At the Gaming Insiders Summit last week over 200 senior game industry people gathered to listen to talks about the state of the game industry and it’s future, as well as to network and make important business connections. The insights presented were interesting and sometimes controversial – Oculus is trying to create what it believes will be the next big technology in gaming, and Natural Motion strives for risky innovation. The [a]list daily was there to capture the details of this quest for the future of gaming.

Brendan Iribe, CEO of Oculus VR, took to the stage to talk about the progression of technology in the game industry and where it’s going next. “If you look at gaming, it’s usually hardware that drives content innovation,” said Iribe. He cited the advance of display hardware over time, from the Atari 2600 to the next-gen consoles coming to market soon, and noted the relentless improvement of game display from text to 2D sprites to 2.5D in Doom and finally full 3D, which has been refined over time with ever-increasing polygon counts and better rendering.

“In my mind we have really maximized what we can do with 3D graphics on today’s hardware,” said Iribe. “Mobile is a new piece of hardware, and it’s something that game developers have been able to jump on and make incredible content,” said Iribe. “But as far as immersion, it’s pretty small. We’re going from screens that are 20 or 30 inches, or TV screens that are 50 or 60 inches, and suddenly the most popular computing device out there is back down to five inches. The immersion level is lost. There’s a new level of content that’s about social, and sharing, and connectivity. It’s all important, but where do we go next with immersion ” As you would expect, he feels that VR is the Next Big Thing.

The challenges facing VR and the Oculus in particular are not trivial, and Iribe noted the obstacles they must overcome. “There are a lot of challenges,” Iribe acknowledged. “There are challenges on the hardware platform side, and there are challenges on the content side.” He noted user interface issues that need to be dealt with in the virtual world. “It has to be much more of a motion-picture style interface than what we’re used to in games,” Iribe said.

He noted that resolution of the screens is improving, as the Oculus VR has gone from 800×600 to 960×1020. “You can’t imagine what it’s gonna look like when it’s 4K resolution, and it’s not far away,” Iribe promised. Latency is now at 50 milliseconds, and he wants to get it down to 10 milliseconds or less.

Iribe did report progress on the important issue of simulator sickness. “I’ve gotten sick every time I’ve ever tried it,” revealed Iribe. “That’s a little challenging” for the CEO of the company. “Every time until recently. In the last couple of weeks I’ve tried a prototype internally where I did not get sick for the first time and I stayed in there for forty-five minutes,” Iribe said.

The CEO of mobile developer Natural Motion, Torsten Reil, talked about his company’s ascent to the top of the mobile game charts with titles like My Horse and CSR Racing. “We believe there’s an incredible opportunity to build the next big entertainment company in this industry,” said Reil. “There’s probably about a billion addressable devices and people that play games on them, and we feel that creates an amazing opportunity.”

Certainly Natural Motion has done well with its previous titles, making $12 million in the first month of CSR Racing, the #1 top-grossing mobile game of 2012. Reil’s company has learned some important lessons from their experiences. “The first thing is to invest in the product,” said Reil. “It’s something that’s really obvious to do but in many ways is non-trivial. We believe that on mobile devices, your product is your distribution strategy. The product is everything, and it drives absolutely everything, because this market is extremely competitive. Particularly with free-to-play, you have very little time to convince your audience that your product is the product they should download and they should keep playing.”

“You want to create an emotional connection between you and the player,” said Reil. “With CSR Racing, what that entails is to create cars that are so beautiful you almost could touch them. We obsessed about this, because we always imagined someone just taking out their phone and looking at their Audi R8. It needed to feel like owning the real thing. CSR Racing is a racing gaming, but actually it’s about car ownership.”

“The other thing that’s important is polish,” said Reil. “We polished the hell out of this game. CSR Racing was done in nine months, and we spent the next four months just polishing.” As an example, Reil described how Natural Motion went through 95 different icons for the game, testing them on millions of people, before settling on one icon that got the most clicks.

Polish is one of Natural Motion’s “guiding lights,” but that’s not all the company uses to chart its course. “The other guiding light is finding blue oceans,” said Reil. “We believe there is a big opportunity right now to find genres that have been under-exploited, or to entirely re-define genres. If you’re first into a market, you have that market to yourself. We felt that was the case with CSR Racing, in the very simple drag-racing genre. We’re now at 70 million downloads, and the large majority of them – about 90 percent – are all organic, and that’s something you have as an advantage as a first mover in a market.”

Reil feels that companies should take risks in innovation. “We really believe in taking risks,” said Reil. “We try and do the really hard stuff, because if you can do the hard stuff that creates real competitive advantage. Because when you take risks and go to blue oceans it creates an opportunity to create brands and franchises.”