Apple is designing a $300-500 VR headset that will act as a precursor for its more mainstream AR headset, Bloomberg reported. The "mostly VR" headset will have limited AR capabilities. It's expected to be released next year and compete with Facebook's Oculus and Sony's PlayStation VR.

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• The battery-powered, standalone headset is said to have a fabric exterior and be of a similar size to the Oculus Quest. It might feature more powerful chips than the M1 Apple Silicon processors, which are currently used in MacBooks. The Verge noted that Apple is also testing the ability to track hand movement and include software features like a virtual keyboard.
• Initial prototypes were too heavy and large for extended wear due to the headset's fan, which is meant to cool its internal processors. Its later-stage prototype, codenamed N301, could still be canceled, reports noted.
• Last year Apple acquired NextVR, which offers a VR video streaming service, for $100M. Apple also acquired Spaces, which provides a platform to create AR/VR based experiences for public locations, including theme parks and retail. Spaces shifted its focus to immersive VR headsets for virtual conferences after the beginning of the pandemic. 

Big Tech's AR/VR plans:

• Last September, Facebook announced its new VR headset Oculus Quest 2, priced at $299. The company also demoed the "infinite office" feature, which allows users to work in a virtual multi-screen environment built on the Oculus browser.
• During the Oculus Quest 2 launch, Facebook introduced the research endeavor Project Aria to build AR devices. CEO Mark Zuckerberg said that a lot of people are trying to take shortcuts when it comes to building AR glasses by "just showing some heads-up information." He added: "I call that 'putting an Apple Watch on your face.'"
• In June 2020, Google acquired smart glass manufacturer North to strengthen its ambient computing efforts. Microsoft also released its mixed-reality glasses Microsoft HoloLens 2, in 2019.

A version of this story first appeared in today's Inside Business.

Valve is developing more games following the success of last year’s "Half-Life: Alyx," president Gabe Newell confirmed. In an interview with New Zealand's 1 News, Newell said working on single-player games has "created a lot of momentum inside of the company to do more of that." He didn't say if the games would be in VR.

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• Newell didn't elaborate on what the new titles could be. He dismissed a rumor about a "Half-Life" title, allegedly codenamed Citadel, that could have possible VR support. "We have a bunch of code names – are you referring to a code name? I don't know what 'Citadel' is," he said.
• Valve released its Index VR headset back in 2019. It faced shortages throughout 2020 due to the pandemic, in part because some of its components were manufactured in Wuhan, China, creating very high demand as other tech companies scrambled to compete for parts, he said.
• "Everybody ended up running into the same problem simultaneously – you go from, 'Oh, we're in great shape,' to, 'What do you mean Apple or Microsoft just bought the next two years' supply of this just so they could make sure they aren't going to run out?'" Newell said.
• Related: Valve was among the six video game publishers to be recently fined a collective €7.8 million (~$9.5 million) by the European Commission for geo-blocking cross-border game sales.

Bigscreen VR is now offering free, ad-supported movies on its VR app. The on-demand movies, hosted by PlutoTV, are available on the free app for SteamVR, Oculus Rift, and Oculus Quest.

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• Previously, Bigscreen has offered only paid movie rentals through the app, made possible through deals with Paramount and other studios.
• Now, free movies such as "Arrival," "Seabiscuit," "Clueless," and "Nacho Libre" are available through PlutoTV, though they're only accessible in the U.S. for now. More films are expected to be added every month.
• Bigscreen says it's working to add built-in YouTube support and integrate other streaming services down the road. It's also developing a "Friends System" and tech to allow large groups to "stream ultra-low latency video in VR.”

Musical instrument manufacturer Korg is planning to release a VR version of its electronic-music production app Gadget sometime this year. A short teaser video shows an Oculus Quest 2 user in the virtual studio environment, tinkering with Gadget’s drum machines, synthesizers, and other audio equipment.

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• Korg’s Gadget app is already available on iOS, Switch, and multiple other platforms.
• The company says it developed Gadget VR in partnership with Detune using the Unreal Engine. In addition to apparent Quest support, VRFocus said it expects a PC VR version of the app as well.
• Other VR music production titles include Virtuoso, Modulia Studio, and AliveinVR. As VRFocus notes, "Korg is going to be a major addition to this genre thanks to its impressive history."

VR game revenues rose by an estimated 25% in 2020, according to a new SuperData report. The increase, from $471M to $589M, is largely thanks to Valve’s "Half-Life: Alyx," which sold 1.9 million units in the first six months after it was released in March, the report notes.

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• Oculus Quest games were also a contributor. Back in May, Facebook announced that 10 of its Quest apps, including "Moss" and "Pistol Whip," had earned more than $2M in revenues.
• The launch of the Quest 2 in October also drove the standalone VR gaming category up by nearly 20%, the report said.
• The unavailability of some headsets, plus other issues, caused VR headset shipments to fall by 15% in 2020. The XR industry is currently worth an estimated $6.7B, according to SuperData.

QUICK HITS:

• How are companies deciding on privacy management solutions in 2021? This eGuide breaks it down.*
• UploadVR's David Jagneaux asked readers: Which non-VR games would you most want to play in VR? Some of the most popular were "Cyberpunk 2077," "GTA V," "Red Dead Redemption 2," and the "Mass Effect" series.
• U.S. President Joe Biden's inauguration committee introduced new Snapchat AR lenses yesterday, including one where users can place themselves with confetti and inaugural gear in front of the U.S. Capitol.
• A PS5 patch for "No Man’s Sky" will improve the game's performance and resolution in VR.
• U.K.-based Kuato Studios has raised £4.5M (~$6.1M) to help convert its educational games into VR.
• The Washington Technology Industry Association launched an XR accelerator program, with mentorships and curriculum to help 10 Canadian VR/AR startups expand into the U.S. market.
• Virtual Reality Times' Sam Ochanji takes a look at the new features/improvements, including a version of Microsoft Edge and a swipe-to-type keyboard, available in the latest HoloLens 2 update.
• Nexo manages $4B in assets and has over 1M users. See why fintech consumers are banking on crypto.*

*This is a sponsored post.

Tweet of the Day: VRChat's nobelchoco created a VR tour experience of this quaint Swiss town: