. Real-time rendering engines, XR and traditional to film and television industry cgi have been finding their niche in the real estate industry. These technologies now assist with VR real estate experiences, interactive walk-throughs and green-room experiences for home-buyers. Companies working in this direction include Matterport and RoOmy, which focus on consumer software adopted by the AEC and Real Estate industries, and Zillow, a real estate listing platform. Notably, these virtual property tours are both desktop and VR-based. XR is also used for property management: companies such as Resonai are utilizing AR for building-scale navigation, maintenance and control of building systems.
Another use case for XR and gaming technology in AEC and real estate is in training. Employee training is an essential part of the construction industry, and the use of AR can reduce new workers’ safety risks of being on a site. HoloForge Interactive is using Microsoft Hololens and Unity on the XR applications for the construction work training and testing. With the mixed reality training software for a mobile crane and a bridge operator, HoloForge promises to reduce the risks of training in an actual construction environment while improving the performance in operating the machine.
Among the most mainstream cases that connects XR with AEC and real estate is consumer AR applications. For example, IKEA Place, Houzz AR, and other similar applications are used for interior design plans and virtual decor placement. Unlike previous examples intended for an expert audience or site-specific use, these apps can be used by anyone who has a smartphone.
- What is the value of virtual assets embedded into physical space?
Consumer AR games can provide insight on how the built environment and real estate sector can be affected by geolocation-based, virtual assets. Anecdotal evidence suggests that when its popularity peaked in 2016, Pokemon Go assets were used to drive the value of rental listings. Listings on Craigslist would indicate nearby pokestops or pokegyms as attractive features of the neighborhood. Niantic – the company behind Pokemon Go – has had marketing campaigns with Starbucks, resulting in over 7,000 Starbucks locations across the US becoming pokestops or pokegyms. These pokestops and pokegyms are where players can collect or train pokemons.
AR can be used to increase foot traffic, which consequently may have an indirect effect on real estate value. The spatial distribution of virtual assets challenges property borders and brings up concepts such as virtual land rights. With Pokemon Go, there have been numerous cases of players trespassing private and federal property in the US in order to assess the in-game assets. Consequently, Niantic faced lawsuits and in 2019 started placing in-game assets 130 feet away from the property lines. A similar case occurred in 2017 when Snapchat collaborated with Jeff Koons to develop an AR sculpture in NYC, which was “vandalized” by artist Sebastian Errazuriz, who built a graffiti-bombed version of the same sculpture located at the same spot. By doing so, the artist raised the question of virtual public space rights, and questioned the possibility of tech corporations to appropriate it at no cost.
In another case of artistic use of AR, the art pieces become tourist attractions and landmarks for the city. For example, in [Ar]twalk, made by Apple in collaboration with the New Museum, several famous artists installed their pieces in NYC to be seen with the general public. In 2019, a street art artist KAWS located his pieces in 10 global capitals, and also is offering personal AR art for sale.
- What is the value of virtual real estate?
Lastly, we consider the value of virtual environments and virtual assets that operate as purely fictional digital spaces and goods. This is particularly relevant in the current context of Covid-19, as more of our lives have been shifted online for both work and play.
A Virtual world is any online, social, persistent ( meaning that the world is online and exists independently from the users accessing and interacting with it) three-dimensional environment such as MMO, MMORPGs, sandbox or social virtual worlds. They can be in VR or desktop-based. Examples of virtual worlds include Fortnite, World of Warcraft, Second Life, Decentraland or recently launched Facebook Horizon. Perceived as “third spaces”, these virtual worlds are ultimately an opportunity for people to interact and socialize remotely, while not being limited by crowd numbers. In fact, Travis Scott’s April 2020 concert and EDM DJ Marshmello’s February 2019 concert both took place in Fortnite and accumulated over 10 million people in the audience in real time.
Beyond serving as a gathering and an event space, virtual worlds can be markets for virtual goods and virtual real estate. Players are not only buying items from game developer companies, but also trade items with each other, and this secondary market of digital goods is sprawling. There are in-world currencies, which in some cases can be exchanged for cash, and these worlds are spatially and intentionally designed by the developer/publisher companies or by the players themselves. Minecraft, creative mode in Fortnite, Second Life and Decentraland are evidence of this.
To extend the cases with examples which use wearable devices, we can see the recent growth in social VR environments such as Microsoft’s AltspaceVR, VRChat and Facebook Horizon, which is at the moment in the beta testing phase. Alongside with being a social hangout, Altspace VR at the moment provides a space for VR conferences and meetups. These spaces redefine social norms and spatial interaction between people, expand interaction vocabulary and have a capacity to become one of the types of the social space we use every day, like clubs or public plazas.
As gaming and extended reality companies are building technologies that find their application in the AEC and Real Estate,we can trace the emergence of new tools that contribute to the industry, expand our understanding of it and challenge what is possible. More and more tools, applications and devices enter the market that redefine the relationship between physical space and the virtual. AR and VR-driven tools bridge the gaps between different stakeholders in the design, development and construction process, and help to shape the discussion as well as implement project changes swiftly. Digital Twins help for building and urban space maintenance and support. AR applications can become wayfinding tools and interfaces between a building, a tenant-organisation and a customer. Moreover, as more and more virtual environments increasingly become social spaces and places with vibrant economic activity, and more and more AR assets are geolocated, virtual goods and places become increasingly culturally, socially and economically valuable.
If you want to learn more about the project (un)Real Estate please check out our medium posts and podcasts in which we focus on online digital games and virtual worlds. We are working on more research and discussions of the intersection between real estate, XR and virtual worlds. Stay tuned!