Commentary

LBE rebound takes hold, driven by virtual reality

Reports from various entities indicate that 2021 has seen more than a 30% increase in the post-COVID market, with innovation, unique content and strong business models defining this growth.

Image provided by iStock.

September 27, 2021 by Kevin Williams

After the seemingly endless privations of lockdown, some positive reports have started to appear that show light at the end of the tunnel.

A compilation of reports from various entities indicates that 2021 has seen more than a 30% increase in the post-COVID market, with innovation, unique content and strong business models defining this growth.

The stark situation that faced machine operators walking into last year's lockdown cannot be underestimated, and we are lucky that we can look back at what must have been incredibly difficult situations for many developers.

Inowize — developers of the "Arkadia VR Arena," a system distributed in North America by Attractions Products, experienced the decimation of player attendance in 2020 as lockdown hit followed by recovery in the 2021 attendance numbers.

Recover begins

Location based entertainment VR leader Hologate recently shared reports from its machine operated in the field. Through their cloud-monitoring, they have seen that figures are back to peak player numbers at 90,000 per week, as seen at the start of lockdown in March 2020, and back to this record amount March 2021, with still higher players numbers in June and then July.

Minority Media, another leading developer of enclosure VR platforms, has grown with the deployment of a licensed hardware solution based on the popular Transformers movie IP, a multi-player VR system, with different and entertaining games that build on the recognized movie universe.

MajorMega has seen success with the deployment of its Hypwerdeck immersive entertainment attraction at the Hershey Theme Park, with the installation of two of its four-player motion platform and physical effects virtual reality systems.

Virtuix, which recently raised additional investment, also revealed a resurgence of the LBE VR scene.

Venues operating the company's "Omni Arena" have seen a return to a $15,000-plus per month revenue. In addition, nearly 25% of the venues operational in March saw monthly revenues of more than $20,000, while three of the selected group achieved $40,000, according to Virtuix. This is a promising trend reflected by the VR platform, supported by the extensive use of competitive play through the company's e-sports tournament platform.

Escape rooms continue to grow

One of the emerging trends that was gaining momentum leading into the lockdown was that of VR escape gaming, and developers such as Ubisoft Escape Games and ARVI Labs are still seeing a considerable interest in their titles as the market re-emerges.

Since the beginning of 2021, SpringboardVR has seen steady week-over-week minute increases until March, as the market emerged from lockdown. Around that time, new restrictions had limited some geographic locations from having their VR arcades open.

Moving forward, usage of the service has started to pick up, with Europe reopening during May/June. VR venue visitors are eager for out-of-home entertainment, with the significant rise in minutes recorded through our active stations.

Difficulties continue for some

It has nonetheless been a difficult time for those operations that have had to service and support venues, especially during lockdown of business. It has been difficult to gain additional information from other providers in this field who are actively restructuring their business and assessing their prospects.

Gaining an idea of the impact of the crisis on the independent VR arcade scene has proven challenging — away from the data from the VR game distribution arms, there is a mentality of reserve from operators in this sphere.

Redline VR — an independent company and Chicago's first VR arcade and bar, shared data that vividly showed the impact of the closure, and the eventual reopen plans. With the reopening, the curve reflected the gradual return, and then continued to show growth, as the site owner revealed they are coming close to the best quarter ever, even without any corporate events.

Those venues that have seen a positive move towards audience support of the business, such as Redline VR, are in the envious position to capitalize on the pent-up hunger for social entertainment engendered by a long period in lockdown. How this will be reflected across other VR arcades in different territories is still being assessed.

It has been difficult for venue operators who are in locations and territories that were forced to execute more draconian lockdowns of businesses. One such operation that has had to weather difficult conditions was also the first operation to establish the modern VR arcade business approach: Ctrl V, based in Canada, which had to permanently close two of its 23 facilities.

The lack of governmental support for tenants saw the first permanent closures by the company in August 2020. But, slowly, operations in the entertainment sector are reopening in some Canadian provinces — with the first two Ctrl V sites opening in June.

Within this crippling period of enforced lockdown something had to give, and while Ctrl V was able to establish a plan to reopen its remaining 13 facilities, the company had to bite the bullet on yet another location. This saw the Howell facility, one of the early sites opened back in 2017, added to the list of permanently shuttered venues — to allow the business to focus on the current 12 most profitable sites of the franchise.

This is a hard blow, as the venue is a victim of the business conditions rather than its success as an entertainment site.

The Ctrl V team expects the results from the first of its reopenings will point to a positive return, reflecting what has already started to be seen in the cinema sector.

(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.)

Music & Games

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.

Connect with Kevin: