Secrets of success in the location-based VR business
VR is regarded as the ‘native land’ of dreams and experiments that require both up-to-date solutions and investments. Once a freshly developed platform or game is discovered, it starts chasing one of the standout apps.
One of its areas, Location-Based VR (LBE), speaks volumes about how stunning VR can be. Overall, it is expected that the virtual reality market is going to worth $12, 324.7 Mn by 2027.
However, not so many people are fully aware of VR`s current prospects and how its future may unfold. And the bitter truth is the majority of development companies are not headed at creating a low-cost content for the average consumer.
In these circumstances, location-based entertainment appears to be a perfect match for anyone who ever wanted to start their business and direct it to VR. With some VR center being kept humming or the content appealing, you`ve got all chances to make your way in this sphere.
Let us give you a few examples. Wanting to launch new virtual reality centers in Tokyo, New York, and other cities, Sandbox VR, famous for its ‘Star Trek: Discovery’ and ‘Deadwood Mansion’, has raised a $68 million of funding from Andreesen Horowitz, Triplepoint Capital, Floodgate Ventures and elsewhere. The Void (‘Wreck-It Ralph’, ‘Star Wars: Secrets of the Empire’, ‘Ghostbusters: Dimensions’), another LB VR provider, has also benefited from Ruper Murdoch`s investments totaling to $20 million.
The number of squad-based content, as well as LBE itself, is growing day by day. Those experiences are spread globally: Sandbox VR – 4 countries with 6 locations, The Void – 4 countries and 16 locations, Zero Latency – 20 countries and 36 locations, Avatarico games – 28 countries with more than 100 locations, Holgate – 25 countries and 256 locations.
It seems like location-based VR is simply one more temporary substitute, something that comes and goes pulling down companies` ventures. True, some of them, unfortunately, are to face it (as IMAX, for instance), but others move forward.
There is no mystery why, just a clear business idea forecasting future expenses, current possibilities, and trustworthy partnerships, choosing the right place and content for your target audience.
We`ll note that location-based VR is rather brand-new, and there is a bunch of business models to investigate to appeal to users.
Who can be considered as your contemporary potential location based VR partner?
In the abstracts below, we`ve tried to get together the most renowned LBE companies for you not to spend hours collecting necessary data.
The company offers patrons unprecedented immersive gaming experience being completely untethered. To achieve that scale, Zero Latency`s equipment doesn’t come cheap.
A few years ago the company was considered to be a pioneer of free-roam virtual reality. Zero Latency has been listed among the top of the fastest-growing developers, therefore, it is being nearly impossible to trace. Say, for example, about its partnership with Vodafone or the latest free-roam experience ‘Sol Raiders’ bringing a competitive edge to e-sports.
Among the company`s basic lack one may track the specifics of its shooters and video games as not all users crave for weapon-based combats. Another deals with space-efficiency: 8 players require 2000 sq ft.
So, if you are about to open a VR center, it is far crucial to make calculations connected to the revenue per square feet beforehand. From the look of things, in case you`d like to attract your audience with shooters via opening a huge theme park with various free-roam experiences, these guys are your total hit.
Here we`ve got another big-name LB VR developer. Hologate`s significant part of the install base sets out in theme parks and centers, movie-theatres, mini-golf courses, casinos.
Concentrating on coherent top-end turnkey solutions, the company provides additional income when other agencies are enabling them.
More than that, though, Hologate has reached more than 2 million plays and the average ROI in the short span of the 8 months so far. It`s no wonder why it bears the name of the most flourishing global-scale VR multiplayer.
As a deal-breaker, again mind the content and product you are embarking on. Here space efficiency is a bit better but, still, there`s a chance for 4 users to participate at once. After all, you`d better come with the idea of big malls and a bunch of footprints.
The Void seems to go high since it became a part of Disney Accelerator. With big franchises like ‘Star Wars and Ralph’ and Disney park locations being opened, still, there is no word on franchises for entrepreneurs.
The latter may be regarded as a big loss, for sure. Its concept presupposes the use of hyper-reality also engaging a lot of building on site. Leveraging various headsets combination and suggesting motion tracking, haptics, and other built-in effects, the virtual reality experiences enable users to interact within a virtual environment and discover sets of settings.
Otherwise, if The Void decided to open a franchise opening the mutual venture would cost a fortune whereas a venture investor may benefit from such a partnership. That brings us back to the idea Disney hits the spot while it`s directed to big business.
Having experienced a so-called ‘nuclear winter’ and a period with no investments, Sandbox VR has risen to attract funds.
Involving hyper-reality being less operose that that of The Void, its business concept is thought to be clean cut. Such minor details as a real table to hide or a torch to grab and many other sophisticated features turn VR into an advanced space-efficient experience.
Nowadays, Sandbox VR`s treasure box comprises mostly shooters, but the good news is that they also in the search for family-oriented game solutions.
In reality, unfortunately, Sandbox VR doesn’t allow for a straightforward franchise. The developer seems to do everything by themselves since Andreessen Horowitz provided the investment.
Dwelling on out-of-doors VR experiences, one can`t but mention an escape game niche. Its business model demands grow stronger each year.
Avatarico seems to be one of the most efficient solutions in this area. The one that claimed to create a product featured on Forbes whilst having returned the very first funds in 6 months.
The most glaring difference is that their products are aimed at mass audiences. That list is made up of family-friendly content and the one suitable for corporate meetings.
While measuring the loyalty existing between a client and a provider, the developer has received a 50% Net Promoter Score comparable only to Netflix. Experiencing approximately 5 years of VR pioneering and 5 games being launched, any of Avatarico`s games require just 270 sq ft for 6 players.
When it comes to further prospects, the company has entered the USA, Canadian, Mexican, and Australian markets with Entermission being the distributor.
Gaining unique expertise in operational business and technology utilized, both Entermission and Avatarico look far ahead. For instance, Cosmos arms players with hand tracking system whereas one is sitting in a chair with hands bare and just some headsets being on. So, be ready that your hands are going to be the accurate functional copy to VR ones.
Such VR experience provides players with the feeling of floating in zero gravity, shooting fireballs, using telekinesis, and even hi-fiving your mates. And Entermission works on its empowering: at TransWorld’s Room Escape Show & Conference in Texas the company has unveiled the turnkey haptic solution also stimulation users with the wind, temperature, and scents
Tricks and tips to decide on the perfect business model
If you are inspired enough to bring up your location-based entertainment, you are to get the expertise in the following:
- VR content development,
- Ways out to appeal mass audience,
- Strategic thinking and marketing,
- Setting a scalable system blossoming together with your business and generating top-notch practices.
Minding the information presented, you`ll stay updated with the current market demands and ready to start your business or collaborate with a trustworthy technological LB VR partner. Opening a VR franchise or chain seems to be the next natural step.
However, there are other features that you shouldn`t overlook. LB VR gets the privilege of the high-end equipment usually presupposing VR headsets, backpacks, and a place for users` free VR locomotion.
The article we referred to the most promising LB VR companies to date. The ones that come up with off-the-shelf franchises and solutions. The huge part of the above-mentioned developers` success based on the thoughtful partnership.
Taking in both ups and downs, LBE continues on its path. To minimize loses you may freely rely on our tips and cautiously think on benefits and drawbacks before acting.
Anton Zaitsev, Avatarico CEO, AR / VR developer. His company was the first to develop a VR escape game for location-based entertainment. He has been dealing with VR technology for more than 6 years. He likes to share his experience in that sphere providing some useful tips for VR business success. He is always ready to help with any questions related to VR technology. You can contact him at firstname.lastname@example.org.