The investment and development community are constantly striving to find the next profitable sector in XR, turning to new business opportunities following a turbulent time in the consumer VR gaming space. One area of interest is in out-of-home XR attractions, known widely in the industry as Location-Based Entertainment (LBE) XR. The sector deploys XR as a B2B2C business model that aims to surpass expectations of consumer gaming, presenting XR technology to a wider audience.
Guest Article By Kevin Williams
Kevin Williams is a specialist in the immersive location-based entertainment sector, with a long history of development, application, and commentary on the international industry. Along with running his consultancy KWP, working with leaders in the sector, he also is a prolific writer, publishing his own news service on the sector the Stinger Report, and podcast, SoundOff covering trends in the market. He also presents keynotes at numerous conferences on the deployment and application of immersive tech in the out-of-home entertainment sector, and the growth in social entertainment.
Out-of-home XR applications are now seen as revenue vehicles for prominent Intellectual Properties (IP) to reach new audiences. The latest generation of VR free-roaming arena systems offer players premium experiences within high-end virtual recreations of popular properties. Recently announced, Jumanji: The Lost Levels has been developed by Zero Latency in collaboration with Sony Pictures. The premium VR experience will go live across over 170 venues in December this year. This new IP-based property and other games for these systems focus on the social experience, rather than just blasting zombies.
Another VR free-roaming arena developer is Sandbox VR has grown to some 90 venues internationally. Sandbox is the second largest of the standalone franchise operations. In these VR experiences, groups of six players don both VR headsets and haptic vests within an arena which includes added environmental effects. The company has a selection of VR experiences, some including high profile IP-based content such as their popular Squid Game Virtual, developed in partnership with Netflix, along with Stranger Things: Catalyst. Both place guests in virtual recreations of elements from the popular series. Road to VR‘s Ben Lang wrote last year about his first-hand experience inside of Squid Game Virtual and other Sandbox experiences.
Courtesy Sandbox VR
The next generation of VR free-roaming experiences are moving from small handfuls of players to audiences of 20 or even 40 at a time, which have been described as ‘Virtual Adventure’ systems. Audiences traverse recreations of historical environments such as ancient Rome, climb the Pyramids, or navigate the Titanic.
One example of the virtual adventure approach has been developed by the VR studio Univrse in partnership with Banijay Live Studio. The Black Mirror Experience is a travelling 50-minute hybrid adventure within the dystopia environment from the original television series that came from both Channel 4 and was screened on Netflix.
Courtesy Black Mirror Experience
The growth of investment in LBE XR was seen during this years’ Augmented World Expo (AWE), held in Long Beach, California during June. Which included a new LBE XR Zone on the show floor, and a dedicated seminar program where developers and investors attended to scope out this emergent opportunity.
The seminar covered developers in this sector of the market like The Rabbit Hole VR, which worked with developer vrCAVE to offer its latest multiplayer VR free-roaming escape game Cyberscape, where players work together as teams in a compelling escape game experience. Hololabs Studio is another developer of standalone VR free-roam games and recently launched their new experience called Abyss Vault in partnership with Synthesis VR who is a major content distributor and platform developer. Meanwhile, developers such as Octopod VR and Vertigo Games have worked to position some existing consumer VR content into the VR arcade space.
Courtesy Hololabs Studio
Experiences in the LBE XR scene employ share many design considerations seen in the broader theme park and attraction market. Developer Thousand Bit has created Sinister Inn, which has been called “the World’s first Haunted Walkthrough VR attraction.” The concept mixes elements from traditional horror attractions with a portable VR configuration, making an attractive package which requires significantly less physical infrastructure and actor talent compared to a more traditional horror attraction.
LBE XR has plenty of overlap with consumer XR, but diverges in some interesting ways, especially when it comes to VR headsets. While Meta Ques has long dominated the consumer headset market, many VR entertainment applications are adopting new PICO 4 Ultra VR headset. It has becoming a workhorse system across the industry, thanks to its LBE-focused service, support, and swappable battery. While the PICO platform is not available for consumers in the West, the hardware has been deployed in Western LBE.
Other developers in this sector have relied on the HTC VIVE range of headsets, with a smaller number relying on Meta Quest headsets. Most of the Enterprise LBE XR applications surpass the graphical limitations of consumer standalone headsets, often by using PC VR rendering with wireless delivery.
Another need that’s unique in LBE XR is equipment that’s robust enough to support high usage, especially where hygiene is important. Cleanbox Technologies has emerged as a leading name in hygienic solutions with their unique UV light sanitisation process that’s used widely in this space.
Similar to the consumer side, LBE XR has also begun to adopt mixed reality experiences. Developers like Dreampark offer an MR attraction using Quest 3 headsets in pass-through mode. Their latest experience is a magical game called Wizards Way, in which players see and navigate the real world around them while interacting with virtual elements using their wand controller.
The company has also been working on popup installations of their DreamBox self-service headsets vending kiosk. The self-guided MR attraction is currently on trial at the Hollywood, CA location of popular family entertainment venue Dave & Buster’s.
Mixed reality as a spectator technology has also made an appearance in the LBE XR space. Developers such as Meleap with their HADO competitive virtual sports platform. Players wear headsets and wrist sensors to launch virtual energy balls, raise shields, dodge attacks, and compete on a real court in real-time. The platform is played by millions globally, supported by a strong tournament following in Asia, with big prize competitions streamed live with mixed reality visuals shown to competitors, making this one of the first large scale virtual sports platforms.
Courtesy HADO
While there’s many recent exciting developments in the space, success is never guaranteed, even among well qualified entrants. This was illustrated recently by Interstellar ARC, an award-winning virtual experience developed by veteran VR studio Felix & Paul. The experience was made as a VR arena attraction to captivate a large audience within a sci-fi immersive narrative. The attraction opened in 2025 at AREA15 in Las Vegas, Nevada, but was only operational for 10 months before the venue ceased ticket sales and eventually closed, which coincided with layoffs and a likely closure of Felix & Paul Studios. A mixture of a difficult attraction to explain to prospective guests, along with the high operational fees of running the attraction at the Las Vegas venue, doomed this experience.
Courtesy Interstellar ARC
Consumer VR developers looking to pivot from home VR content toward LBE should know that the two mediums are different enough that crossing the boundary requires considerable care. The most popular consumer VR games are rarely are good fit for the unique operational needs of LBE without considerable modification. And even designing brand new content for the LBE space can prove difficult if a studio’s expertise is grounded in the consumer VR space.
Schell Games, the veteran VR studio behind spy-themed puzzle series I Expect You to Die and Among Us 3D, confirmed it has laid off around 10 percent of staff.
As initially noted by Game Developer, multiple Schell Games employees posted on LinkedIn late last week that the studio was conducting its first layoffs in its 20+ years in existence.
“Schell Games had their first ever layoffs today. I was not let go but my heart goes out to my former coworkers who were,” said Principal Engineering Manager Allison Salmon. “This has happened not because of anything you did or did not do. Our industry (and beyond) right now is hemorrhaging. I’m sorry to not have gotten to work with you longer.”
Schell Games CEO Jesse Schell confirmed the layoffs in a statement to Good Virtual Reality, noting it’s affected 10 percent of the studio:
Unfortunately, we found it necessary to do a 10% layoff for rebalancing purposes. After the layoffs we have about 125 staff. In 24 years as a studio, this is the first time we’ve found it necessary to have a layoff, so it was very difficult for everyone, because we lost some really great people. We had been on a path working on a smaller number of larger titles, but the way the industry is right now, it became very clear that working on a greater number of smaller projects is what will be sustainable, and that requires a different balance of team members than we had. VR is still a meaningful part of what we do – we have a new VR title in production right now, and have proposals in place for a few others. There was a time when headset based VR was 80% of our work, but at the moment it is more like 30%. We are doing more and more work that is VR adjacent, such as projects involving interactive projection for location based entertainment, which we think is a growing trend.
Notably, Schell has been a staunch supporter of keeping jobs at all costs. Speaking to GamesIndustry.Biz in 2024, Schell characterized layoffs as a last resort choice.
“At the heart of it all is choosing not to put jobs at risk,” Schell said in 2024. “We’ll put cash at risk when we make a game, but we don’t put jobs at risk. Even if our own IP brings in zero dollars, we still haven’t put any jobs at risk—we still have a path forward where we’ll be able to keep people on. So, in a lot of ways, it’s a choice.”
In addition to the I Expect You to Die trilogy and Among Us 3D (previously Among Us VR before adding flatscreen support), the studio is also known for horror-themed VR puzzle game Silent Slayer: Vault of the Vampire and Project Freefall, a free-to-play party game featuring both VR and flatscreen support.
Schell Games isn’t alone in its recent transition away from primarily developing VR titles, as many studios in the segment have suffered in light of Meta’s rash of VR studio closures earlier this year, which has not only included multiple project cancellations, but also signaled a wider shift in the VR games funding environment.
Meanwhile, social VR platform Rec Room, VR veteran and Alien: Rogue Incursion studio Survios, and Metro: Awakening satellite studio Vertigo Studios Amsterdam have also shutdown.
GTA 6 will surely be among the most asked for VR ports of the next decade, and that made a parody in the newly released gameplay showcase especially vicious.
Developer Rockstar Games today finally made its big GTA 6 gameplay reveal, showing 26 minutes of gameplay from the highly anticipated title. In just two hours, the extended look gameplay showcase has racked up 1.5 million views on YouTube; a glimpse of just how many people are excited about the game.
A major part of the allure of the GTA series is the incredible attention to detail in a complex city simulation. GTA 6 is clearly turning that up to 11, loading the world full of detailed buildings, cars, people, animals, weapons, clothes, lights, and much more, all governed by systems that make them feel interactive and alive. And with an entirely new level of graphical fidelity compared to its predecessor, it’s practically begging to be experienced in the most immersive way possible: with a virtual reality headset.
Despite our hopes (and prayers too, I’m sure), GTA 6 is showing no signs of actual VR support. But that didn’t stop Rockstar from having a little fun at the expense of VR gamers. Hiding in the extended look gameplay showcase at 17:27 was a quick glimpse of a character wearing a VR headset partaking in a whole different kind of… simulation.
Courtesy Rockstar Games
The headset depicted is unmistakably modeled after the original Oculus Quest, Meta’s first standalone 6DOF headset, which was released back in 2019.
Curtesy Meta
Despite official VR support for GTA 6 not being anywhere on the radar, you can bet this one is prime time modder fodder. GTA 5 has seen a wide range of unofficial VR mods over the years, and I can guarantee GTA 6 will get the same treatment. The only problem is that we’re going to be waiting for a while longer; GTA 6 is set for release on November 19th on PlayStation and Xbox, but the PC release date is so far unconfirmed—and unlikely to arrive until at least 2027.
Google is reportedly testing a new ‘Listening area’ mode for Google Live Translate on Android XR, something that sounds like a headlining feature for the company’s upcoming fleet of smart glasses.
Google has always said it’s bringing real-time translations to its Android XR, so no surprise there, as the company promises its slate of smart glasses will serve up both translated audio matching the tone and pitch of the speaker’s voice as well as the ability to translate text from things like menus and signs.
Now, digging into the 10.32.66 version of the Google Translate app, Android Authorityhas discovered Google Live Translate is reportedly being developed to offer two distinct listening modes: ‘Front only’, which translates speech directly in front of the wearer for one-on-one conversations, and ‘Surrounding area’, which translates speech throughout the nearby area, potentially using the glasses’ full microphone array.
Granted, the feature was found in apk code, which means there’s no guarantee it will ship. It does however seem to fit into Google’s broader effort to expand Android XR ahead of upcoming smart glasses, which thus far include a variety of frames shipping this fall from Gentle Monster and Warby Parker. Additionally, frames from Gucci parent company Kering are also reportedly in development.
Considering Google’s strength in live translation, it’s a good bet the company will be looking to pack in every bit of functionality as it seeks to compete with Meta’s fleet of smart glasses, which also feature a live translation feature.
Notably, live translation on Meta’s smart glasses is more akin to the ‘Front only’ one-on-one interactions described above, which work by serving up translated speech to the user through the glasses’ open-ear speakers as the other participant can see translated transcript on a user’s smartphone.
Meta has introduced Meta XR Operator, an experimental tool designed to let AI coding agents autonomously build, test, debug, and visually verify VR apps.
The News
Using AI agents, developers have been able to speed up code-reading and writing in addition to running tests and fixing bugs, although verifying that all of it actually works has been a missing step.
Now, Meta announced it’s introducing Meta XR Operator, an OpenXR API layer that is now available as an experimental component in the Meta XR SDK (v205).
XR Operator lets any Model Context Protocol (MCP) compatible AI agent see, navigate, and interact with running VR apps in Meta XR Simulator, letting agents autonomously build Unity scenes, launch, screenshot, identify issues, fix them, and verify the fix is accurate, Meta says.
Beyond rapid iteration and debugging, Meta says XR Operator includes natural-language testing so developers can describe a test scenario and the agent executes it, returning pass/fail evidence with screenshots.
Meta says it did early testing with Beat Saber team Beat Games as well as others building on the Meta XR SDK. Some of its earliest tests (seen below) included building an interactive Tic-Tac-Toe app in VR, wherein the agent wrote the game logic, aimed the virtual controller at cells, pressed “A” to place pieces, and played through to a complete win/lose state.
It’s not a ‘complete’ verification solution just yet, as there are still a few major caveats. Operator XR can’t hear audio, properly evaluate animation/motion, use individual finger tracking, or reliably catch subtle visual defects. Moving interactions are also difficult since it operates too slowly for real-time interaction, as Meta says it works best with “static, deterministic scenarios.”
It also only works in Meta XR Core SDK for Unity, although Meta says if you are using another game engine backed by OpenXR, including Godot and Unreal Engine, you can download the standalone package and do your own integration.
As much I hate AI for slop-ifying almost every creative realm, we’re still not at the ‘one prompt game generation’ era just yet, which I imagine will come with a new phase of shovelware capable of eclipsing the already dizzying number of Gorilla Tag-based content on the Horizon Store currently. Tools like Google’s Genie 3 world model developed by DeepMind can AI-generate limited game scenes right now, which seems fairly prophetic.
For now though, Meta is focusing on building AI tools so developers can automate the more mechanistic parts of game development, as it seems the company is focusing more on “building better shovels” rather than attempting to mine gold directly like it did when it started buying up VR studios and tossing out multi-million dollar development budgets for exclusive content, starting with Rift in 2016 and ending with Quest earlier this year.
The dream scenario: a small developer will use these AI tools to produce something quickly, cheaply, and at very high quality, thereby stocking the Horizon Store with the sort of content that Meta didn’t want to directly pay for. I’m hoping to learn more about these sorts of initiatives at Meta Connect 2026, which ought to packed with AI-related game dev sessions when it kicks off September 22nd.
That said, you don’t have to wait to see some of the early positives of AI-assisted game development. Indie modders have been using AI to great effect to port flatscreen PC games to VR, with the list growing rapidly day-to-day, as it seems to be lowering the barrier of entry so mods come out better and faster than ever before. That, at least to me, is a clear win-win for both consumers and game studios, which are either unwilling to provide native VR support or otherwise license studios like Flat2VR to retroactive do so.
CM Games announced its survival shooter Into the Radius 2 is finally coming to PSVR 2 next month.
Into the Radius 2 is slated to arrive on PSVR 2 on September 24th, which is set to include the full single-player campaign at launch. The studio says the game’s planned two-player co-op should arrive sometime in Q4 2026, letting players explore the Radius with a buddy later this year.
Like the full version coming to Quest on Aug 27th, the PSVR 2 release is set to feature a fully voiced story campaign with 10 main quests, 178 side missions, and five Security Levels.
Set across three main locations and two sub-locations, the latter of which become available as players progress, users take on the game’s most frightening (and deadly) anomalies with over 50 firearms across 25 weapon types, letting you also customize your equipment with attachments, spray paint, and stencils. Like the original, you’ll need to maintain your weapons in the field though, requiring cleaning and servicing so the front end always goes bang.
Outside of the world’s ghostly anomalies, you’ll need to navigate distortion zones, hunt artifacts, manage scarce resources, and even your own hunger as you go on dangerous night expeditions. Night vision devices, flare rockets, and dual-mode IR lasers can help, but the threat of 12 different enemy types will keep you on your toes any time of day.
Notably, CM Games says the PSVR 2 version has been adapted specifically for PSVR 2 Sense controller haptics, making weapon handling, reloads, and misfires feel more tactile, while headset feedback “brings the dangers of the Radius closer than ever.”
Pico was set to debut its next flagship standalone XR headset early next month, however now the ByteDance subsidiary says it’s postponing the reveal and release date of its long-awaited Apple Vision Pro competitor.
The News
Initially teased earlier this year as ‘Project Swan’, Pico announced last week it was putting on a big product launch event for the newly-named Pico Space Pro, which was set to take place in Beijing on September 2nd.
There, we expected Pico to fill in the gaps of the headset’s spec sheet, global release plans, and pricing for what is surely one of the company’s most expensive XR headset’s to date.
Now Pico says it’s adjusting the product release date to sometime in Q4 2026, citing the need for more time to push a “major upgrade” to the software experience.
Here’s Pico’s announcement below, machine translated below from the original Chinese, courtesy Antony ‘Skarred Ghost’ Vitillo:
PICO Space Pro Release Date Adjusted
Hello everyone, to allow PICO Space Pro to be presented to you in a more complete state, we have decided to adjust the product release date to the fourth quarter of this year. Over the past period, the hardware and software of PICO Space Pro have reached a high level of completion, but during the final stage of experience verification, we saw an exciting new opportunity and wanted to bring it to everyone in the initial release. Therefore, we decided to spend more time on a major upgrade to the software experience. We hope these investments will ultimately lead to a better product experience and look forward to bringing you some new surprises. We sincerely apologize for this adjustment to the release date and for the wait it has caused, and thank you for your continued attention and patience. In the coming months, we will expand our Pioneer Experience Program, inviting more users to experience PICO Space Pro early and work with us to refine the product.
In the meantime, Pico is expanding its ‘Global Early Access Program’ closed beta test, which includes sending pre-production units and software to applicants for external testing.
As the company’s next flagship, Pico Space Pro is the slated to arrive with microOLED displays boasting 4,000 pixels per inch (PPI), an average ~40 pixels per degree (PPD), and a dual-chip architecture: a custom XR silicon for perception and imaging (claimed ~12 ms perception latency) and separate flagship SoC with “more than 2× CPU and GPU performance vs XR2 Gen 2.”
Pico Space Pro is set to not only compete against Apple Vision Pro, but also Samsung’s Galaxy XR headset which released late last year as the first to run Google’s Android XR processing system, both of which largely appeal to prosumers and enterprise.
My Take
While Pico is undoubtedly going to focus on the Chinese domestic market with Space Pro, the device is also launching globally. I’ve always thought of it primarily as a Vision Pro/Galaxy XR competitor, but it’s also set to be a direct competitor to Steam Frame across a number of regions too. That’s not a comfortable spot to be in if you can’t go toe-to-toe in the software department, which Valve has in spades, as it’s delivering a native Steam user experience on standalone for the first time.
That said, I don’t know if I entirely buy the company’s supposed launch day software woes as the full reasoning behind the delay, as Pico could simply release updates post-launch to literally no one’s surprise.
Leaked ‘Project Swan’ render | Courtesy Luna
I think it has more to due with actively avoiding the very present risk of being upset by Steam Frame’s launch, which is due any day now. Imports of literal tons of units into the US, FCC certification, a constant influx of the best Frame-compatible games via Valve’s ‘Great on Frame’ page, and now a number of leaked Steam Frame unboxing and user setup videos all point to Valve’s long-awaited reveal of both the release date and price of one of the most-anticipated VR headsets in recent memory.
And at least from the limited spec sheet mentioned above, Pico Space Pro sounds like it will be a very capable device. Still, it’s competing against Valve, which has more good will stored up among consumers than almost any other company in the space right now. Stepping aside and regrouping as the market digests Steam Frame (for good or ill) may just be the best move Pico can make right now.
