I think they made a mistake trying to go for a self-contained system - that's essentially a game console and launching that while staying profitable is next to impossible in today's market. All recent game consoles were loss leaders for a very long time. But that's armchair quarterbacking.
The problem is that it would have been a nightmare to support a PC based system with all the different kit out there, especially to get reliable low latency.
Jeri strongly felt it was important to get a good, fast out-of-the-box experience, and that was only ever going to be possible with a standalone system. They weren't going for bleeding-edge graphics performance as the resolution is limited by the projectors. I think they were basing was a fairly bog-standard Android phone/tablet chip with a small FPGA to manage splitting the video to the projectors and deal with the camera data, and a very cut-down and customised version of Android.
Although the initial plan was to do an ASIC, an FPGA vendor made them an offer they couldn't refuse with a new part that was targetted at MIPI applications, whjch was a good fit for the camera and projector interfacing.
They'd done some cool optics tricks to avoid the need for the IR beacon - I don't recall all the details from when she was telling me about it last year but I think it involved doing neat stuff with polarisation and different IR wavelengths.
My guess is deciding to effectively buy their own game studio to make custom games was a big drain on money - I wonder if a lower-key, much lower volume initial launch with a few games and all the tools to let people get developing might have been a lower risk approach. Or maybe they hit some hard technical issues.
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