Building the Virtual World: Next Galaxy's Platform Play in Virtual Reality

WHITEFISH, MT / ACCESSWIRE / March 18, 2015 / The virtual reality gaming market is expected to grow at a 39.2% compound annual growth rate between 2013 and 2019, according to Transparency Market Research, creating an enormous almost $6 billion opportunity over the next five years. While gaming may seem like the obvious starting point for the breakthrough technology, Next Galaxy Corp. (PINKSHEETS:NXGA) is betting that the technology will revolutionize not only gaming but other high profile industries as well.

For example, the company recently signed a deal with the Miami Children's Hospital to develop educational virtual reality applications to teach medical concepts like CPR. The fully immersive nature of virtual reality makes it ideal for teaching many educational concepts. More recently, the company signed a deal with University of Kentucky basketball coach John Calipari to create a virtual reality sports channel focused on the highly-ranked coach and team.

The company's initial foray into the enterprise market, including educational virtual reality applications, is a great proof-of-concept and source of early revenue, while its sports and entertainment agreements lay the foundation for substantial long-term mass-market consumer potential. After all, even modest market penetration within the multi-billion dollar sports and entertainment industries could result in significant long-term revenue.

Netflix for Virtual Reality

These deals illustrate just a couple of the many broad applications for virtual reality technologies. Next Galaxy has set out to build a software platform to connect Facebook Inc.'s (NASDAQ: FB) Oculus Rift, Sony Corp.'s (NYSE:SNE) Morpheus, and other hardware technologies to these virtual reality experiences in much the same way that Netflix Inc. (NASDAQ:NFLX) provides a platform for online entertainment accessible through a variety of hardware providers, like Google Inc.'s (NASDAQ:GOOG) Chromecast, Inc.'s (NASDAQ:AMZN) Fire TV, or any number of smart televisions and set-top boxes.

The company's CEEK Platform simulates the experience of attending events, like concerts, sporting events, movies, or conferences through virtual reality. As the company puts it, the platform is designed to "build the meeting places of the future." Content providers will be able to leverage the platform to easily distribute and manage their virtual reality content, as well as monetize the content by selling virtual conference tickets or including virtual billboards.

While the virtual reality industry remains in its infancy, management plans on growing the demand side of its platform by focusing on mobile virtual reality applications on ubiquitous smartphones like Apple Inc.'s (NASDAQ:AAPL) iPhone and Google's Android. Google has already introduced the Google Cardboard project, which enables smartphone owners to construct a highly affordable cardboard virtual reality device for experiencing VR.

The company has also focused on building content partnerships, particularly in the sports and entertainment industries, to drive traffic to the platform at an early stage and foster the supply side of the platform. In combination with its cross-platform capabilities, these early stage partnership opportunities could help the company build a franchise early on before virtual reality becomes a lot more ubiquitous throughout society.

Branching into Hardware

Next Galaxy launched its next-generation CEEKARS 4D audio headset designed for virtual reality in September of last year. Unlike traditional headphones, CEEKARS enable virtual reality users to experience virtual sounds as they would in the real world, with concepts of distance and direction. The technology fulfills a key void in the market for an audio-focused solution to complement the visual-focused solutions currently in the market.

The company recently began an IndieGoGo campaign designed to create awareness for its CEEKARS headphones that has already generated a strong response from customers. The product has also received early and glowing praise from Tom's Hardware (a prominent computer peripherals review website).

In some ways, the move can be compared to the wearables revolution pioneered by companies like FitBit. These companies are primarily focused on creating a software platform for personalized health and monitoring, but release hardware products as a way to gain access to the consumer. With CEEKARS, Next Galaxy hopes to cross market its CEEK Platform, while simultaneously improving the user experience a great deal.

In addition to their internal plans for domestic distribution and sales of CEEKARS, the company is pursuing international avenues as well, including a business partnership with Annex Telecom Co., Ltd., one of South Korea's leading Mobile Virtual Network Operators with annual sales in excess of $1 billion. Annex Telecom will soon begin offering CEEKARS as a packaged product with a third-party VR headset to the distribution network.

Looking Ahead

Next Galaxy is uniquely positioned within the consumer virtual reality industry, with its CEEK Platform, CEEKARS headset, extensive R&D, and numerous partnerships. With plans already moving forward to drive the demand and supply side of the marketplace, management appears well positioned to drive near-term revenue ahead of its significant long-term potential. Still, its market capitalization stands at a very modest $11.5 million.

In addition to its operational progress, the company has positioned itself as a key opinion leader in the industry with its BIG Summit. These dynamics could help in the creation of partnerships on both the content (software) and technology (hardware) sides of the industry, while attracting the talent necessary to build the platform into something great.

President Mary Spiro summarizes the upcoming year well in her 2014 shareholder letter, "We expect 2015 to be a banner year for VR fans (which we are first and foremost), Next Galaxy and our shareholders as the Next Galaxy, CEEK and CEEKARS brands become synonymous with delightful fully immersive experiences."

For more information, visit the company's website at

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SOURCE: Emerging Growth LLC

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