To our Kickstarter supporters and HalfDive project supporters

Hello, this is Yamato Sakoda, CEO of Diver-X. On January 30th, Diver-X made the decision to withdraw from HalfDive’s Kickstarter (crowdfunding) project. First of all, we would like to t apologize for our sudden withdrawal and delay in disclosure of the withdrawal process to our supporters. (Since the project has been withdrawn, our supporters will not be charged.)

We have decided to cancel our Kickstarter project for the following three reasons. (We list below our reasons in order of impact on our Kickstarter project)

• Reason 1: Major change in product direction
  Through repeated hypothesis verification, we came to the conclusion that HalfDive’s current specifications were not the best way to realize our goals of "completing life in-bed" and "bringing together existing technologies to create a full-dive-like experience". (We positioned our Kickstarter project as part of our hypothesis verification as well.) Initially, HalfDive had two use-cases: (1) playing VR games in-bed and (2) working from bed. The VR HMD / game market is expanding at a steady pace annually. We are confident that VR in-bed will become the standard VR experience in the near future for reasons to be explained later, but it is currently only a niche experience method due to content and interface (control system) issues. We foresaw the instability in scaling(selling a sufficient amount of units or making enough profit) prior to launching HalfDive’s Kickstarter project, and we must admit this was a major element of concern. However, this did not lead us to giving up, and we tried to break out of our concern of being too “niche” by presenting a use-case which could be applied to a wider population, outside the boundaries of VR users who wanted to "work in-bed.” However, as we proceeded with development and user-interviews, we realized that the use-case we considered as “expanded” was still very niche, and on top of that a lack in functions to realize our use-case(We had invested in the wrong direction). To be more specific, it took us a significant amount of time and money to reach the fundamental fact that what mattered most to our potential users(who would use HalfDive in-bed) was not the video display system (HMD) but rather the interface system such as mouse pointing and text input. As a result, we narrowed down HalfDive's use-case solely to gaming. However, even as we were developing HalfDive for gaming purposes, we realized the need to significantly improve our interface more so than the video display in order to make the "in-bed VR-usage experience" a reality and standard. No matter how optimized and multifunctional our device may be for use in sleeping-posture, it is only a replacement of existing VR devices. We realized that it was the interface that would truly bring an innovative experience to our users, and we must admit we lacked the technology there. （This is why we decided it would be better to invest more in developing an interface and combining it with existing VR devices to achieve our goal. Gradually, we became skeptical of the current concept of HalfDive, our test-product, and its mass production.
• Reason 2: Immaturity of Diver-X’s organizational structure
  For financial reasons, we outsourced the design of key components such as optics and display, significantly influencing HalfDive’s character. As a result, we found out it would be extremely difficult to manufacture within an appropriate price range hardware components that meet our expected-quality In particular, the manufacturing cost of the optical system accounted for about half of HalfDive's cost, and was a bottleneck in its mass production. Lack of internal knowledge on major components significantly affected HalfDive’s specification review and ultimately led to an organizational situation inflating the cost.
• Reason 3: Cash flow problem
  Related to our organizational issue described above, we did not have enough cash flow to cover uprisings in cost and lack of optimal technical solutions. Even with support from our backers on Kickstarter and additional fundings, we were not in a financially stable position to make sufficient improvements, and we decided that proceeding into mass production at this point would most likely lead to bankruptcy and the worst case scenario of not being able to deliver our products to our supporters. Although we are not capable of entering mass production, we have enough funds to pull out and start over, and after much consideration reached the conclusion that it would be best for us and in the long-term our supporters as well that we return to focus solely on development.

Due to the three reasons described in detail above, we have decided that even if we continue with our Kickstarter project and receive your kind support, there is a high possibility that we will not be able to provide you with the experience that HalfDive claims to offer, complete production, and in the worst case, deliver our product to your hands, and lose your trust in us as a company.

The future of Diver-X and HalfDive

Despite the fact that we will be withdrawing from our Kickstarter project for now, we would like to emphasize here that we have not given up on our original goals of "completing life in-bed" and "bringing together existing technologies to create a full-dive-like experience". Our top priority is to improve our cash flow and organizational structure, which primarily led us to the cancellation of our Kickstarter project.

In the future, we will not only proceed with developing HalfDive and new products, but also conduct contract development. If you have any questions on prototyping / product design for hardware / software, we would be more than happy to hear from you.

Last but not least, we would like to sincerely thank all our supporters for their kind support throughout HalfDive's Kickstarter project, PR, and everything related to Diver-X.

Sincerely, The Diver-X team