In early 2017, Tractica published a report on enterprise virtual reality (VR) use cases in which we forecasted that enterprise VR hardware and content revenue would reach $9.2 billion by 2021. We have recalibrated that view 14 months later, as market conditions have slowed momentum somewhat. In a new report to be published soon, Tractica’s projections for total spending in 2021 are downgraded to $4.7 billion in 2021, nearly half of our 2017 projection. But that does not mean VR for enterprise will not succeed. Momentum is continuing. And while revenue for these comparable timeframes are smaller, Tractica believes the market for enterprise VR use cases will accelerate significantly between 2021 and 2023, nearly doubling total spending between 2021 and 2023.
In terms of impact on the 2021 forecast, the biggest change has been a significant reduction in spending for the location-based entertainment use case. In Tractica’s new report, the spending estimate for 2021 location-based entertainment has been cut by 69%. Interestingly, there is plenty of momentum for location-based entertainment VR. Amusement parks are rapidly retrofitting roller coasters for VR experiences. One vendor, VR Coaster, says it has equipped theme parks with VR in 19 countries. Tractica’s downgrade of the forecast is due to revised assumptions about the use of smartphone head-mounted displays (HMDs) in the use case. Below is an explanation of why VR for location-based entertainment is gaining traction.
Immersion Entertainment: A Perfect Fit for Amusement Parks
Immersion experiences and location-based entertainment are a perfect match and, increasingly, VR immersion experiences will become a key element for amusement parks, family entertainment centers, arcades, zoos, museums, and movie theaters. While premium-quality, home-based VR experiences will remain expensive and cumbersome for some time, entertainment venues are creating a wide range of professional-grade VR experiences, from enhanced exhibit museum tours and retrofitted roller coasters to customized, large-scale, and free-range VR adventures. VR experiences are attractive to most entertainment venues because of the lower cost of VR experiences compared to legacy physical rides and attractions. There are already hundreds of venues where consumers can go to engage in VR experiences, at both legacy venues and new ones around the world. The main challenges for VR in this sector are related to return on investment (ROI), including scale/throughput, hygiene, wear and tear/breakage, and quality of experience. While consumer-grade HMDs are the primary hardware for many entertainment venues, some, particularly theme parks, are developing customized, professional-grade HMDs. Legacy amusement park vendors, game and media studios, independent developers, and VR entertainment experience specialists make up a growing ecosystem specifically for the location-based entertainment.
Tractica estimates the addressable market for location-based entertainment VR to be more than 70,000 attraction venues worldwide. According to the International Association of Amusement Parks and Attractions (IAAPA) and a study by Wilkofsky Gruen Associates, these venues attract 934 million guests annually.
Location-based entertainment VR is also beginning to spread outside of traditional entertainment venues to retail shops and centers and businesses like fitness centers.
Amusement Parks Finding VR an Easy Retrofit
For amusement parks, adding media-based VR rides and elements is attractive given the low relative cost of VR in comparison to traditional amusement rides and games. Adding VR to roller coasters has proven to be popular with park patrons and park operators alike. Most parks are retrofitting existing coasters with VR content (such as various Six Flags attractions with content themes including Wonder Woman and Superman), but others are beginning to design VR roller coasters and other VR experiences from scratch, including:
- The Twilight movie-themed ride at Lionsgate Entertainment World (Hengqin, China, 2019)
- A waterproof VR waterslide experience at Galaxy Water Slide World (Erding, Germany)
- Final Fantasy-themed ride at Universal Studios-Japan developed by game developer Square Enix
- Korea’s Everland Resort, where you can choose from four different VR experiences, including Robot VR
- Disney’s free-ranging game, Star Wars-themed Secrets of the Empire
- Billion-dollar, built from scratch VR theme park in Guizhou, China, East Valley of Science and Fantasy
Robot Virtual Reality Ride, Everland Resort, Korea
(Source: Everland Resort)
East Valley of Science and Fantasy, Guizhou, China
(Source: Lonely Planet)
Entertainment Centers Expanding Globally
Standalone family entertainment centers, movie theaters, and malls are hosting permanent and touring VR entertainment experiences, including high-end free roaming experiences. In addition, there is a growing number of dedicated VR experience entertainment centers (THE VOID and Japan’s VR Zone Shinjuku). As with theme park VR experiences, most entertainment center VR experiences leverage well-known licensed content. Key venues include:
- IMAX: Seven centers around the world featuring 16 different VR experiences, including Nickelodeon’s Slime Zone, Star Wars Droid Repair Bay and Trials on Tatooine, and Justice League
- VR Zone Shinjuku: 40,000 square foot facility featuring 14 different VR experiences, including Ghost in The Shell developed by Bandai Namco and Mario Kart from Nintendo
Virtual Reality Gear for VR Zone Shinjuku
(Source: VR Zone Shinjuku)
- Dreamscape Immersive/AMC: Media company Dreamscape created a startup called Dreamscape Immersive, which has partnered with theater chain AMC to develop pop-up traveling VR experiences. The first, called Alien Zoo, debuted at AMC Westfield Century City LA in February 2018.
- Mayweather Boxing: VR train with Floyd Mayweather exclusively through licensed, Mayweather-affiliated gyms.