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Video chat has become very useful in the age of the Internet, but it is still pretty clunky. With that in mind, the team at Rabbit took a step back to figure out how to reimagine video chat with your friends as if you were having isolated conversations with a few of them at a larger party. The result is a very interesting video chat app that lets you share anything — movies, music, photos, and more — with your friends.

rabbit stephanie morganI got to see a prototype of the service this week in a demo from Stephanie Morgan (pictured right), one of the four co-founders who hails from the video game and music industries. The app, which is in closed beta testing now and is scheduled to go live in early 2013, is aimed at shifting video chat from a utility to something fun, according to Morgan.

“We wanted to take a huge step away from how video chat has been approached,” she told VentureBeat. “We want to have a meaningful connection with people by doing things together with them. And we want to make this a fun and exciting space.”

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Rabbit has a very different feel to it than Google Hangouts or Skype. When you log in, you’ll have a choice of entering a variety of different conversations, which could be organized around any label. If you click on one, you will hear a mishmash of voices as if you just walking into a party at somebody’s house. You’ll see circles with the faces of people attending the online gathering. You can people-watch before you go in.

You’ll see them talking and moving their faces in real time. If you hover your mouse cursor over an image, you’ll get more details about the person. If someone is attached to several other circles, that means he is engaged in a conversation with them. You can click to join that conversation as long as it isn’t roped off as private. You’ll find that the sound changes to match the voices in the room. No longer will you hear the murmur of other people in the larger party. Then, you can chat.

rabbit small 2The team has paid close attention to the user interface design. Morgan says that the people are in circles instead of squares so that you don’t see the wall or room behind them. The focus is on the face of the person and what they’re talking about. The person doing the talking is positioned at the top of the screen, right near the webcam on your laptop, so that you can look at the camera at eye level. The other people in the conversation will see your face, and not your chin.

“When we looked at video chat, we found that it just wasn’t a social app,” said Greg Fischbach, co-founder of Rabbit and the former chief executive of video game pioneer Acclaim Entertainment, told VentureBeat.

Video isn’t easy to get right, particularly when people try to do it over low-quality wireless connections. Morgan said Rabbit’s technology will scale properly, and it has reduced bandwidth needs in part because it is peer-to-peer. Some of that technology comes from a good understanding of how massively multiplayer online games operate.

“We have no upper end on the number of rooms or the number of people in them,” said Morgan.

So you can talk with an unlimited number of people in your circle. But it’s ideal for a group of around six or seven people. Right now, it’s not easy to do simultaneous listening and talking in such groups in other applications.

By studying people, Morgan found that young folks like to stay connected on chat services such as Skype for hours at a time, leaving the line to a friend open while they multitask. It’s about spending time together, not just communicating a message and then leaving.

rabbit small 2Once you’re in the room with others, you can share anything with them. You can watch a movie together. This turns out to be very tough to do right. At the moment, Morgan says that the company’s research shows that friends are going to great lengths to watch a video on Netflix together. They do so by getting online and then synchronizing the moment when they both hit the “start” button on a movie.

With Rabbit, all you have to do is drag a YouTube or Hulu video into a room. And then everybody can enjoy and comment on it live, in real time. I’d like to see that part work because it sounds very cool. You can share your screen or just a section of it. And you can share links, music, photos, are more. If you are sharing something, you can make the images of your friends into an overlay so that you can still see them while you are moving files around on your computer.

“We make it effortless,” said Morgan.

Now, you don’t want to share unsolicited nude pictures of yourself. Rabbit hopes to get around the Chatroulette problem, where people anonymously engage in lewd behavior in one-on-one video chats. You have to log in via Facebook or something else that authenticates your real identity. If you do find yourself in a room that you want to leave, you can do it fast and fluidly.

Rabbit has an interesting look, and it’s no surprise given the video game pedigree of the founders. Morgan was formerly studio director at Hands-On Mobile and producer at mobile game firm Ngmoco. She spent 10 years in game and app development. The company is based in San Francisco.

rabbit small 3Philippe Clavel is the former chief technology officer of a game startup and the former technical director at Sony Online Entertainment and Hands-On Mobile. Fischbach is now an entrepreneur and early-stage investor. And Nicholas Reichenbach is chairman of Guestdriven and was executive vice president of publishing at Magmic Games.

When you create a room in Rabbit, you can give it a name like “the loneliest moment” or “thoughtful disaster.” You can set the rooms to public or private. You can set up a room to watch your favorite TV show together at a particular time every week.

Over time, the company plans to add other features. It is intrigued at the popularity of livestream sessions of video games in progress on sites such as Twitch, said Fischbach.

“The principles we’ve learned in video games definitely apply in this space,” he said.

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