Content studios are increasingly developing a strategy for the out-of-home virtual reality marketplace. In fact, major industry stakeholders from Hollywood's big six film studios to upstart virtual reality studios are looking to create incremental revenue streams by opening their own VR arcades, retail storefronts, and other location-based entertainment (LBE) venues.

On February 9th, LA-based VR content studio Survios will open a VR Arcade in Torrance, California. Located in the Del Amo Fashion Center, the Survios Virtual Reality Arcade is the first physical location for the software creator and distributor, and could be considered an intriguing evolution for the location-based VR entertainment market.

If You Build It, They Will Come

Variety reported that the LBE center will provide Survios with both the ability to roll out its own new titles to a captive audience and the opportunity to test experiences in a controlled environment. The Torrance location will feature 11 glass-enclosed booths—known as a “Tesseract”—and take up just under 3,000 square-foot of space. Thanks to its glass walls and integrated throw projectors, the booth functions as a play arena and a viewing point for curious spectators, the news source said.

The latter makes the experience a lot more social.

Multiplayer Survios titles such as “Sprint Vector” and “Raw Data” will be reportedly available on-site, with the intention being to offer people the chance to experience and watch VR gameplay as a group. Each experience will last around 15 minutes and cost under $10, a business model that is slightly less than the standard $1 per minute of game play charged by a typical VR arcade.

“One of the misconceptions about virtual reality is that it is very isolating,” said Survios CFO Ben Kim, in an interview with The Beach Reporter. “You get the interaction with the environment, but also with the people playing in the bay next to you ... that's what Survios takes in account whenever we're developing anything. We want to ensure you have a social experience that's elevated.”

 Location-based VR Can Be Personalized

To date, Survios has partnered with hundreds of so-called Mom-and-Pop establishments around the world, which would support Kim’s recent claim that 85 percent of people who have experienced “Raw Data” did so in a location-based VR center. Survios has also recently announced that it has signed a deal with Sony Pictures Virtual Reality to bring “Jumanji: The VR Adventure” to the content studio’s distribution network, Variety reported.

Taking the above into account, the decision to open a standalone arcade in a "fashion mall"  is one that could bring location-based VR to a whole new audience. To put it simply, by opening its own VR arcade, Survios is looking to ensure the playability of its content isn't effected by the potential limitations of other venues.

Source: Survios

A constant source of conflict between venue operators, distributors and/or content studios is the lack of licensing standards, with very few arcade operators negotiating directly with content studios. Instead, venues will either download content directly from portals such as SteamVR and the HTC Viveport Arcade, both of which are popular licensing channels for content studios themselves.

Another reason for the current status quo in LBE is that there is also a dearth of must-have virtual reality content available to the venue operator. Experiences are still hit-and-miss and are dominated by first-person shooters or movie tie-ins. The long-term sustainability of VR as a profitable business venture for content studios and developers is also up for discussion, with an increasing number of developers turning their attention to augmented reality instead.

In fact, a recent game industry survey, cited by RoadtoVR, revealed that the majority of developers don’t expect VR to achieve a level of mass adoption anytime soon.

VR Content Needs The Right Showroom

On the flip side, there has undoubtedly been an increase in the number of VR-focused locations available to the average person, with hyper-reality providers such as Zero Latency, for instance, opening an average of one location per month. In addition, there is not only a healthy level of media interest around virtual reality experiences but also continued investment into VR by investors and enterprises, both of which indicate that VR is growing at a steady (if not spectacular) rate.

With that in mind, Survios’ branded arcade in SoCal could provide content studios with a business model that works as a testing-ground and shop-floor.

Granted, not every studio can create a custom-built pod to show off its immersive experiences in, say, a retail location, but the consensus is that location-based VR is more likely to turn the curious into evangelists. Content has always been the key to VR’s future, time will tell if Survios has found a relatively simple way to market its experiences to a larger audience.