TSR Newsletter | July 19, 2021 |
-- The Stinger Report: Service Message -- |
The Global Digital Out-Of-Home Entertainment (DOE) Sector covered in The Stinger Report .
Wishing all our subscribers, famlies, loved ones, (and those serving) stay safe and well.
Kevin Williams
Publisher, The Stinger Report (TSR)
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Reality on the Resurging LBE VR Audience!
Part 1 | # 1079
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In The Stinger Report #1079 – This issue covers in detail:
1. [BREAKING NEWS] Exclusive breaking news of the actual revenue generated from the reopening VR amusement business, with a selection of leading providers supplying the reality of these moves in this first part.
2. [TRENDING NEWS] Tethered VR machine operation revealed from HOLOGATE, Minority Media, and Inowize, with key indicators that their returning audience has started and and overview of their unique needs.
3. [TRENDING NEWS] Meanwhile, VR enclosure developers MajorMega and Virtuix also share data on the rebounding attendance, and how the breakdown of the operations are seeing the new spend.
4. [TRENDING NEWS] The driving of content and management software to enable to re-emergence of the business is revealed by industry leaders SpringboardVR and SynathisisVR – revealing the return of the player base.
….and much, much more!
- The Stinger Report, published by KWP and its director, Kevin Williams, is the leading interactive Out-of-Home Entertainment news-and-views resource, covering the immersive frontier and beyond.
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With one of the largest and most comprehensive collections of actual data on the market, The Stinger Report has amassed a collection of graphs and reports from those at the coalface of the immersive entertainment landscape. This first part of the report covers the realities of the market as it re-emerges from lockdown, and reports on the actual business being generated by the returning audience. |
- Defining The Resurgence
There have been other green shouts sprouting in the entertainment garden. After such a harsh winter, and the privations of lockdown, some positive reports have started to appear that show light at the end of the tunnel.
LBE VR leader HOLOGATE recently shared with the industry reports from their 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. Going on to then see a new record achieved, with higher players numbers entering June and then July. This gives a great snapshot of the growth in popularity of the company’s VR platform with the returning audience, and it was this disclosure that fuelled the idea behind compiling this feature.
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What have been defined as Enclosure VR platforms were a major part of the momentum in establishing VR as a considerable investment into this genre. Another of the leading developers of such platforms is Minority Media, and the company has grown its platform (‘Chaos Jump’) with the deployment of a licensed hardware solution based on the popular Transformers movie IP. This is a multi-player VR system, with different and entertaining games that build on the recognized movie universe.
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We are lucky that Minority Media was prepared to share this insightful information which illustrates the “dead period” that was represented by the lockdown of the market across their multiple facility deployments, but also the same graph illustrates the considerable growth as momentum returned to the business. The next phase, post January 2021 is the growing momentum of the market exploding with a 32-percent increase in the post-COVID market. Innovation, unique content, and a strong business model are 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. This is graphically illustrated by Inowize – developers of the ‘Arkadia VR Arena’ (a system distributed in North America by Attractions Products). The company has been incredibly generous in sharing the “before and after” picture of business, seeing the decimation of player attendance in 2020 as lockdown hit (in blue), and the green shoots of recovery in the 2021 attendance numbers (in red), that also reveals the growth in player numbers, being charted across the sector.
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The need to ensure the placement of the right product into the market with the operators that can best benefit from the unique offering of amusement attractions of these kinds has focused the thinking of many. One of those with a new focus on the market is MajorMega. We have already covered their unique ‘HYPERDECK’ immersive entertainment attraction in The Stinger Report, and the company has seen success with the deployment of the system at the Hershey Theme Park, with the installation of two of its four-player motion platform and physical effects virtual reality systems. The company supplied this graph to illustrate the total play numbers over the past few months, across all-of the units in the US “turning back on”. The company has also just announced a partnership with Creative Works, to represent the current and new fleet of products.
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One of those VR companies that personifies the investment in new technology, as well as a crossover between investment in consumer VR and the innovations made in commercial deployment, is Virtuix. The company recently raised additional investment (as covered in The Stinger Report), but also was able to reveal the actual resurgence of the LBE VR scene witnessed through their platform.
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As seen through this graph, venues operating the ‘Omni Arena’ have seen a return to a $15,000+ per month revenue. Additional information states that nearly 25-percent 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 eSports tournament platform.
One of the interesting dynamics from the statistics collected and provided by Virtuix, is the locations that were seeing the largest amount of play during the time of the returning audience. A general observation of the data would suggest, from the last slide, that the continued closure and capacity cap on movie theaters was reflected in performance from CEC (Cinema Entertainment Center). Go-Karting also saw an amazing jump in returning players. Virtuix has some 500 commercial venues operating their system, although obviously these numbers are impacted.
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It has been difficult for many manufacturers, and some are now favoring the restructuring of their operations to be better aligned for the returning audience. As we reported previously, partnerships are a growing trend. Manufacturer Box Blaster recently announced a partnership with Benchmark Games, to release a VR ticket redemption system aimed at a younger audience. 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.
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The ability to see the actual numbers and play data is a legacy of the development process in immersive entertainment. Gone the days of a coinbox counter, and now the industry depends on the analytics gathered from remote monitoring. It is this ability to see the customer data in real-time that separates the “doom-n-gloom” merchants making assumptions on operational stability.
The use of facility content distribution and management platforms has been redefined by the VR arcade scene – comprising a large independent operator base, the use of these platforms have come into their own. The ability to have access to curated and licensed content for amusement deployment, along with facility management software tracking license fees and revenue generation, has proven a vital element to the success of so many venues.
One of the leaders in providing both curated software and facility management has been SynthesisVR. The company was kind enough to share with The Stinger Report a snapshot of the impact on business they saw during lockdown, but also the return of the market. The graph below shows the best illustration of the percentage of traffic through their system, and so through VR venues running their platform, from January to June of this year.
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Another leading provider of extensive licensed VR content for the VR arcade venue scene, as well as a dedicated management software platform for their operation, is SpringboardVR. The operation has recently been acquired by a new owner, Vertigo Games, another well-known provider of consumer and commercial entertainment VR content. Reflecting on the restructuring of the market, we are seeing acquisitions and mergers, and the operation was kind enough to give a rundown of what they had seen across their extensive network of facility users.
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, yet again, to pick up, with Europe reopening during May/June, as reflected in the graph. VR venue visitors are eager for Out-of-Home Entertainment, with the significant rise in minutes recorded through our active stations.
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It has 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. We had reached out to Private Label, VIVEPORT Arcade and Secret Location for addition information, but were unable to receive any replies from these companies.
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. We were lucky to have the veil lifted by Redline VR – an independent company and Chicago’s first VR arcade and bar. They shared data that vividly showed the impact of the closure, and the eventual reopen plans. With this 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.
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So significant are the numbers that they are influencing future planning, including doubling the size of the site later in the summer – and more importantly preparing for a theoretical third location and franchises. 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 log 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, had to permanently close two of its 23 facilities. With the Canadian government’s lockdowns, Canada is seeing some of the longest business lockdowns in the world and is still experiencing the impact. The lack of governmental support for tenants saw the first permanent closures by the company in August 2020. The latest lockdown started again in April 2021 and is looking at a late July reprieve. 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 stay optimistic, as they expect the results from the first of their reopenings will point to a positive return, reflecting what has already started to be seen in the cinema sector.
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This marks the end of the first part of this extensive two-part coverage. We thank all our subscribers and advertisers for their support, and the next part of this report will follow shortly.
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