#1280 – New Phase in XR Investment – Part 1

AI Constructed Brief

Leading investors should note that the LBE VR sector remains highly profitable amid shifting hardware dynamics, with new Asian partnerships and innovative platforms like DPVR gaining traction. Market consolidation at key players like PICO and strategic collaborations, such as LAI Games with WAHLAP, highlight evolving technology offerings. A recent comprehensive survey by Zero Latency reveals increasing consumer interest in social, longer-duration, premium VR experiences driven by AI search trends and family appeal. Regulatory updates in Europe may influence product launches, while the emerging LBEC aims to boost Asia’s VR market valuation to $97m by 2037.

Full Stinger Report

This two-part coverage continues a XR focused look at the application of the latest phase of VR into the amusement and attraction sector. Including a report from one of the largest surveys conducted on the reality of audience interest in the free-roaming VR arena business.

Updating Amusement VR

Returning to XR development technologies using virtual reality (VR), we had seen HTC VIVE headset as the system of choice for tethered VR amusement. But following a rocky love affair for the Asian manufacturer, more recently for all intents purposes HTC has reduced their investment into Western LBE XR development – while still partnered with some operations such as Zero Latency. But still having an enterprise / education interest. This also includes some new Asian LBE XR arena partnerships, such as with Japanese public broadcaster NHK.

The other leading VR headset in the LBE sphere is that from PICO, as we reported on extensively in our AWE’26 coverage. While recent news reflected the changing directions of the VR headset market. It was announced in a surprise development that the founder and CEO of PICO had stepped down due to personal reasons and was replaced by a new chief. The company owned by Chinese conglomerate ByteDance has been undergoing a strategic consolidation, with greater investment in AI smart glasses and a new MR spatial computer platform (originally codenamed ‘Project Swan’ and now known as the PICO Space Pro). How much this management change will impact the LBE XR business has yet to be determined.

These developments illustrate that LBE XR is still a highly profitable business, but the changing focus of key manufacturers can prove fleeting. And this opportunity allows new corporations to carve a space for their platforms. It was one of these new entrants that LAI Games have selected. Partnering with DPVR to provide the headset for their ‘Asphalt 9 Legends Arcade VR’. From 2024 DPVR has supplied the DPVR E4 headset to be used for the game.

Originally released in 2021 by WAHLAP, and developed by IGS, this is the motion seat VR version of the popular street racer. With WAHLAP partnering with LAI Games to take on the Western distribution. And they would bring the final VR version of the game to IAAPA’22 as we reported on. The 2021 version of the game was launched using the HP Reverb G2 headset which was later discontinued. So, in 2024 the game was released sporting the DPVR headset as standard.

This is the second attempt at creating a VR amusement racing game, WAHLAP in 2018 launched a VR version of their then popular street racer ‘Overtake VR’. The game received some Western support, seen as an new application of the technology, but was going up against the then success of the more popular ‘Virtual Rabbids’. With the release of ‘Asphalt 9 Legends Arcade VR’, WAHLAP and IGS seemed to have attempted to address many of the original issues, with a more appealing cabinet, smaller form factor and a more popular game, based on the Gameloft licensed title.

Regarding the popularity of this VR racer, the Stinger Report reached out to LAI Games regarding the release. The company stated that the DPVR’s E4 headsets, with their 4K resolution and 120Hz refresh rate, deliver the performance and quality that their games demand. The company is seeing orders from operators for one of the few immersive racing games available in the market. WAHLAP launched at the AAA’26 show the new ‘Asphalt 9 Legends Arcade DX Plus’ – which we covered in our show report. Comprising the new gameplay, motion DX cabinet and motorbike and driver pairing, and vertical 85″ screens. The machine is also being represented by LAI Games in the West. This new release has however not yet been linked to a VR version of the title, as with its predecessor.

With the changing fortunes in VR headsets of late, the DPVR platform is now becoming the system of choice for seated (tethered) VR experiences, seen being employed by LAI Games in their new ‘Ubisoft All-Star VR’ release last year. We have also seen Raw Thrills select the VR headset for their ‘Godzilla Kaiju Wars VR’ release in 2024. As the fortunes in VR development continue to shift and evolve, we look forward to reporting on the next series of releases that will employ this technology. As well as the news that Bay Tek Entertainment, who represent the ‘HyperDeck’ VR attraction had also moved the platform onto the DPVR headset after previously supporting HTC.

Returning to the Location-Based Entertainment (LBE) scene with regards to VR technology, and it was announced that a brand new association had been formed to represent those in Asia developing LBE VR experiences and operating platforms. Called the LBEC (Location-Based Experiences Consortium), it is an organization dedicated to forming and mobilizing the market for LBE XR in the region – with hopes by 2037 to have seen this sectors business valued at $97m. It held its first event during July and has brought together leading lights in the territory including STYLY, KDDI, HASHILUS, L-COMPLEX and Dyanmo Amusement, along with many other operators and developers. Still at an early stage, the Stinger Report hopes to supply more information in coming coverage of this organization hoping to represent the region.

In the European sector and developments in the regulation of VR and immersive amusement products was revealed. Before IAAPA Europe, news service AmusementNetwork revealed that International Electrotechnical Commission (IEC) has issued revised Safety requirements, for all commercial amusement machines, VR experience cabins and motion-based interactive attractions wanting to be sold into the EU. It was reported that from July 21, 2026, these products now fall under the European Commissions revised EU safety requirements which manufacturers and importers will now have to comply with. Having to undertake required testing and obtaining new certification, or face sanctions. Designated EN IEC 62368-1:2026+A11:2026 standard, the revised requirements will apply to all new hardware in development from this point. How these revisions will impact VR and amusement products about to be launched at the London show raised many questions. At this time, BACTA, BALPPA, IAAPA EMEA and EUROMAT had not made an official statement regarding this reported development.

Survey the VR landscape

VR specialists Zero Latency held an online presentation revealing the findings from the ‘State of Location-Based VR 2026’ survey. Compiled for Zero Latency by independent firm Glow – this was said to represent the largest consumer study into the LBE VR landscape with some 2,300 participants across three regions (US, Canada, Spain, France and Australia) – none of whom were Zero Latency clients.

The company’s founder and CEO, along with the Chief Growth Officer presented the findings from the survey and subsequent research. Zero Latency has been offering over a decade of free-roaming VR experiences. Having migrated from PC backpack applications in the early days, to the current VR streaming turnkey platforms. A popular library of multi-player experiences beamed to the headset of the user. A premium VR experience in comparison to the limitations of mobile processor home VR standalone systems.

The VR free-roaming environment now employs the third generation of headset design, using the HTC VIVE suit, for game experiences up to eight simultaneous users. Along with tech partners Microsoft, and HP on their streaming firmware, with content IP partners Games Workshop and Ubisoft. Strong VR content is a constant iterative process, Zero Latency now working with major IP. Recently announcing their partnership with Sony Pictures to release a ‘Jumanji’ free-roaming VR experience on their platform. Content development a balancing act to avoid “title fatigue” (too many titles to select from) but offering key titles that draw the target audience.

Gathering snapshots from the survey report, the data showed that AI search tools now play a major part in the selection process of entertainment visits. This has fundamentally changed compared to even a year ago. The need to optimize to support these searches is a new priority. The social draw with groups brings customers to experience the VR platform much more than previously. It was revealed that date-night, and group packages in general were strong draws. The growth in family interest to try the VR experience, was a surprise from the data, with mixed attractions accommodating a shift in spending. Groups wanting more for their spend, a factor of the cost-of-living impact.

The customer is looking for strong venues, with functional hardware, looking for great games, with stronger agency – graphics and IP ever important. The survey data also pointed to an audience driven by thrills and excitement, the previous novelty factor of VR falling away as they look for premium content. And that the research saw this audience prepared to pay – with a shifting to a broader family audience, prepared to pay a premium price in the $39p-p and higher range.

Separating from the growth in Virtual Adventure free-roam alternatives, interest in the multi-player experience was seen both in the agency on offer along with the premium social experience. Achieving a complete separation from equivalency with consumer VR. The Zero Latency platform part of a broader entertainment mix needed to attract the modern audience. A multi-activity site driving the thinking of customers, positioning VR as an anchor attraction supported by hospitality, towards a longer dwell time. Booking driven by occasion, social bookings such as private hire and birthdays, with corporate booking filling out midweek utilization. The audience looking for things to do, rather than specific attractions.

The data from the research surprised operators revealing customers were looking for longer sessions – social media reflecting comments that the “experience ended too quickly”. Building on a longer, more premium experience, compared with the early generation of VR is essential and the need to contour pricing to demand is key in a “K” shaped economy. The company stating, you need those $39 tickets in off peak to attract lower K and can keep the higher price at peak times for upper K. Providing you are doing enough to drive awareness and have a good lease in a quality location with great customer service with a good fit. In terms of price, both parts of the K are looking for value.

The Zero Latency team were prepared to make the distinction between themselves and their major competitor Sandbox VR, congratulating them on their brand recognition and layout – seeing healthy competition as essential in the premium experience scene. But for Zero Latency now looking at a leading Global spread with some 150-installations, and with some 6 million plays under their belt. They have seen this established base attract major IP holders looking towards immersive social experiences using their properties. The operation working on ‘Jumanji’ and a ‘Cyberpunk 2077’ game properties. Zero Latency ended the online presentation by stating they see an exciting time for premium experiences. For those interested in reading the full report, it can be downloaded here.