Commentary

Investment floods immersive entertainment enterprises, sowing the next 'Roaring 20s'

Immersive entertainment companies are finding little trouble securing capital for expansion as the COVID lockdowns end, positioning the industry for the next "Roaring Twenties."

Image courtesy of Rec Room.

May 24, 2021 by Kevin Williams

As developers position themselves for the business landscape post-COVID, investment has increased in the immersive entertainment industry. It is also obvious that a war has started towards capturing the high ground in the changed environment, post the business lockdown, with corporations and individuals with unimpacted financial capital looking to invest this towards giving them a dominant place at the industry table. This has also seen the creation of new corporations and partnerships to accelerate the process.

Rec Room raises $100 M

One sign was that the VR social gaming platform Rec Room had raised a sum of $100 million, led by Sequoia Capital, Madrona Venture Group and Index Ventures. Rec Room had been an early free-to-play multiplayer online VR game platform, started in 2016, and has an estimated 15 million lifetime users. This platform was valued in the raising at some $1.25 billion, illustrating the interest in the investment community for user-generated gaming platforms.

Next came the news that Virtuix, the VR omni directional platform and location based entertainment developer, had raised some $14 million from some 4,000 investors through the SpeedInvest crowdfunding platform. This will lead to the completion of the current round of investment that is hoped to raise as much as $15 million.

At the same time, industry motion systems specialist D-Box secured a $5.75 million public offering in the corporation, which is known for the use of its motion actuators on attraction hardware, ranging from Triotech, Major Mega and Backlight motion seat systems and full cinema seating adoption.

Pico Interactive, an emerging VR headset developer, announced it received some $37 million in Series-B investment from a group of corporates including Shenzhen Yidun Media Investment Fund, CCB International and others. The China-based technology provider has become well known for its own standalone VR headset, with interests in expanding its consumer facing products.

GameCo, known for its video game gambling machine, in March started a round of fundraising for an undisclosed sum to grow its e-sports betting aspirations. The fundraising is being led by corporations SpringOwl Asset Management and Playtech.

Parnterships emerge

The continuing investment into the immersive entertainment sphere was not lost on the manufacturers of new hardware, and the need to strengthen business positioning. A spate of new partnerships and representations also followed in the wake of the increased activity in the trade moving forward.

One of the big developments was the announcement that Major Mega, developer of the Hyperdeck VR platform and creator of several other soon-to-be-released concepts, had signed a far-reaching agreement with turnkey and custom attractions developer Creative Works.

Well known for its laser tag arena, mini golf, escape room and e-sports work, the company has also led the way in deploying the Hologate VR range of systems. Now, with a new agreement, Creative Works can expand its product line with new platforms and has signed an agreement to represent the Major Mega line in North America, including their latest developments.

Venues on the move

The new investment also included facilities looking to move from the lockdown conditions. Hollywood Bowl opened a stake of some 8.3%, representing some 13 million shares, towards raising some £30 million ($41 million). The bowling entertainment facility comprises of 60 venues across the U.K. and will use this funding to invest in new center opening opportunities and look at facility revenue plans, alongside possible new concepts.

In entertainment facility support services, Hownd, the foot traffic generating platform, acquired PoweredLocal, bringing new capabilities such as a mesh Wi-Fi solution provider for the corporation's users of the MyHownd Wi-Fi visitor secure facility connectivity.

The plan is to expand the ability to help merchants generate both foot traffic and revenue. As with the embracing of frictionless payment, the need for a dedicated customer relationship management platform is at the heart of driving leisure entertainment to the next level.

Competitive free-roam developer SandboxVR revealed that, following its own U.S. operations emergence from bankruptcy protection, it had now opened a new venue in Las Vegas. That new site is sitting in the previously occupied Void Grand Canal Shoppes at the Venetian hotel and casino location.

Specialization is rife regarding the possibilities of a massive growth in the leisure entertainment sector, as the global market emerges from the health crisis. In a prediction by the research company Technavio, it was proposed that the global amusement and theme park market will grow by $19.8 billion during the years 2020 to 2024, representing a 7% growth in the industry. This speculation mirrors other reports and observations in the media that expect a "Roaring '20s" style renaissance for the leisure entertainment sector as a "stir crazy" audience emerges globally from lockdown.

(Editor's note: Extracts from this blog are from recent coverage in The Stinger Report, published by KWP and its director, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)

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About Kevin Williams

Along with advisory positions with other entrants into the market he is founder and publisher of the Stinger Report, “a-must-read” e-zine for those working or investing in the amusement, attractions and entertainment industry. He is a prolific writer and provides regular news columns for main trade publications. He also travels the globe as a keynote speaker, moderator and panelist at numerous industry conferences and events. Author of “The Out-of-Home Immersive Entertainment Frontier: Expanding Interactive Boundaries in Leisure Facilities,” the only book on this aspect of the market, with the second edition scheduled for a 2023 release.

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