Location-Based Virtual Reality Is Growing: How Big Is the Potential Market?

The latest experiences allow consumers to skydive over Hawaii or fight Aliens from the Fox franchise.
Courtesy of iFly
The iFly VR Flight Experience

Location-based virtual reality experiences are popping up with increasing frequency.

Just this week, iFly indoor skydiving centers started offering VR goggles (built into their helmets) to allow customers to sail over locations including Hawaii, San Diego or Dubai — rather than seeing the wind tunnel during their experience. This will be available at iFly's 28 locations in the U.S., including at Universal’s City Walk in Los Angeles. It's a $20-30 add on to the flight cost, roughly $70 for two dives.

Also in recent weeks, Fox entered the location-based VR entertainment business with its Alien: Descent, a free-roaming VR experience created by FoxNext Destinations that opened at The Outlets at Orange in Orange County, California ($20 entry fee), while location-based VR startup The Void debuted its newest location at The Grand Canal Shoppes in The Venetian and The Palazzo Hotel in Las Vegas, starting with Star Wars: Secrets of the Empire from ILMxLAB ($30).

With VR for the home not growing as fast as many would have liked, VR stakeholders have concluded that location-based entertainment is the way to jump-start the business. Greenlight Ventures even projects that location-based VR experiences will be a billion-dollar business by the end of the year and grow to $12 billion annually in five years.

"The most important thing for location-based entertainment is you have to give people something they can't get at home in order to get the price point," says Brooks Brown, global director and vp at Starbreeze Studios, which is currently looking to open its new Hero VR experience that puts the viewer in Syria during a bombing.

The animated experience uses motion platforms (the floor shakes during the attack) and 4D effects including heat (when you walk near flames) and wind (a blast at the point of the explosion). Starbreeze also teamed with DTS and is using DTS' immersive sound system to create an involving sonic experience without the use of headphones.

Other VR installations rely on motion seats (Starbreeze's The Mummy VR Experience) and props such as guns (i.e. players will use these to fight off Stormtroopers in Star Wars: Secrets of the Empire). And an increasing number are multiplayer, enabling more social experiences for groups (Alien: Descent).

In the case of iFly, a wind tunnel is used. CEO Dave Kirchhoff says the company is looking to tap VR for additional aerial sports at its locations.

The Void is looking to keep its locations fresh by introducing new VR experiences every few months, according to CEO Cliff Plumer.

Michael Yang, managing director at Comcast Ventures, cautions that expectations for the budding market need to be reasonable. "The home market is growing, just not as fast as people would have liked," he says. "Then there was this knee-jerk reaction that [location-based VR] was the panacea that was going to solve everything. My concern with elevated expectations is that [next year] they will be disappointed."

The exec warned that location-based entertainment is a different business compared with home entertainment. "You have to understand real estate, driving foot traffic, managing a staff," says Yang.

But he does believe in the market. In fact, Comcast is an investor in location-based entertainment company Spaces, and Yang serves on its board.

Spaces' current initiatives includes developing a multiplayer experience that could accommodate up to 100 people at once, for the theme-park unit of China-based Songcheng, as part of a $30 million commercial partnership. (Songcheng is also a Spaces investor.)

The company also recently landed a VR deal with Cinemark, but at press time had not revealed details.

Spaces co-founder and CEO Shiraz Akmal, a Dreamworks Animation alum, emphasizes that "our job — for everyone trying to grow this market — is to make sure everyone has a great experience. Jeffrey Katzenberg would always say, 'I don’t care what the technology is; I care that fans have a great experience.'"

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