Virtual Reality was everywhere in 2016 garnering space at industry tradeshows and shows dedicated to VR enthusiasts and opportunists. Promising emerging technologies always thrive at tradeshows early on. While most of the investments and product announcements have been focused on the consumer, the LBE market has been steadily building momentum. Here are 5 reasons 2017 will be the year of LBE VR.
- Lowest Price to Try
The investment for a consumer to own their own in-home VR system ranges from $800 for mobile VR (driven by a high-end phone) to $2000 and higher for an Oculus or Vive setup depending upon the computer. That does not include the cost of VR games. In contrast, you can experience VR at an increasing number of venues for $5 to $50 depending upon the experience. There is a long history of out-of-home entertainment that draws in visitors from near and far to have fun doing something they could not otherwise afford to do in their own home. We are entering Arcade 2.0.
- Custom Experiences Not Available at Home
Theme parks, arcades and family entertainment centers seek differentiation and a competitive advantage through their unique entertainment offerings. Attractions go well beyond consumer VR as the experience must be compelling enough to draw in customers and robust enough to withstand constant public use. As was evidenced with the recent Halloween Horror Nights experience, The Repository, VR can be combined with physical environments, special effects like wind and heat, live actors, full sets and intriguing narratives to create one-of-a-kind attractions.
- Larger Customer Base
While certainly not every visitor to a theme park or arcade will try VR, an increasing number will. Theme parks in the US alone attract more than 375 million visitors annually with one in four Americans stating they have visited a theme park in the past year. Dedicated VR attractions and retrofitted VR rides like roller coasters are springing up like wildfire in parks all over the world.
In contrast, by industry estimates, globally fewer than 2 million combined units were sold of the top 3 major premium VR consumer platforms in 2016 and while millions of mobile VR units have been given away or sold, one time or very occasional use is more common than regular use. These numbers are well below early forecasts as consumer VR continues to face many obstacles.
- Studios Need ROI
Millions of dollars have been invested in developing consumer VR games in the last 18 months, but the ROI (Return on Investment) has not materialized. Attractively, the same VR assets can be monetized in the LBE market, increasing the ROI and potentially drawing in a completely different market base of those who are interested in and curious about VR, but not willing or able to buy a home system.
- Land and Expand
The more strategic participants in the consumer VR ecosystem view LBE as a means to ultimately increase the consumer uptake of VR. VR has the potential to offer applications well beyond gaming – to become a technology used by the entire household like the PC and Smartphone. Education, Training, Healthcare, Social and Virtual Travel are among the applications gaining attention. LBE allows non-gamers to be exposed to VR in a low cost and simple way which is critical because VR has to be experienced to be understood.
While those firmly entrenched in consumer VR gaming investments are feeling the pressure to demonstrate promised success, many are actively expanding their market view to include non-gaming applications and Location Based Entertainment (LBE) as a means to finally push VR past the point of no return.