In the first of a two-part report observing the current immersive Out-of-Home entertainment scene for VRFocus, Kevin Williams‘ latest Virtual Arena looks at the re-emergence of LBE though the popular free-roaming entertainment trend. Evaluating the pitfalls, and the early fallers, and those operations that have re-opened and hope to define the next phase of business. 

While some pontificate that location-based VR has probably taken a terminal hit from COVID – at the same time we have reports on the reopening of venues in Asia and Europe and even America, and see the return of the audience, though in tentative numbers. One aspect of the successful growth of LBE VR before the ravishes of the global health crisis closed all forms of social interaction and entertainment, was the growth in interest of “Arena-Scale”, also dubbed “Free-Roaming” or in Asia “Walking Attractions”. Players donning powerful backpack PC’s and taking part in multi-player immersive experiences. The compelling nature of these experiences were such that major venture capitalists had vied to invest considerable sums in the early developers of this genre of immersive entertainment.

But even before the global-pandemic suspended business, cracks in the business proposition of some arena-scale operations had started to manifest. Gradually exiting lockdown and the issues that impacted some business plans has been magnified, and we start to see the damage inflicted by a loss of revenue. While some of these immersive operations are facing more permanent closures, others are seeing renewed interest in their offering and a new arms race to dominate what is still seen as a lucrative opportunity.

Seen as one of the first exponents of the concept of immersive, free-roaming experience – The VOID tantalized the investment and operations community with a dream of transporting groups of players into a magical virtual environment, (what the company labelled “Hyper-Reality”), powered by their claimed unique “redirected walking”, with physical effects and props. Seen as one of the prominent representations of the growth in interest in free-roaming immersive experiences – the company had high profile investment, initially from the Disney’s Accelerator fund, including business mentorship that saw development resource through ILMxLab.

The VOID has been heavily dependent on the development resources of ILMxLab for most of their content, with only Ghostbusters, and horror-experience Nicodemus developed internally (in partnership with Ninja Theory), receiving mixed reviews. It was however the draw of the big IP and crafted VR experiences based on blockbuster movies that drew the attention. Much of their hyped original design hardware would have to be scaled back to reverting to off the shelf hardware, such as their tracking system from OptiTrack or their headset, in reality, being made with components from an Oculus CV1 unit, eventually under license, (after a planned in house design was abandoned). The company at its hight operating some 17 facilities offering a selection of Walt Disney movie IP VR experiences. But the sites opened seemed to offer conflicting information on their actual success, and cracks started to appear.

The company had seen a churn in management, with the revolving door of top executives. Also, behind the scenes the operation had been haemorrhaging finances, plans for a permanent London site was abandoned near completion, and a total restructuring of the operation. Deals were signed with the shopping sector to place a new model of the attraction that was hoped to address the difficulties of audience retention. Things, however, had not gone as planned for The VOID operation, with numerous major executive departures and claimed venue expansion abandoned. Sources suggested that investments were being stretched and revenues were not proving as expected. By this time, the full impact of the global health crisis by March 2020, and all 17 VOID facilities had been at the time temporarily shuttered. But then things started to take a new turn, sources revealed information that one and then a second The VOID facilities on Walt Disney property had posted notices announcing their permanent closure and that all assets associated with Walt Disney were to be removed.

An incredible silence has enveloped an operation that was once so prolific at promotion – while the US venues remained closed, with no information at this time on what the situation of their reopening will be, with only the Malaysia (Genting) venues had reopened for business since August. The VOID Malaysia site had removed all their Disney themed experiences only offering ‘Nicodemus’ and ‘Ghostbusters: Dimension’. And that was all the information that could be garnered at this time. Many will try and paint this as a bigger problem with the free-roaming VR sector, there seems to be a pattern emerging from the initial operators that expensive IP and a problematic business model has been accentuated by the financial impact of the COVID Lockdown.   

There is another recent recipient of investment and mentorship from the Disney Accelerator fund that is based in the arena-scale VR sector. Japanese start-up Tyffon has opened their own Tyffonium – Magical-Reality Theater – a backpack VR experience centre. While less well-known than the other Disney Accelerator investment in VR attractions, the operation had developed internally three attractions which they operated in their two Japanese venues. Much more aimed at a theatrical, sensory experience, looking at young couples as a key demographic, offering three game experiences that support up to four VR players for 30-minute durations. The operation would go on to raise their Series A round of funding – added to the previous investment this saw the company valued at $12 million by the end of that year. With this investment, the operation had received publicity towards a plan to open in the US. By March of this year, the Japanese operation had entered lockdown, with plans for the US operation still on the drawing board, and their 35 employees furloughed, though the facilities did reopen by October.

Another of the early pioneers, wanting to carve out an empire for themselves was Dreamscape Immersive. Described as a “Virtual Reality Experience Like No Other”, the company took on a movie theatre style of approach to offering their unique platform – having amassed an impressive cadre of investment from powerhouses from the movie industry. Investors also included AMC and IMAX – cinema legends looking at the concept of LBE VR, to address flagging movie ticket revenue. Along with an impressive lobby presenting the VR experiences on offer like movies – the guests in groups of six would enter donning rooms, putting on their PC backpacks and wearing foot and hand tracking devices based on the Vicon system. Then once inside the VR room, would put on their headset (originally the Oculus Rift CV1, but later the company would migrate over to the HP Reverb platform) – the environment offering physical effects within the space that mirrored the high-quality virtual experience rendered for the players.

Dreamscapes’ facility operation had opened first in Los Angeles, as part of the Westfield Century City shopping mall in the shadow of an AMC theatre, in Dallas and Columbus, and then venturing to Dubai. This UAE-based location reopened in July and has seen strong returning audiences – proving the health of LBE VR post-COVID lockdown. October will see the US chain of stores also reopening. But following the upheaval in business following the health crisis the corporation revealed the acceleration of plans for a brand new initiative. Dreamscape Immersive, partnered with Arizona State University (ASU), to launch ‘Dreamscape Learn’. The concept is for “Immersive Education” avatar-driven VR experiences being offered to both campus-based and online courses; planning to start with introductory biology and eventually expanding throughout the sciences and beyond, (vetted by top professors and learning scientists).  The plan will utilize the immersive VR story lead experience of the VR company married to the educational platform for students and explorers to create a unique learning environment (immense VR “laboratory”) which will see virtual pods created to traverse students around virtual environments.

Numerous developers of arena-scale platforms had already started the process of redressing their business model to embrace new verticals. One of the front-runners in the development of IP based arena-scale VR experiences was the new operation SPACES. The company retained a wealth of experience having been spun out of DreamWorks Animation back in 2016. The corporation saw investment from Tencent and other leading players launched its first arena-scale platform with Terminator Salvation: Fight for the Future, opening the first permanent location in San Jose and then a temporary installation in partnership with Cinemark. Also, SPACES had signed agreements with SEGA JOYPOLIS to install its VR experience at their Japanese sites. The operation was in the process of redefining their offering following feedback as the global crisis hit, but its innovation continued, and pivoted during lockdown to create a ground-breaking VR based video conferencing product. The interest in this product was such that SPACES announced in August that the company had been acquired by tech-giant Apple, for an undisclosed sum.

Sandbox VR had been a prominent name in the LBE VR business, coming from a meteoric rise supported by the Alibaba Entrepreneurs Fund, and raising some $68m and $11m round of investment. With this investment, the operation focused on both improving the level of experience on offer, signing a licensing agreement to use major IP, such as releasing an experience based on ‘Star Trek: Discovery’. In total some 8 venues, split between Asian sites and their first few US locations, offering four-player backpack PC VR, using Oculus Rift CV1 headsets. But following the lockdown, Sandbox VR (Glostation USA Inc.) filed for Chapter 11 protection in August, this was on top of the previous announcement of the loss of their original CEO and 80-per-cent of their workforce. It was revealed that the company had started to reopen its venues, promoting new safety measures to ensure guests and staff post lockdown. The restructured management evaluating a plan of survival with the VR centre (single attraction) model.

While not getting the same publicity as other arena-scale installations in the West, one of the first VR ZONE free-roaming offerings developed by Bandai Namco and being shuttered at MAZARIA is Dragon Quest VR. Developed for the original VR ZONE brand back in 2018 the videogame is based on the popular RPG property, with four-player PC backpacks (HTC Vive headset) – it’s one of the few arena scale installations that use wholly unique player interfaces representing the shields, and swords of the game. This was not the only Arena Scale VR attraction Bandai Namco developed – with a Ghost In The Shell property, (‘Ghost In The Shell: Arise Stealth Hounds’) back in 2017. Going on from the closure of their MAZARIA facility, the corporation is reappraising its approach to VR and immersive entertainment, with new plans to be revealed soon that could see new free-roaming properties.

Other Japanese amusement factories that operate their own venues in the territory have been attempting to jump onto the arena scale bandwagon. CAPCOM with its PLAZA CAPCOM chain of sites has added the CAPCOM VR-X areas to their landscape, and with that created a unique arena-scale VR experience based off corporation owned IP. Biohazard: Valiant Raid (better known in the West as Resident Evil) launched last year, the four-player experiences negates the use of cumbersome backpack PC’s for a restricted player space using tethered HTC Vive headsets and customized controllers.

One of the largest of the Japanese amusement and gaming corporations is SEGA, and they have invested heavily into VR attractions for their facility business. Under the SEGA Joypolis VR chain, operated through CA SEGA JOYPOLIS (the co-Chinese and Japanese partnership), the company has deployed several third-party VR attractions. At this time SEGA’s amusement GM division has not created a unique VR platform of their own, favouring in representing other developers’ products as they evaluate the opportunities provided by this technology. The Asian market has seen the adoption of the term “Walking Attraction” when describing arena-scale VR experiences, the PC backpack offering freedom over tethered enclosures. Such operating systems include Mortal Blitz for Walking Attraction, developed by Skonec Entertainment. SEGA had also fielded the system from SPACES (as mentioned above), and later the Zero Latency free-roam experience in several Joypolis sites.

Zero Latency is one of the earliest to see the opportunity and unique compelling nature of free-roam VR entertainment. The company deploying their first facility in 2014, and then went on to establish and defined their unique up to eight-player immersive arena experiences, amassing a considerable library of seven popular games. Emerging from the global lockdown, the company has continued to plough a course in this sector. Developing their own backpack harnesses, haptic game controllers, along with the needs for appropriate briefing, loading, and unloading of players, staff training, all packaged in a franchisee offering operations have added to their entertainment venues. The company announced a major partnership to bring AAA content to their platform, Ubisoft – creator, publisher and distributor of interactive entertainment and services revealed that it would be bringing its million-selling consumer game license to VR with Far Cry VR: Dive into Insanity. This LBE VR experience for up to eight players takes them back to Rook Islands, the setting of‘Far Cry 3 for some intense action. Working in partnership to develop and implement their multi-player combative experience with Zero Latency, the game will be released across their 45 venues in 22 countries during 2021.

This concludes the first part of this extensive coverage; we will now look at the rest of the sector and the new entrants bouncing back into business after lockdown in the following coverage.