The global location-based virtual reality market size was valued at USD 387.09 million in 2021. It is expected to reach USD 4,939.12 million by 2030, growing at a CAGR of 32.70% during the forecast period (2022–2030).Location-based entertainment (LBE) occurs in a particular setting, such as family entertainment centers, swimming pools, waterparks, and theme parks. The LBE typically entails building a physical environment with the equipment, accessories, and other elements required to produce a truly immersive experience. The type of setup used in location-based VR entertainment is for multiple players, not just one. A group can share the same sounds, sights, and feelings through a virtual reality experience.
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Rising Demand for VR Solutions Based on Arcade
Innovative VR arcades provide more immersive experiences. During the forecast period, VR arcades are expected to show strong sales and gain market share in the immersive VR ecosystem. For instance, businesses like Indie studios know that creating content specifically for the out-of-home VR space can generate positive profit margins. Although consumer VR headset usage continues to decline, LBVR usage is increasing because of market factors like the popularity of VR arcades.
Rising Popularity of 360-Degree Content
Immersive technologies are becoming increasingly popular, and 360-degree videos are a raging emerging trend in the market. Users can get a complete panoramic view of the video with 360-degree videos. Instead of just watching the stream, viewers can manually click through the video and engage with various aspects of it. It is now possible for viewers of 360-degree content to put on a VR headset and look around a 360-degree video in all directions to get a sense of being in-person. 360-degree videos have recently grown in commercial and public popularity, despite being a niche market innovation. Additionally, customers who frequently watch videos on virtual reality headsets often show heightened interest in the curated content. The global location-based virtual reality market is predicted to grow exponentially over the forecast period due to the increased demand for 360-degree content.
High Cost of VR Content Development
The capital-intensive nature of the line of business limits the growth of the current market and the ensuing growth in market launches. Setting a fixed price for custom virtual reality content is extremely difficult because it involves any custom development work. Each factor's size and complexity influence the total cost of development. A simulation with intricate and interactive graphics is more expensive than a 360-degree video. Overall, location-based VR experiences' overhead and content curation cost likely to impede their expected short-term growth.
Growing Use in Various Applications
Location-based virtual reality is one of the biggest sales drivers because it offers a significantly more immersive experience than conventional virtual reality. This technological trend is therefore expected to move to the commercial sector. The epidemic has altered many aspects of businesses, including employees’ widespread use of remote work. This raises various problems, including the need to keep a workplace that promotes teamwork and the growth of the corporate culture. VR-based solutions are quickly gaining traction to resolve these problems, and it is anticipated that this adoption will significantly increase across various applications.
The global location-based virtual reality (VR) market is segmented by type and application.
Based on type, the global location-based virtual reality (VR) market is bifurcated into hardware and software.
The hardware segment owns the highest market share and is expected to grow at a CAGR of 32.3% during the forecast period. The global location-based virtual reality market is subdivided into head-mounted displays, glasses, sensors, and cameras based on hardware. A head-mounted display (HMD) is a type of display accessory that is worn on the head or as a component of a helmet and has a tiny display optic in front of either one (for a monocular HMD) or both eyes (binocular HMD). Wearing a head-mounted display (HMD), a user experiences location-based virtual reality (VR), where the setting itself is created to enhance the experience (i.e., if the user walks past a virtual air conditioner, they will feel cold air). Companies like Oculus and HTC have positioned their product lineups to meet market demand to capitalize on the growing trend in VR. Two VR-based consoles are available from Oculus and two from HTC. The quality and quantity of games offered on VR consoles' platforms have significantly hampered demand. Most consumer electronics companies also incorporate VR technology to improve their production capacity.
High-featured hardware and software need to be seamlessly integrated for a functional, seamless experience. Businesses are investing in hardware and software. For instance, Vicon unveiled Origin, its latest location-based VR system. Origin's software has advanced computational tracking and auto-healing between sessions. People go to places like movie theaters and amusement parks for the ambiance, not the cutting-edge technology. There needs to be something special about the situation so that people will want to see it. Due to this, there has been a rise in multitenant virtual reality applications. Due to the nature of LBVR, participants in a multi-player setting have the freedom to move about the virtual world as they like. Though it currently has fewer users than other software categories, this one is expected to grow much faster. Even more so in developed economies, consumers are willing to shell out cash for opportunities to mingle with their peers.
Based on application, the global location-based virtual reality (VR) market is bifurcated into VR arcades, VR theme parks, and VR cinemas.
The VR arcades segment is the highest contributor to the market and is expected to grow at a CAGR of 33.4% during the forecast period. Arcade games that use virtual reality (VR) deliver an immersive experience that elevates video gaming. The technology immerses the user in the action while simulating the game's environment. More than 64% of current VR users believe that gaming has the most potential to gain from advancements in VR technology, according to the 3D insider. Over the past few years, various VR arcades have popped up worldwide, and their popularity appears to increase steadily. The lack of a centralized management and content licensing solution can make it seem impossible for educational innovators to integrate VR into student learning, despite their desire to do so. Players in the VR space are making it simple by giving educational institutions access to a library of curated educational VR games, easy-to-use devices, and time management tools.
The development of virtual reality technology has changed the face of the theme park business. Theme parks create standalone virtual reality rides and integrate VR into their existing attractions. While other organizations are investing billions of dollars in creating specialized virtual reality theme parks, traditional theme parks are investing millions in virtual reality technology to boost attendance. Technology is used in virtual reality theme parks and attractions to offer visitors a distinctive and thrilling experience. Hiring technical experts who can give visitors the best VR experience to create new VR theme parks would be necessary. The demand for hospitality management experts is increasing as theme parks look to incorporate VR technology into their current attractions.
By region, the global location-based virtual reality (VR) market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World.
Asia-Pacific Dominates the Global Market
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Asia-Pacific is the most significant shareholder in the global location-based virtual reality market and is expected to grow at a CAGR of 33.4% during the forecast period. Due to the presence of numerous sizable emerging economies in the region and the growing acceptance of virtual reality technology, Asia-Pacific is predicted to hold the majority share. In turn, it is anticipated that this will motivate business leaders to invest in the area. China is likely to have a sizable stake in the region due to the country's increasing adoption of virtual reality technology. China is home to many growing virtual reality businesses due to government initiatives. The Chinese government is making a solid effort to position the country as a global leader in cutting-edge technologies like artificial intelligence, virtual reality, and self-driving cars.
Incubator zones for the integration of virtual reality into research, manufacturing, education, and other fields have been established in several Chinese towns and cities. The Wenzhou government is collaborating with Seekers VR, a company based in the eastern city of Wenzhou that owns a franchise chain of 200 arcades in more than 70 cities across China. The goal of the college will be to teach students about virtual reality while utilizing technology in the classroom. It is anticipated that the widespread adoption of high-speed 5G networks in China will accelerate VR development and foster expansion in industries like education and training.
North America is expected to grow at a CAGR of 31.9%, generating USD 1,502.61 million during the forecast period. The market for location-based virtual reality in North America is anticipated to expand significantly. Geographically speaking, the United States currently dominates the location-based VR market. Additionally, it has been a leader in implementing innovations, giving the area an advantage over other parts. In the US, location-based virtual reality is becoming more prevalent. Also, the US-based startup Sandbox recently received about USD 11 million in funding. Further, it is anticipated that there will be a significant increase in the number of VR users over the forecast period, which will likely positively impact the location-based VR market.
Due to the widespread and advanced adoption of virtual technology in European nations like the United Kingdom, Germany, France, Spain, and Italy, the European region's market share remained stable. The market expansion in this area is being propelled by people in European nations using smartphones more frequently and computer gamers' increasing reliance on hardware like head-mounted displays. Immerse UK has also assembled a panel of experts to examine the current situation and suggest how location-based VR entertainment providers might proceed. They will also consider implementing practical safeguards like hygienic standards, social distance, and best practices. Initiatives like these will expand the market's opportunities during the forecast period.
The location-based virtual reality market has enormous potential for Saudi Arabia, Brazil, Argentina, South Africa, and the United Arab Emirates. The new Tshwane Interactive Digital Center (IDC) in South Africa has been launched in collaboration with the City of Tshwane Metropolitan Municipality and EON Reality Inc. The IDC will concentrate on creating VR applications that will aid South Africa and its neighbors in enhancing STEM education, promoting entrepreneurship, and developing vocational skills. To design "smart" helmets and glasses for its engineers based on VR software created by Takeleap, a Dubai-based company, the Dubai Electricity and Water Authority enlisted the aid of DAQRI, a leading AR & VR solution and hardware provider.
Consumer brands like Emirates and Etihad offer 360-degree virtual reality experiences. Guests can use Google Cardboard goggles and smartphones to take an AR/VR tour of hotel chain Jumeirah's facilities, thanks to the company's recently released VR app. Additionally, Ikea recently opened virtual reality pop-up stores in Kuwait, Jordan, and Morocco to give customers who cannot visit Ikea physical stores an immersive shopping experience. Ikea claims that this increased foot traffic by 19%. The adoption of location-based virtual reality is anticipated to increase across important regions like Latin America, the Middle East and Africa due to such developments and advancements in the virtual reality sector.
The global location-based virtual reality market’s major key players are Exit VR, Springboard VR (Vertigo Games), SpaceVR Inc, Survios Inc., Hologate GmbH, Zero Latency PTY Ltd, Oculus VR LLC (Facebook Inc.), HTC Vive (HTC Corporation), Tyffon Inc., and Neurogaming Ltd.