Introduction

The VR large space industry in 2024 is indeed showing strong growth, particularly with the focus on cultural and historical themes. While the sector is becoming crowded with similar content, the success of devices like PICO and the adoption of efficient “flow-style” operations are helping to push the industry forward. However, for long-term success, the industry will need to consistently deliver high-quality, engaging experiences that consumers find valuable and memorable. If this can be achieved, VR large spaces have the potential to reach a scale similar to traditional cinemas, opening up new avenues for immersive entertainment.

As a new entrant in the VR large space industry, we bring several key strengths to the table:

  • Strong Technical Team: Our team is highly skilled and capable, with a solid track record in both virtual reality and augmented reality hardware development.
  • Extensive Experience: We have successfully completed numerous VR projects, encompassing both software development and business arrangements.
  • Innovative Capabilities: Our experience in developing advanced hardware and software positions us well to create cutting-edge VR experiences.

However, we acknowledge that our experience in art and game development is limited. To address this, we plan to collaborate with experienced artists and game developers to enhance our offerings.

Leading Company - Sandbox VR

Before analysis the whole industry, I want to take a look at the leading company in Large Space Virtual Reality - Sandbox VR.

Sandbox VR’s approach to creating full-body, social VR experiences has indeed set them apart in the industry. By leveraging advanced hardware like motion capture sensors and haptic vests, combined with their exclusive software, they’ve managed to craft an immersive and accessible form of entertainment. This not only appeals to a broad audience but also positions them as a leader in the future of interactive and social VR experiences.

Deadwood Valley game has generated \$23 million in the last 12 months at just 30 locations. Squid Game Virtuals, has also taken in \$4.56 million in its first two months on the market. 1 Sandbox VR’s estimated annual revenue is currently $92.2M per year. 2 3

Competitor Name Revenue Number of Employees Employee Growth Total Funding
Zero Latency $42.2M 187 11% N/A
The Sandbox $161.2M 629 0% N/A
The VOID $24.6M 120 -8% $20M

Dynamic Strategy & Competitive Life Circle

The Large Space VR market is featured with Entrepreneurial or Schumpeterian Rents. The market is changing fast, both technology and consumer demand contribute together to this result.

  • Technology: Virtual Reality Technology developing fast, The technological shift in VR large spaces has simplified operations by replacing complex, costly setups with more efficient, standalone VR systems, drastically reducing investment costs (from millons to hundreds of thousands) and thous shortening payback periods.
  • Business Mode: The “flow-style” operation model has indeed been a game-changer for the VR large space industry. By optimizing space efficiency, it has transformed VR experiences into a commercially viable business. The example of the Pharaoh project in Shanghai highlights this success, where the ability to accommodate new participants every 10 minutes has led to a significant increase in throughput. This model ensures that large spaces can maintain high occupancy rates, which is crucial for the industry’s sustainability and growth.
  • Consumer Demand: User preferences are constantly evolving, requiring continuous content updates to align with the latest mainstream media trends and meet consumer demands.

The Market is still in Ferment stage (in the Competitive Life Circle), with the following features and evidences:

  • New technology is still emerging, PICO has just release their new VR devices 4. New large space VR setup is still updating, keep reducing its costs.
  • The “flow-style” operation model just emerged (10 minutes a roll). Made the Pharaoh project in Shanghai much more efficient than previous Cinema model (30 minutes a roll).
  • Visibility and acceptance are rising to mainstream entertainment, with large future space. (as shown with Sandbox VR)

International Strategy

International Trade at a moderate level: (1) Exporting hardware devices is straightforward, with each set capable of serving for an extended period. (2) Content distribution is rapid via the internet, and the growing globalization of culture has increased the acceptance of diverse content, making international trade more feasible. (3) However, if we aim to design virtual spaces that cater specifically to local audiences, content updates will be necessary for each cultural region.

Foreign Direct Investment at a high level: Establishing a new virtual reality company has become easier due to minimal government regulation. Nonetheless, it’s crucial to hire local artists to create culturally relevant content that resonates with the local audience.

Q&A (response as a new startup in this field, generally, foucs on offering high level experiences designed for each region):

  • Where should our firm compete ? Three most important ability in the field are : virtual reality content, hardware device set, and the business mode. For our new startup, we plan to focus primarily on:
    • We will prioritize developing content that resonates deeply with local cultures, ensuring our experiences are not just immersive but also culturally relevant and engaging for regional audiences.
    • While we may not directly compete in hardware manufacturing (yet), we will ensure that our experiences are compatible with the best VR devices available, optimizing performance and accessibility.
    • We will adopt a flexible and regionally adaptable business model that leverages “flow-style” operations, maximizing space efficiency and allowing for continuous updates and improvements based on local preferences.
  • How to enter the market ? we are considering the Licensing/Alliances approach:
    • By forming strategic partnerships with local firms or cultural institutions, we can leverage their regional expertise and existing networks to tailor our content and services more effectively to local markets.
    • This approach allows us to adapt quickly to cultural nuances and consumer preferences, ensuring that our offerings resonate well with local audiences.
    • Licensing our technology and content to local partners enables us to scale rapidly across different regions without the significant capital investment and risk associated with direct operations or acquisitions.

Diversification Strategy

As we found three major competitive value in Large Scale Virtual Reality Field. We could also diversify our company into that three direction.

  • Virtual Reality Content: Content is crucial for the success of large-scale VR projects. Given our technical orientation and limited experience in art, we plan to acquire a company specializing in VR content creation. This approach will allow us to leverage their expertise and ensure that our offerings are both high-quality and compelling.
    • High quality content or popular IP are hard to obtain.
    • Diversification Strategy: acquire or partner with companies specializing in VR content creation.
  • Hardware Manufacturing: While our company excels in software development, we acknowledge our current gap in hardware manufacturing. Instead of developing hardware in-house, we will focus on ensuring our experiences are compatible with top-tier VR devices. We will partner with leading hardware manufacturers to integrate our content seamlessly with their technology, maximizing performance and user experience.
    • Diversification Strategy: The entry is hard, but we had technological experiences. Which might create a huge advantage for us, which might enable vertical foreclosure.
    • We could create strategic alliances at the beginning. When we have enough strength, we could make hardware department ourselves.
  • Business Model: We will adopt a flexible and innovative business model tailored to regional needs. Our strategy includes leveraging “flow-style” operations to optimize space efficiency and enable continuous updates based on local preferences. This approach will ensure that our business remains adaptable and responsive to market demands.
    • Innovative Operations. Keep finding a better way to organize the projects.
    • Diversification Strategy: Regional Adaptation. cooperate with local tourist attractiveness office, to borrow they field, and combine their local culture.

Stakeholder Strategy

Primary Stakeholders (P0 high priority, P1 mediate priority, P2 low priority):

Issue Employees Customers Government Community Shareholders
Product Experience P1 P0 P1 P0 P2
Culture Value P1 P1 P0 P2 P2
Job Fulfillment P0 P2 P2 P2 P2
Ticket Prices P0 P0 P1 P1 P0
Impact on Industry P1 P2 P0 P0 P2

For Product Experience, customers and the community are the highest priority, indicating that delivering a high-quality and engaging product is crucial for customer satisfaction and community impact. Attention to Ticket Prices is also essential, as it impacts both employees and customers significantly. While Culture Value and Impact on Industry are relevant, they are less critical compared to other needs.

References

  1. Squid Game Virtuals generates $4.56M for Sandbox VR in first two months. https://venturebeat.com/games/squid-game-virtuals-generates-4-56m-for-sandbox-vr-in-first-two-months/ 

  2. Sandbox VR Revenue and Competitors. https://growjo.com/company/Sandbox_VR 

  3. Sandbox VR - The First Globally Successful VR Company. https://www.circuitstream.com/blog/sandbox-vr-the-first-globally-successful-vr-company 

  4. PICO 4 ultra. https://www.picoxr.com/global/products/pico4-ultra