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This week, we're seeing the high-stakes reality of the LBE market play out in real-time. While major players like Sandbox VR continue their aggressive expansion into the Canadian market and Fever brings historical immersion to the mall, the industry is also mourning the loss of Sony’s Wonderverse in Chicago. It’s a stark reminder that IP can’t save a bad concept.

Let's see who's leveling up and who's hitting the "exit" button.

"Who ya gonna call? Arcade Liquidators”

New Developments

FECs and Arcades

Sony’s Wonderverse Chicago Permanently Closes Its Doors 
The high-profile immersive entertainment experiment at Oakbrook Center officially ceased operations on December 22, 2025, to make way for an unannounced new concept. Read more on The VR Collective

The Titanic Sets Sail Again at The Florida Mall’s New Fever Hub 
Visitors can now explore the wreckage and opulence of the legendary ship through a 45-minute immersive VR experience called "Titanic: A Voyage Through Time." Read more on The VR Collective

Levels Brings a £4.6 Million Multi-Floor Digital Hub to Whitehaven 
A former furniture store has been transformed into a state-of-the-art gaming and training center featuring the North’s largest VR arcade alongside esports and motion capture spaces. Read more on The VR Collective

Arcadia Darlington Targets Early 2026 Opening Following Shipping Delays 
The town’s first dedicated gaming hub is now expected to launch in February or March, promising a mix of 360-degree VR, simulators, and a basement "rage room." Read more on The VR Collective

Sandbox VR Continues Canadian Growth with New Vaughan Location 
The global VR leader is opening its sixth Canadian venue today at the RioCan Colossus Centre, featuring four private rooms for full-body haptic experiences. Read more on The VR Collective

Interactive Experience Unleashed Lands in Myrtle Beach 
This new multi-attraction venue combines VR with laser tag, escape rooms, and STEM stations to create a family-focused entertainment destination on the South Carolina coast. Read more on The VR Collective

Landmark 81 SkyView Integrates VR into Vietnam’s Tallest Observation Deck 
The iconic Ho Chi Minh City skyscraper is now offering combo tickets that pair panoramic city views with immersive virtual reality gaming experiences. Read more on The VR Collective

Travel and Tourism

Is VR Finally Ready to Replace Physical Travel? 
New quantitative research suggests that travelers are increasingly accepting virtual reality as a viable substitute for physical trips, especially when perceived health risks or costs are high. Read more on The VR Collective

Machu Picchu Comes to the City with 4D Free-Roam Expedition 
The "Journey to the Lost City" experience uses photogrammetry and LiDAR to allow city-dwellers to hike the Incan citadel without the 7,000-mile flight to Peru. Read more on The VR Collective

Museums and Science Centers

Rakhigarhi Museum to Use VR to Resurrect the Harappan Era 
The world’s largest Indus Valley site is integrating immersive technology to help visitors visualize the massive ancient urban settlement in its prime. Read more on The VR Collective

The Met Launches "Dendur Decoded" Immersive VR Application 
A new collaboration with Atopia allows users to virtually explore the Temple of Dendur and the Arts of Oceania collection through high-resolution 3D scans and interactive storytelling. Read more on The VR Collective

LEXRA Member News

Verse Immersive Expands to 27 Locations with New Installs in Phoenix and Orlando

The augmented reality attraction developer is bringing its "Unreal Garden" and "Star Walk" experiences to Arizona and Florida through a new partnership with FEC operator FatCats. It’s also expanding into multiple locations with 801 Entertainment and Rebounderz. Read more on Verse Immersive

OTHER STUFF

Apple and NBA Launch Live Immersive Lakers Games for Vision Pro 
Basketball fans can now experience select Los Angeles Lakers games through a new 180-degree immersive broadcast featuring seven camera angles and spatial audio available on the Spectrum SportsNet and NBA apps. Read more on 9to5Mac

Retrocade Brings 80s Immersion to Vision Pro with Classic Arcade Cabinets Launching February 5 on Apple Arcade, the new Retrocade app allows Vision Pro users to place and play meticulously recreated 1980s arcade cabinets like Pac-Man and Galaga within their own physical space. Read more on AppleInsider

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One Big Thing

What Meta’s Reality Labs Layoffs Really Mean

VR as a consumer technology died this week. It’s been a long, slow, and painful death. 

For most of the last 5 years, whenever Meta announced how much it had burned building Reality Labs, the skeptics have called it the end of the metaverse. But what those people never seemed to understand was Meta’s strategy that led them to invest tens of billions of dollars in what is now certainly a dead end. 

Let’s start at the beginning. When Meta paid $3 billion to acquire Oculus in 2014, it was placing a bet that VR would become the computing platform. Meta was late to the mobile game, and Mark Zuckerberg, its founder and CEO, realized that as its users migrated from the web to mobile apps, they faced the potential for disintermediation by Apple and Google, which controlled the OS. 

Their acquisition of Oculus positioned them as the leader in this new computing paradigm. He believed that controlling the OS was existential for Meta (which was called Facebook back then) 

Looking at the history of computing, Microsoft was the dominant player with DOS and Windows.  But they stumbled as computing moved to mobile, with Google Android and Apple iOS becoming the dominant operating systems. Microsoft tried with Windows OS, partnerships with Sony, and even its own attempt at making a phone with Zune. All failed miserably. 

Meta tried to enter the mobile market as well, but it was too late, and their Facebook phone flopped. Zuck was not going to make the same mistake again. So, in May 2019, Meta released the first standalone Quest headset. It was their shot at making the iPhone. 

At the iPhone launch, Steve Jobs teased the audience, saying they were going to release three groundbreaking products:

1. a widescreen iPod with touch controls, 

2. a revolutionary mobile phone, 

3. and a breakthrough internet communications device (which, funnily enough, received the least applause, but wound up changing the world.) 

The reason the iPhone was such a success is that it made the things we were already doing easier and better. We didn’t have to carry an iPod AND a phone. And we were no longer tethered to our PC to browse the web. iPhone gave us the entire internet in our pocket. 

Sure, there were smartphones before (if you can call them that) with mobile browsers. I had a Samsung Blackjack 2, which was the best of its age, and it absolutely sucked. iPhone made browsing the web on a phone almost magical. 

Meta, recognizing they needed to position the Quest so people would understand it, went after the console gaming market. They made the bet that gamers would trade immersion for ease of use. They lost that bet. 

The majority of the gaming market is casual. Most people play games for the same reason they watch TV or read a book - to distract themselves from reality. Consoles provide more than enough distraction, and you can have it in seconds. Sit down, pick up the controller, and start playing. No need to clear the furniture, or recalibrate your headset, or reset the guardian. Every time I went to use my Quest, it seemed to take from 15 minutes to half an hour, or more, before I was playing. IYKYK. 

So this week, Meta announced a 10% staff reduction at Reality Labs, resulting in about 1,500 people losing their jobs. But it wasn’t the size of the layoff; it was who was targeted. They shut down three leading game studios. 

• Twisted Pixel, which recently released Deadpool VR at $50 after three years of development. 

• Sanzaru, which released Asgard’s Wrath 2 last year, an RPG required 60-100 hours to complete,  for $60.

• Armature, whose last release came in 2021, when they ported Resident Evil 4 to Quest. 

They’re also no longer going to update the Supernatural fitness app, which they called "Peloton of VR” when they acquired it from Chris Milk for $400 million in 2021. 

Not surprisingly, they’ve left alone (for now) Beat Games, maker of the blockbuster Beat Saber, and Big Box, which makes Population One. Both of those are live service games that generate recurring revenue through regular updates, downloadable content, and in-game purchases. 

There’s no news about Camaflouj, makers of the Game of the Year award winner Arkham Shadow in 2024. Meta bundled it with Quest 3 units to help it get to 1 million users, but the market for $50-60 high-end games is extremely limited. Don’t be surprised if the studio is sold or spun off. 

These moves are an admission that VR is not becoming a mainstream gaming platform. It’s a niche gaming technology. There’s a hardcore PCVR gaming community that will be served by the new Valve Steam Frame. And free-to-play open world games like Gorilla Tag and Animal Company seem to be doing well, for now. 

The current narrative seems to center on this being Meta’s failure. While I have no love loss for Meta as a company, pinning the failure of virtual reality on them is like blaming farmers for the lack of popularity of brussels sprouts. Sure, Meta should have made the tech better and more user-friendly. And done a better job of retail distribution. But selling VR is one of the biggest challenges in marketing. Even Apple, perhaps the best marketing organization in tech, has also failed in that regard.

So where does that leave VR?

Virtual reality is not the next computing platform. The next computing platform is AI. XR technology will be the display technology for AI computing, when and where it needs a display. 

Traditional operating systems are going to become obsolete in a world when compute happens in the cloud, and the primary interface is voice. Agentic AI will replace the applications we use, making computing more efficient. Right now, applications are siloes. My spreadsheet doesn’t know what’s in my PowerPoint, and my PowerPoint doesn't know what’s in my database. As AI becomes more advanced, working across apps will feel like writing longhand letters or using a ten-key and a ledger. 

The demise of consumer VR is great news for location-based virtual reality. One of the comments I still hear from potential operators is “everybody is going to have VR at home.”  Well, I have news for you. That ain’t happening.

But for location-based immersive experiences, VR delivers the best return on investment of anything out there. Don’t believe me? Scroll back up to the news section and read the stories about Fever. They have more data on immersive experiences than any company in the world. They’re building free-roam VR attractions as fast as they can.

Stay immersed,

Bob

PS - If you’re in the consumer VR business and rethinking your place in the world, consider popping into LEXRA and checking out the LBEXR community. There’s an awful lot happening, and much of it is profitable. Just sayin.