Hero Zone’s acquisition of SPREE is shaking up the kids’ VR market, accelerating their entry into trampoline and adventure parks. Meanwhile, Zero Latency pushes deeper into Europe, Samsung hints at a September launch of an Android XR-powered headset, and Las Vegas’ Sphere edges into profitability (kind of - read the fine print). Add in fresh cultural and museum installs worldwide — plus the official launch of LEXRA membership — and it’s clear: location-based VR is scaling fast on every front. Read on…

"Kids VR just got a hot new babysitter”

New Developments

FECs and Arcades

Hero Zone Acquires SPREE, Rescues Millions in Operator Assets
Hero Zone has purchased the assets of SPREE Interactive out of administration, saving operators millions invested in kids’ VR systems and consolidating the family VR segment.
Read More on The VR Collective →

VR Arcade Scene Expands in Brittany
France’s Brittany region gets a new VR arcade, signaling steady growth for out-of-home entertainment in secondary markets. Can local venues thrive outside tourist hubs?
Read More on The VR Collective →

Sandbox VR Opens in Willingen, Germany
Sandbox is bringing its full-body VR adventures and exclusive games to Willingen, adding another notch to its European expansion. Will premium group VR scale faster in holiday destinations?
Read More on The VR Collective →

Phenomena Launches New Zombie VR Game
Phenomena is prepping a new zombie title, keeping one of VR’s most reliable genres alive and kicking for arcades.
Read More on InterGame →

Spawnpoint Announces Release Update
Spawnpoint has officially announced its latest release, expanding its immersive offerings and signaling momentum for indie developers in the LBE space.
Read More on LinkedIn →

Downloadable Theme Parks

Seattle’s DreamPark Carries Bushnell Legacy Forward
DreamPark in Ballard blends Nolan Bushnell’s pioneering spirit with Seattle’s appetite for immersive play. Could this be the blueprint for a new wave of tech-driven parks?
Read More on KING 5 →

Museums and Science Centers

Airborne Museum Takes Flight With New VR Adventure
Mass Virtual has partnered with the Airborne Museum in France to deliver a D-Day experience that drops visitors straight into World War II. Is VR becoming the default for military history?
Read More on The VR Collective →

Canadian Museum of Nature Adds Virtual Workshops
Canada’s national natural history museum is rolling out VR workshops to engage kids in science. Could hybrid digital-onsite programming become museums’ new business model?
Read More on The VR Collective →

Kelowna Brings the War Up Close With Immersive VR
A new exhibit in Kelowna, BC gives visitors a visceral look at World War I and II through VR storytelling. Will smaller regional museums leapfrog with immersive tech?
Read More on The VR Collective →

Art, Music, and Culture

AR/VR Contest Lights Up Nanjing’s Porcelain Tower
China’s Nanjing Porcelain Tower is hosting an AR/VR immersive design contest, drawing global creators into its cultural heritage. Could contests like this seed the next generation of location-based experiences?
Read More on The VR Collective →

Hangar Y Explores Matisse & Soulages Through VR
Hangar Y in Paris is turning modern art into immersive journeys with VR takes on Matisse and Soulages. Is this the model for making fine art more accessible to mass audiences?
Read More on The VR Collective →

Sphere Turns Corner on Profitability
Las Vegas’ Sphere reports it’s finally profitable thanks to a higher number of shows. Could this giant LED orb prove large-scale immersive venues are sustainable after all?
Read More on Las Vegas Review-Journal →

Zoos and Aquariums

Wild Explorer VR Debuts at Central Florida Zoo
The Central Florida Zoo is letting visitors explore exotic habitats through VR before meeting the animals in real life. Could immersive previews boost dwell time and ticket yield for attractions?
Read More on The VR Collective →

Technology

Samsung’s XR Headset Could Launch Sept. 29
Codenamed “Project Moohan,” Samsung’s new XR headset might land at a fraction of the Apple Vision Pro price. If true, it could reset consumer and LBE expectations.
Read More on XR Today →

Hauntify on Quest 3 Adds Laser Tag-Style Mapping
The haunted house game Hauntify now uses continuous scene meshing, letting real-world spaces become endlessly replayable. Could this tech migrate into arcades and pop-ups?
Read More on UploadVR →

Spatial Ops Gets Stability Boost With Pulse Protocol
Spatial Ops, the large-scale multiplayer shooter that’s got eyes on the LBE market, just added new tech for more stable tracking and smoother play in its consumer version. Is this the breakthrough free-roam VR needs on Quest?
Read More on Road to VR →

Got Questions about VR Tech? Join our Ask Me Anything with LEXPERTS (see what I did there?) Ben Woodford and Mitchell Poythress.

OTHER STUFF

Rec Room Cuts Half Its Staff
In a tough sign for social VR, Rec Room has laid off about 50% of its workforce. What does this mean for platform-based multiplayer worlds?
Read More on Road to VR →

What I’m Reading

One Big Thing

The LBVR Consolidation Continues

Last week, Hero Zone VR announced they’d purchased the free-roam system assets of Spree Interactive. This is the second (relatively) big acquisition in the location-based VR space this year. The first one, Synthesis VR buying Springboard VR, signaled the beginning of an overdue, and necessary, consolidation of companies making launchers. [Launchers are the software that hold and manage the content library. Kind of like a Netflix for VR games.) So, what does this newest acquisition tell us about the state of the industry? I’m glad you asked.

Last November, after the IAAPA conference in Orlando, I hosted a very expensive dinner at Vito’s Chop House (thankfully sponsored by HTC VIVE), with some of the leaders in the LBEVR business. One of the topics I discussed with the group was the need for consolidation. The market is highly fragmented; right now there are 34 different free roam launchers listed on the VR Collective website, and we don’t even have them all yet! I can’t imagine the market ever being big enough to support that many companies supplying similar solutions.

With so many companies vying for a relatively small market, it’s challenging for founders to make enough money to compensate for the time and effort they put into the business. Startups are hard, but many of these companies are going on a decade in the market, with little to show for it in the way of enterprise value. For comparison, I started Laser Storm in 1989, and within 6 years, with no outside investment, I had filed for an IPO at a market valuation in today’s dollars of $25 million.

Go Narrow or Go Home

[Disclosure: I served on the board of directors of Spree Interactive from late 2019, resigning near the end of 2022]

Spree was on a similar significant growth trajectory before the pandemic. We focused on a very narrow market, kids from 5-10 years old. I often advise companies to take this narrow strategy when starting out. It helps reach product market fit early because they're forced to intimately understand their customer. And with that knowledge, they can better communicate their product’s value to their core customer.

Spree used this strategy to grow fast within the trampoline park market, whose customers are primarily under 12 years old, and who were desperate to add technology that appeals to virtual natives. The team created short, simple, and active games that encouraged kids to run and jump around, fitting the ethos of trampoline parks. We landed the Urban Air account, and up until the pandemic, we were on pace to penetrate half their 250 targeted locations.

Spending Spree?

The pandemic hit everyone hard. Some companies with shaky foundations went bankrupt. The VOID never emerged. (Read 7 Reasons Why the VOID Failed - hard lessons learned). Sandbox VR successfully reorganized. Hologate successfully pivoted to Military and Police training after its Hologate World attempt at franchising failed. Most LBVR companies, however, just dug in and held on until things reopened.

Spree decided to try to expand within the LBE market, investing in virtual reality bumper cars (which Hero Zone did NOT acquire) and games for an older, teenage audience. They didn’t have the resources to do either well. Despite having penetrated less than 20% of Urban Air locations and having yet to gain traction with the other trampoline park brands, leadership distracted themselves with new markets, lost their momentum, and eventually were forced by their bank into receivership.

Focus Always Wins

Hero Zone, on the other hand, has stayed laser-focused on their core. They’ve been relentless in making their system reliable, updating their games with new features every 3 months. They maintain an active Discord with their customers, constantly engaging to deliver on their requests. They’ve slowly and steadily curated their catalog to cover new genres, but always staying within their core market of family-friendly games for arcades and FECs.

In their press release announcing the Spree acquisition, Hero Zone reported they’re now in over 500 locations, giving them the largest installed base of any multiplayer VR system ever (outside of China - I don’t report on the China market as I can’t get real data.) It will be interesting to see what games from the Spree library they decide to integrate, and if they can be successful holding onto and eventually expanding further into Urban Air and the broader trampoline market.

Earlier this year, Hero Zone announced a deal with Studio Canal of France to create Terminator: Uprising, their first game based on a blockbuster studio IP. I haven’t seen the game yet, as it will be unveiled at IAAPA in Barcelona in September. But based on this in-game render image, it should elevate the quality of what Hero Zone games look like.

The Battle for Number Two

Hero Zone is so far ahead of the competition in the compact, free-roam VR market segment that the question isn’t who can catch up, but rather who will solidify the number two and three positions. Because whoever is left after that is most likely an acquisition target for the leaders.

Here are the leaders in the different LBVR free-roam supplier segments, by number of locations (as best I can determine).

• Compact Free Roam Attraction: Hero Zone with about 500 locations.

• Free Roam Escape Rooms: vrCAVE (a founding member of LEXRA) is in over 250 locations.

• Non-Premium VR Franchise/Business Opportunity: Another World has 200: 130 in Russia, and 65 in other countries throughout Europe, Asia and North America. (Warpoint claims about 250, but most are in Russia and former Soviet countries.)

• Premium Free Roam Attraction: Zero Latency with 150+ locations, and expanding fast.

• Premium VR Franchise: Sandbox with about 65 locations and growing.

If I got any of these wrong or missed a segment, let me know. I didn’t include Synthesis + Springboard because they’re primarily room-scale, and it’s unclear how many of their locations are running free roam. BTW, if you want to sort by total revenue, I suspect you’d just reverse the order of this list.

If you’re in the market for VR in any of these categories, the best thing you can do is join LEXRA. I’ve worked closely with every one of these companies (except Sandbox) at some point in the last decade, and maintain close relationships with their most senior management. Being part of LEXRA lets everyone know you’re informed and to be taken seriously.

Stay immersed,

Bob

PS. For those of you following my adventure of building a VR attraction in Las Vegas, this weekend, we lost the location. Many of you in the operations business know what that’s like. Our concept was a bit edgy, and ultimately, the Casino we were going into felt like it might be a brand risk for them. So we are back to the drawing board. We might decide to go back with a different concept, or we might look for another location for the same concept. Dying to know what the concept is? Come to the PICO XR LEXRA Event in Barcelona. Once you get your tix, hit me up and I’ll try to arrange a demo.