Kevin Williams: LBVR is not dead, it is rising again

Hello Kevin, it is great to have you back on my blog! How’s life lately?

Things are hectic but fine. I count myself lucky that I am in the position that I am in, and have the type of clients that are looking forward rather than mired in the past. The need to define the new horizon is essential, and wishing for things to go back to normal is not the attitude needed at this time. So as a specialist consultant that works on futures, this is a very busy period.

Let’s go straight to the point: Covid has completely ruined the business for many LBVR venues: some companies (like Sandbox) have shut down, some others reported huge losses… Can you detail to us how the Covid has impacted the LBVR business?

As you would expect, hard data is a commodity that many are after, and sadly I have to keep this for our paying clients. But I can give you an overview. Lets split the international LBE VR sector into three core areas (North America, Europe/UAE, and Asia).

Asia was the first to get a grip on operating under post COVID measures and has seen the growth and the pain. The BANDAI NAMCO VR ZONE operation seems to have been decimated by this as well as other Tokyo VR venues. That said there is a regrowth in the deployment of VR in this market and it is not totally out with new venues opening and a new perspective of deployment.

The Europe and UAE markets have started to feel a second wave, but have seen a gradual reopening of business and are back to a 70% business. They have seen some amazing business post first wave (feeding off the “Stir Crazy” entertainment boom) and have also seen new LBE VR sites opening (see YULLBE as one example).

North American has been a mixed bag with State confusion. The market is at best 50% reopening, and we have seen the continued shutdown of California. This has impacted the like of Sandbox with their 80% staff layoffs, as well as The VOID with their internal difficulties. But those venues which reopened operating VR have seen attendance, and are dealing with the new capacity issues.

Note: for clarity, the description of this sector is Location-Based Entertainment VR (LBE VR). Using the term LBVR has a danger of being confused with the Location-Based VR market that is a general term for training, and simulation, the definition of entertainment shows this specific focus. The reason some use LBVR is they are only looking at commercial rather than the entertainment (or they are trying to make their articles unique!)

Many people, even many famous VR professionals (like John Carmack) think that LBVR is gone for good… what’s your point of view on it? Is LBVR dead?

Ah yes, “Location-based VR has probably taken a terminal hit…too bad!” [cit. JCarmack]

We are aware of the history of the former CTO of Oculus and his dealing with LBE VR, especially back in the 1990’s with the ‘Reality Rocket’. This will be the second time he has claimed the sector is dead, and I hope he gets many more opportunities to pontificate this view over the coming years probably.

Away from the wish-fulfillment views, the reality of LBE VR post-COVID is a nuanced one. The industry has always had hygiene at the top of our needs, as with the bowling industry (shoes), the go-kart (helmets), and the 3D theater (glasses) regarding cleaning. The LBE VR scene is pushing the use of UV-C to great effect, and our cleaning protocols (such as the HOLOGATE Standard) are deployed to keep guests safe. Protocols that some in other industries are now copying.

LBE VR has not been abandoned by the playing audience, as recent numbers from Virtuix showed they have seen a growing return to play VR at their systems with the return to reopening of sites. Likewise, the VR arcade scene has seen a gradual return as proven by Springboard VR’s recent numbers. It’s managing the return and gaining a better idea on the post-COVID audience needs that are driving the market. But obviously, if you have banked on creating a consumer VR ecosystem, any competition must be marginalized.

The deflection of talking about the demise of commercial VR is also being used by some to deflect from the increased discussion about consumer VR. The use in commercial of extensive hygiene and closed-cell foam, cleaning, etc., against the open cell and lack of a real hygiene usage guidance for consumer users is starting to have some wonder if home VR headsets sharing may be their own germ timebombs?

Do you have some objective numbers from independent analysts that can prove what you say, that is that LBVR is coming back?

Most of my research numbers stay with KWP and our clients and are not for public sharing, but the Virtuix and Springboard VR numbers are a good rule of thumb until my next big article in November where we will share wider market data.

Don’t you think that because of COVID, people won’t want to put a public headset on again?

We have the proof that people are prepared to put VR on again. I have reported on numerous opening of a new VR facility and there was strong interest (YULLBE, Mission to Mars, etc). It’s like saying after COVID people will not want to see 3D movies that need glasses, race go-karts because of shared helmets, restaurants where they share seating, and so on. The entertainment audience needs to see that things are safe and well operated and then they will decide. Attempt to say “all” people will say no is one of those views that sometimes have a hidden agenda behind it.

Do you remain confident even now that in Autumn/Winter there will be a 2nd wave of the virus? And what are your predictions for LBVR for the upcoming months?

For some territories they have not gotten over their first wave let alone a second.

I would say that I am resolute to the strength of the immersive out-of-home entertainment market to survive this and grow. I have seen even in the hardest parts of this Global Heath crisis a strength for the industry to grow, and as we see the changed landscape investors and developers work to look towards the future of the business. While the Winter period may be the hardest part of this process, I am confident that the industry and the VR element is still a part of the future of the business.

Regarding the sanitizations of headsets to guarantee the reduction of contagion to the minimum, what are the guidelines that LBVR owners have to follow?

The LBE VR industry has been following guidelines since we first deployed VR headsets in public entertainment back in the ’90s, but the reality for the post-COVID outbreak market has been magnified as all cleaning and hygiene are in the public space.

Most operators follow the same structure as outlined in the HOLOGATE protocol, with the wet wipe down of headsets, use of UV-C cleaning in other cases, and the ensuring of appropriate operation. The commercial entertainment deployment of headsets sees the use of covers, and resilient surfaces for cleaning medium. This is against the home systems, that are built for domestic use by one user and should not really be shared under the current conditions.

All entertainment venues have established hygiene standards for the operation of their facility and all the machines within them. There are issues of physical distances, cleaning between uses, and also the need to ensure that staff is also aware of the issues. Undertaken well and these protocols offer a safe and secure environment for the returning guests.

Aren’t you afraid that very cheap headsets like the Quest 2 could steal the thunder of LBVR because people can play VR at home? And why?

I seem to hear this turn of phrase allot. Back in the 1990’s it was “ain’t you afraid the new SEGA VR system will steal the market…” then in 2015, “ain’t you afraid the new Rift system will steal the market…”, then in 2016 “ain’t you afraid the new PSVR system will steal the market…”, and now its the Quest 2, after the same thing was said some twelve months ago about the Quest 1. I am happier to see VR and immersive entertainment gaining more recognition than for one platform to “steal” my market.

To be frank I look forward to seeing how the Quest 2 deals in a Standalone market that will have competition next year from the new Sony PSVR2, along with Pico, Panasonic, and Samsung Standalone systems without walled gardens. We will get to see if a closed ecosystem against an open development market will work, and how much the Facebook login issues will impact buying habits.

But as you know, I am in the commercial entertainment scene, and I focus on getting guests to leave their comfy homes and play at our facilities. The ability to have Free-Roaming VR experiences, the latest simulators, and performance that far surpasses what can be achieved on home VR systems (especially like the standalone platforms) is the focus of our development. I use the phrase “Unachievable@Home” when talking about the work we do.

With the number of new free-roam VR systems being launched in the coming months, it will be interesting to see if the consumer standalone VR developers will not try and “steal our thunder” to gain more recognition.

What are your pieces of advice to LBVR owners to survive this hard period? How an LBVR store manager can think thriving and succeeding in the next 12 months?

The LBE VR market comprises numerous kinds of facility owners from VR arcade, mixed-use entertainment venues, dedicated VR attractions, and many in-between. While there are different considerations for each, there are some general pieces of advice. The first is ensuring an operational plan, under the restrictions of the local authorities, but also ensuring staff and guest safety. The second is an operational plan for the use of the VR hardware on site, and a review structure to ensure things are working well. The need for good signage and information from staff to guests, and obviously a detailed marketing and promotion plan to ensure your guests know what is happening and how you and moving forward.

The famous LBVR companies like Sandbox and The Void seem all to be in crisis. Why? And what are the LBVR companies to keep an eye on now?

The VOID was already in difficulties before COVID lockdown. it seems like with AMC and other big entertainment operations the debt was magnified when the ticket tap was turned off for a period. For the VOID, I have a long and detailed article coming out looking at this and the other free-roaming operations that have fallen at this time. But to pick the key issues, depending on expensive IP to generate attendance, failing to offer a well-rounded entertainment experience, and having zero repeat visitation has proven the key issues. Once we know the situation with regards to Disney support of the VOID, and if the rumors are true, then we will know if they are going to survive.

The other free-roam LBE VR operations have all had to reinvent their business plan, such as SPACES moving into VR conferencing (and being acquired by Apple), or Dreamscape moving ahead earlier than planned with their edutainment platform. For Sandbox, and its extensive investment from China and needs to restructure after laying off staff and executives, we wait to see their pivot plans to address their shortfall.

What is your outlook for LBE VR in 5 years?

I envisage that LBE VR will be less about VR. The move towards more XR platforms in our sector has gained momentum, the use of new project mapping systems that can generate an immersive environment with a level of image quality far surpassing the current and future headsets is a strong draw, and also offer unencumbered immersion.

But towards the question, I still see the success of LBE VR systems like HOLOGATE, Virtual Rabbids, and Beat Saber Arcade continuing into the next few years, with enhancements and redevelopments. Already we see the launch of a new Star Wars Arcade game on the same platform used for Beat Saber which has drawn interest on test. We can expect to see more free-roaming entertainment systems, but not as single locations but as part of a mixed entertainment offering.

And that is the key element, LBE VR’s future will be as “part” of the entertainment mix, standing on its own legs to prove its worth to the already profitable entertainment venue business, rather than a magic bullet that needs no support. We will see in the next five years a brand new generation of Location-Based entertainment venues, and they will all depend on a level of immersion to draw the tech-savvy audience. And already we are seeing new technologies that will drive the next phase of entertainment.

What are your future plans instead?

As a specialist consultancy in this sector, I am working with investors on these new Location-Based entertainment venue concepts. I am working with developers of new LBE XR hardware to be deployed into the market. I am working on a new media service to get the message out to the industry, and also trying to hunt down the next generation of immersive technology. It’s not a matter of “instead”, it’s a continuation of business.

You must understand, I first started working with VR back in the ’90s, and then after a successful run in LBE, it died down but did not go away. This latest phase of deployment is as I said a “phase” (phase four), I look forward to the XR technology boom being a new phase. I follow the application, rather than banking on only one interpretation.

Anything else to add to this interview?

Thank you for the opportunity to discuss this fascinating aspect of the out-of-home entertainment market. If there are any questions I would be glad to answer them, and I would also recommend following my column in VRFocus (Virtual Arena) as we have news on the latest venues and platforms. Also for a more detailed look at the Out-of-Home scene, there is our news service (The Stinger Report). Email me directly and I will place you on the subscription list.