#1240 – Engaging with the Digital Arena

AI Constructed Brief

In 2025, XR investment transitioned from consumer-focused to more practical, enterprise and mixed reality (MR) solutions, signaling a pivotal market shift. The AWE Expo highlighted a surge in commercial entertainment, immersive MR experiences, and innovative hardware like Virtuix’s upgraded OMNI One and new treadmill systems from XelerateVR. Notably, the event showcased a growing emphasis on MR in location-based entertainment (LBE), with startups like Dream Park and Enklu advancing hybrid AR experiences. Meanwhile, major tech players like Apple and Meta made strategic moves—Apple upgraded Vision Pro’s software amid sluggish sales, while Meta pivoted from VR hardware to develop affordable MR glasses and foster exclusive content partnerships. Concurrently, collaborations such as Niantic with Meow Wolf and Snap’s AR glasses signal a broader industry focus on phygital and AR applications. Overall, the narrative indicates a market gravitating toward mainstream MR, with consumer VR relegated to a niche, setting the stage for significant growth opportunities in enterprise, LBE, and hybrid experiences.

Full Stinger Report

The importance in establishing the next phase of XR investment was seen with the holding of several technology presentations, conferences and events during the buildup to the middle of the year.  We offer a unique snapshot of these gatherings and the trends emerging. 

XR Extravaganza

Held at the beginning of June, the Augmented World Expo (AWE) gathering at Long Beach in California – seeing some 250 exhibitors and almost 5,000 attendees collected at both the Convention Center and in private rooms at the neighbouring Hyatt Hotel. The pioneering XR expo and conference for the augmented, virtual and mixed reality sector celebrating its 15th anniversary, (starting back in 2010). As well as conferences and summits the event included their prestigious Auggie Award ceremony for innovation in the sector. 

It was interesting how much the commercial entertainment scene was represented across the AWE show floor than previous dominance in consumer interest. Exhibitors included IMMOTION who brought an example of their updated ‘Immersive Voyager’ motion seat system running PICO G3 headsets. The company is installed in over 125 locations worldwide, across museums, zoos, aquariums, malls and entertainment locations, making it one of the major LBE VR companies in the world.  Recently winning “Best of Show” in the Experimental category for their VR film documentary experience ‘The Great Migration’, at the ‘Nature Without Borders International Film Festival’. 

A familiar name to the LBE sector, Virtuix were also at AWE’25, exhibiting their new ‘OMNI One’ consumer omni-directional treadmill – a major upgrade on their original system. Having raised an additional $2.7m, (previously gathered some $15m in series financing), the company was promoting their continued consumer VR investment. That said, Virtuix confirmed to the Stinger Report that they continue to sell their ’OMNI Arena’ location-based entertainment platform, recently celebrating the 80th installation, (at a Houston, Texas entertainment venue). Still deploying their legacy architecture. During AWE’25, winning an “Auggie Award” for best interaction product.

A new omni-directional system was launched at AWE’25 from XelerateVR, who introduced their new ‘ODT 1’ – using specially mounted ball bearings in the treadmill to offer a more realistic movement sensation. While other immersive treadmill systems were presented from InfinaDeck, their motorized treadmill platform has previously been launched into the commercial sector. No word that these treadmills will follow Virtuix into the entertainment sphere – though these companies are focused more on commercial deployment than previous endeavours. 

Exercise using VR has been seen in the consumer sector, and there have been attempts at more commercial applications, (as seen with BlackBox VR). At the expo Ethereal Matter presented their platform, offering the ability to train, exercise and play within a virtual environment – the company targeting the fitness sector with a dedicated enclosure called the ‘MEK 01’ with resistance elements, accommodating arms and legs, for a full body haptic experience, while using the Meta Quest Pro. 

A highly active VR experience was also seen on the Logilicity booth with their ‘Anywhere Bungee VR’ platform, which had players strapped in and then turned upside down during their virtual bungee jump while wearing a Meta Quest 3. This latest automated prototype version of the system – building on the concept we had reported on previously being deployed at Japanese pop-up installations since 2021. The audience pleasing experience, described by the Stinger Report as being like “Richies Plank 2.0” – because of its extreme VR experience vibes. Winning during AWE’25 an “Auggie Award” for Best in Show Playground.

AWE USA included a new ‘Gaming Hub’ for developers to present their concepts, along with a startup pavilion for newcomers to the sector. Seen at the show was Spacebar Arcade who exhibited their VR pinball table and arcade game unit, allowing players to physically play games, while in virtual reality – part of their social arcade community. AWE’25 saw a considerable appearance of commercial entertainment experiences – this included Thousand Bit Inc., exhibiting at the show on Meta Quest 3’s, a compact, turn-key, VR haunted house walk-through experience called ‘Sinister Inn’. Screams from those trying out the 2-minute experience, reverberating round the expo hall. This content is primarily aimed at amusement parks and haunted houses, with a VR arcade version distributed through Synthesis VR and Springboard VR.

One of the big showings was from the newly invested Dream Park, who were running demonstrations of their Mixed Reality “downloadable” theme park concept. Players can interact with a Mario-esq., playscape, collecting coins and avoiding virtual obstacles in the augmented environment – running on skinned Meta Quest 3S headsets in MR mode, (minus their head-straps). The company is rolling out their public space entertainment concept following securing seed investment. AWE’25 would continue to reveal the importance of MR experiences in the LBE sector with Enklu’s ‘Verse’ immersive experience winning the startup up pitch competition “Auggie Award” during the convention. 

An announcement regarding another immersive environment in development was made between Meow Wolf and Niantic Spatial – revealing the development of a “Phygital” (AR Portal) experience based on the AR mapping tech from Niantic in support of Meow Wolf’s immersive art installation work.  The experience is based on the technology still in the prototyping stage, with a closed Beta-test of the concept as a Phygital exhibit at the Denver Meow Wolf space. The company hopes to eventually roll out a successful consumer release on multiple platforms based on this partnership. 

This announcement follows on from Niantic divesting of their game development operation (sold to Saudi based Scopely, for $3b), along with layoffs, all towards focusing on their geospatial mapping platform now under the Niantic Spatial brand. This followed on from previous partnerships with Microsoft and the abortive plan to develop ‘Pokemon Go’ for the Hololens AR platform, along with plans for Niantic to develop their own AR headset – all later abandoned. This latest partnership with Meow Wolf is hoped to reposition Niantic’s business towards a profitable footing.

In another agreement, and the latest collaboration on a headset. Revealed during the show, Niantic announced a strategic partnership with Snap towards applying their geospatial AI technology to their new generation of glasses. Seeing Snap investing into the geospatial company – both winning “Auggie Awards”. Snap would use AWE’25 to announce its new consumer AR glasses platform called ‘Specs’, with plans for a 2026 launch. Demonstrating the system on stage with augmented pool assists, with the glasses showing the best ball shots. Snap is looking not just at consumer but also commercial applications for their system having recently visited the amusement trade expo towards establishing partnerships.  

A lot of eyes were turned on the new headsets that hoped to define the next phase of the market migration from pure VR to a hoped-for MR future during AWE’25. Speculation on the Samsung / Google partnership, with rumors swirling that their new system would be released soon – with closed door private room demonstrations during the event. While Sony and Siemens promoted their partnership with their standalone ‘XYN’ brand XR headset – seeming to have pivoted away from their previous Playstation VR investment. Along with other exhibitors PICO and Lenovo – as well as Meta and Play for Dreams MR (previously YVR), also taking space.

One surprise AWE announcement was from KDDI, the Japanese telecommunication giant, who have partnered with CAPCOM to release an AR headset. The system is powered by Qualcomm Snapdragon XR2 architecture. Created originally for the ‘Monster Hunter Bridge’ immersive attraction at the Osaka-Kansai Expo. As previously reported the attraction had been using the now discontinued Microsoft HoloLens 2 headsets. The new partnership sees the deployment of the KDDI / CAPCOM new headset that represents virtual creatures within the phygital environment of the attraction. Working examples of the new headset were present on the Qualcomm booth.

The void left by the removal from the enterprise AR scene of both Magic Edge and the Microsoft HoloLens has seen the likes of first Sony and now KDDI hoping to deploy a MR headset. It was also revealed that new developer HMS, released their ‘Stingray G2 AR’ platform that also hopes to be seen as a replacement to the vacuum in the market left by the abandonment of the previous platforms. That these new hopefuls, along with Snap, will also look towards trying to sell their platforms into the LBE scene is inevitable, and we look forward to seeing market reaction, (we have covered these attractions in our special Virtual Arena feature).

XR technology for immersive experiences, beyond the application of headsets was presented on the South Korean pavilion from newjak – the company presenting for the first time their ‘X-RUNNER’ platform using an immersive projection mapped environment. Also on the pavilion was Twohands Interactive with their ‘Didim’ fitness and fun projection floor portable playground system, covered during IAAPA’24. Some consideration is being made that the future of XR will be more towards a non-projection and LED wall and floor display medium. The development of new immersive display environments driving the more Phygital investment of the next phase in XR. 

In Conclusion – AWE’25 reflected that the consumer momentum seemed to have lessened, replaced by more practical commercial solutions for MR technology. During the event keynote presentation, it was revealed that over 70-percent of the XR market was focused on Enterprise, relegating consumer VR to a niche business (source ARtillery Intelligence). AWE 2025 was promoting the rally cry “XR Is Going Mainstream?” This defines the feeling during the show that next year will be the most important for the AR landscape, as the technology will have to either sink or swim as investors demand results from over a decade of investment. AWE will be taking place over the 16 to the 18 of June 2026 – and there are new developments in the layout of this important XR event, which we hope to report on soon. 

Apple Upgrades and Waits

Taking place, the same week as AWE’25, and the electronic giant Apple held their Worldwide Developers Conference (WWDC) 2025. A major gathering to promote updates and new releases for the library of Apple consumer electronics. This year’s event was also seen as an attempt to revive interest in their spatial computing headset; the Apple Vision Pro saw the upgrade to its visionOS 26 operating system. 

These operating system enhancements included the virtual avatar platform called ‘Persona’ seeing massive visual improvements. The ability for new anchored (persistent) widgets within the virtual space. And support of improved spatial photos and video content. In a major reversal in previous positioning, Apple announced the Vision Pro’s adoption of the Sony Playstation 2 motion controllers, along with a new Logitech stylus. The sudden reversal on upgrading to support motion controllers confirms Apple’s admittance at making a mistake in neglecting this support, and the importance of immersive gaming to establish this headset.

These improvements to the Vision Pro came however with no new content or major app releases and left the over $3,499 platform, still seeming more an impressive technology demonstrator than a viable consumer platform. Apple’s position regarding their Spatial Computing experiment was telling, especially as there was no news about a rumored forthcoming, cheaper version of the Vision Pro for 2026. Some observers feel this visionOS update may be far too little too late to save the Vision Pro’s imploding sales. Further well-placed leaks suggested a change in the Apple Vision series roadmap, with plans for a Vision Pro2 abandoned for a new Apple Vision Air (Lite) in 2027, while plans for Smart-glasses systems had been accelerated – Apple totally reevaluating its involvement in the MR landscape. 

This situation was underlined by the appearance of the Play for Dreams MR – a design that is an analogue to the Vision Pro, but has focused on supporting the VR gaming community, released with controllers that the Apple system neglected. The Play for Dreams MR system was promoted heavily at the AWE’25 event. Even with its own high price of some $1,500, this is still cheaper than the Apple alternative. The Kickstarter funded platform (previously YVR) supported by its Qualcomm Snapdragon XR2+ Gen 2 chipset has further eroded the gloss from the Vision Pro. Apple is now waiting for the impact that this and Samsung entry will fair in this tempestuous market, before their next move.

Meta Repositions to Thrive

The investment in trying to establish a lightweight MR glasses system has seen VR investor Meta, and their Reality Labs cancel plans to launch sequels to their Meta Quest 3 series and pivot towards emulating Apple Vision Pro and Samsung form factor. Plans now to launch a sub-$1,500 costing production version of their ‘Loma’ prototype MR glasses for 2026 that will not be part of the Quest line (rumored to be called ‘Meta Celeste’). The platform offers more than just pure Head-Up-Display (HUD) technology, rather than limited AR features seen from the competition. 

This new direction is an attempt to address the poor retention and sales the company has experienced on their VR initiative. Pivoting to AR/MR, they have started a major romance with Hollywood studios and content creators, (such as Walt Disney and Warner Bros., Discovery). Hoping to attract developers to create exclusive content for their MR platform that will draw audiences – with reports of massive upfront investment offered to content creators to jump on the platform. Meta wanting to avoid the Apple situation of having hardly any content or strong apps for their expensive Vision Pro, on launch. 

In going down the MR route, sees the abandonment of much of the VR investment that Meta has made in the over eight years – which has seen the multi-billion-Dollar gamble made in their Reality Labs operation, to establish their suite of VR headsets and content. The dropping of using the VR terminology internally at the corporation was the latest indication of the plans to pivot away from the failure to take their aspirations for VR and the Metaverse outside of being a niche. Mass layoffs and cancellations of R&D projects have continued to indicate the massive pivot that Meta intended to undertake towards regaining the high ground in XR adoption.

While VR is verboten internally, Meta seems to be enthused by AR, the one ray of sales success in recent reporting, seeing over a million ‘Ray-Ban AR’ glasses sold. The company in June announced another fashion brand AR release in partnership with Oakley – offering “smart eyewear” that can record 3K video, capture images, run social media and audio apps like their predecessor. ‘Ray-Ban’ and ‘Oakley’ brands are both owned by EssilorLuxottica, (directed through their new ‘HELIX’ smart eyewear division). Meta went as far as to reveal they have increased their glasses production capacity with aspirations to sell 10m units by 2026. 

For the remaining VR community, the need to stay relevant, especially for those that acquired the Quest 3 and 3S received some lip service from Meta. It was revealed that Meta would be releasing a Xbox Edition version of the Quest 3S VR headset. This system comes with Xbox controllers and a 3-month subscription to the Xbox Game Pass store game service. Able to play game releases on virtual flat-screens within the headset for a $400 price-point. Microsoft and Meta have had an ongoing partnership. Previously hoping to lead development of a unique Xbox VR headset. However, Microsoft’s cooling towards VR and MR saw them cancel their own HoloLens platform, has reverted to supporting strategic agreements towards applying their Xbox store to other platforms (such as on the Meta Quest, Game Decks, PC’s and AMD chipsets). In September Meta will be holding their CONNECT presentation that is expected to reveal the future for their MR / AR platforms – and what they intend to do with the remaining VR business. Sources suggesting Meta reverting to a HorizonOS facing approach, abandoning constant VR hardware iteration for the medium term – foreshadowed by the abandonment of the Meta Quest 4 line.

This marks moves by Microsoft to revert away from traditional physical console hardware sales, and moving towards a future where Xbox content can be accessed on a wide variety of devices, rather than just on their fielded console hardware. This is seen as the only defence against the vast sales success of Sony and Nintendo consoles and game decks. The news of the strategic partnership with AMD, along with the launch of the new Meta Quest Xbox Edition came just as news sources revealed the latest round of layoffs from Microsoft. This latest round impacted the very Xbox division, seeing a major number of redundancies of over 9,000-staffers following on two other rounds just this year. With Microsoft departing a physical console business model for an Xbox store model – the console game divisions are expected to be decimated, reflecting growing layoffs across consumer gaming.   

The pivoting in the consumer VR and gaming sector has a direct impact on the audience perception of the technology, and it is important that the commercial LBE VR sector is positioned with the right marketing accordingly. We will bring further developments in this scene soon.