LBX Collective
The LBX Collective aims to inform and educate, create opportunities to connect with industry peers, and to spur collaboration, discourse, and cross-pollination of ideas in the location-based entertainment and experience industry.
Join our online community at LBXGalaxy.com!
Proudly sponsored by Intercard!
LBX Collective
Sound Off #73 - Should Console Gaming Exist in LBE?
Sponsored by Intercard!
Kevin and BW debate whether competitive socializing venues should embrace console gaming while exploring the legal pitfalls and nostalgic opportunities this strategy presents.
• Console gaming in LBE presents a paradox - if an experience is achievable at home, what value does a venue add?
• Facilities offering nostalgic experiences with retro consoles can create value through shared memories and communal gaming
• Many console-centric venues operate in legally questionable territory regarding Nintendo and other IP licenses
• Economic pressures are reshaping the entertainment landscape with price increases across gaming companies and declining tourism
• Major theme park operators are strategically positioning for 2030, with Disney announcing its seventh park in Abu Dhabi
• Immersive entertainment enclosures show impressive ROI, with some systems paying for themselves in just four months
• The VR arena market includes dozens of manufacturers beyond well-known brands like Zero Latency and Sandbox
• Meta's VR division continues to lose billions despite selling 20 million headsets, potentially missing opportunities in location-based entertainment
Are you on the edge of your seat Because we're about to Sound Off with Kevin Williams covering today's latest trends in location-based entertainment Brought to you by the LBX Collective your community to connect, engage and inspire. All right, everyone, let's buckle up.
Speaker 2:All right, well, welcome everybody. To Sound Off with Kevin Williams, it's November 73 for May 13, 2025. Welcome, kevin. How are you, brent? Oh, doing well, doing well and looking forward to another great Change my Mind. So what are you going to do to change my mind today?
Speaker 3:Well, it's a tricky one Consoles and pizzas. Can the competitive, socializing market embrace console gaming? Sadly, it's one of those questions, like in one of those internet surveys. Can this do that? The answer is yes, it can, because we do have a number of facilities that are open that only offer or offer a majority component, which is playing consumer console games. But I have issues with those, brandon, your opinion.
Speaker 2:Oh, I think it's a terrible idea. I think you know when we talk about having out of home entertainment or location based entertainment being something that you can't experience at home. This is the issue with just putting VR that's connected to Steam in a location as well. Right, this is the type of. If I can do this at home, why am I going to come out and pay to do something I could do at home, while also paying more for the food I'm buying than I could potentially buy at home from having a Little Caesars brought to my house and be able to hang out and play with my friends?
Speaker 3:had beaten into me by years in the industry that we are in the unachievable at home entertainment sector, which is, if you can do it at home, you're going to do it at home, and what we're trying to do is offer an experience that is above what you can do from a consumer perspective. So putting consumer entertainment machines into a location-based entertainment seems an anathema to that. But that said, if you can, you know, do the retro embrace where you allow them to play machines that they don't own and games and experiences that they may share memories from. This becomes a nostalgia environment. So facilities such as NQ64 and especially Four Quarters they have a nostalgic component to them, which also includes the ability for you to play classic console machines. I have a problem with some of these facilities, a console-centric gaming site being shown around by the operator. I usually put my foot in my mouth by asking the questions how much? Do you pay for the?
Speaker 3:Nintendo license and at that point either sweat breaks out on their top lip and they want to change the subject and offer me a drink, or I am told it doesn't apply to them. It's okay, these games are free use. If you think that Nintendo treats their content as free use and that you can make money off of them in a console gaming facility, then you're living under a roof. There's no way. What will happen is, as soon as you make enough money, you will appear on the radar of the legal team.
Speaker 3:I was always told at Disney when I was there that you know, the lawyers don't get out of bed for anything under a couple of millions. So as soon as your facility is made a couple of million, then I expect that you will be visited by the Sega, nintendo, atari and whichever other console product that you're using in your facility. Unless you've come up with a decent legal positioning, unless you have done the deal with the legal team at the respective console companies. But no one ever gets away with it, and part of the reason why I asked the question whether this is a successful add-on. I can see these facilities are making money out of it, but will it be a successful amount of money out of it.
Speaker 2:Yeah, absolutely All right. Well, we will dig into the latest trends here right after the break from Intercard. Increase customer spending, guest satisfaction and boost revenues by up to 30%. Intercard is so proud to be serving the amusement industry and if you aren't already part of their global family of customers, they hope you will become one soon. All right, well, let's dig into yeah, let's dig into some tariff trends.
Speaker 3:So straight into it.
Speaker 3:And the big question is, we have now decided to remove this section and we're going to focus on the economy rather than just focusing on the tariffs, because the tariffs have led to a situation now where we are seeing an economical situation rather than just a specific localized north american situation, and some of the indicators that we're seeing of the impact of the current situation is in the video game industry.
Speaker 3:Our cousins in the video games industry have already started to put their prices up, so our friends at atari games, a company I used to work for, has decided to up the prices of certain of their retro and certain of their new releases All of those console facilities running games from Atari. I think better take note of this. Our friends at Microsoft have also made it clear that the pricing on their console and their content will also be rising in the foreseeable future, and they are also blaming COVID. And, of course, we have the up and down situation in Hollywood, where, from video games to movies and streaming are also saying that they will be seeing changes in the streaming prices based upon the current financial situation.
Speaker 2:Well, I don't know how you apply a tariff to a movie. I guess we'll figure out how to do that Services 2A movie. I guess we'll figure out how to do that Services.
Speaker 2:Well, that's why tariffs are typically applied to physical goods that are coming through a port, and that's you have some sort of entry and so you know how to tax that. But anyway, and I think also Nintendo Switch 2, I would not be surprised if we see a price increase on that console at some point down the line. They haven't made it official 50-year-old, I haven't included Nintendo on this one.
Speaker 3:They have just announced that they're expecting to sell 15 million of these Nintendo Switch 2 portable game decks on launch Whoa. They think that they're going to be breaking some serious records and I think that they're also positioning themselves where they're not going to change their prices. It was rumored that, like some other corporations, they pre-stored products based upon the knowledge that tariffs were going to be applied, and they actually flew in quite large quantities of the fabricated units into the key territories beforehand so they wouldn't be hit by shipping problems. Nintendo are smart guys when it comes to uh, their financial as well as their entertainment developments. But again, watch this space. We will be talking about what's happening with them. Regarding the economics watch soon.
Speaker 3:Indicators of recession are things that everybody is using in the financial district. We're looking for indicators that tell us how bad or how good the financial conditions are, how people are spending. So when you kind of see McDonald's seeing a slump in their profits, you take that on board as a possible indicator of situations happening. And for the 2008 recession, one of the indicators that we were using to gain information on the state of health of the market was sex workers, another form of the entertainment industry that we don't embrace as much as some others do, but in this particular case, when they see a downturn in tips, when they see their regular customers holding back on spending or attending the venues, then that is treated as an indicator of people holding onto their cash a little tighter because they don't feel particularly comfortable about it, and I have learned to be mindful of these indicators when making decisions on the financial sector. And then the big one for many of us regarding indicators is, of course, the slump in Las Vegas tourist business. We've touched upon this before, but now we have a lot more data available to us from the Visitors Authority in Las Vegas and they have put a number on it. They have seen an 8% drop. They have seen a cratering Canadian visitation, which they usually see quite a high amount of, and they're seeing questioning of attendance from international guests, especially from Europe and UK, get into June.
Speaker 3:But it is telling us quite considerably that there is a change in attitudes towards travel and we may be entering a staycation period of time, though again that is international visitation.
Speaker 3:We still don't know if the Americans now with maybe more bang in their buck, are going to use that for foreign travel and the reason for the Union Jack I still call it the Union Jack, not the Union flag at the end there is, as we're recording this session, we're just learning of the first of the sub trade deals being signed by the government with the UK.
Speaker 3:The reason I say sub deal is because it isn't a full trade deal, it only pertains to certain things and it is also quite limited in scope, but it is the first of what we're led to believe will be a number of new trade deals signed under the the new relationship, and I wouldn't be surprised that, as each one of these deals is signed, that we don't see a spurt in attendance from those particular countries.
Speaker 3:Anyway, moving on, and one thing that I wanted to include in the indicators here was that we've also got the first examples of the ships appearing in our harbors, based upon the impact of the fall tariffs, and we have seen, of those Chinese shipping deliveries, quite a low amount of containerage involved, so in some cases 50% less than the capacity of the ships. And again, this is pointing towards what we expect to see was the shortening of shelves. Those Barbie dolls will not be so plentiful on the shelves in the next couple of weeks and at the same time, we're seeing the ripples of this being felt by the haulage and the parcel delivery sector, with the news that was announced last month but I've only just come across this information that our friends at UPS have divested themselves of about 20,000 staff and also proposing to close down about 73 sorting facilities based upon the changes that they're seeing in the delivery process that they're going to be going forward, as well as the ending of their relationship with Amazon, as Amazon also girds their loans.
Speaker 2:I mean, 20,000 drivers is not an insignificant number. I mean, that is a huge indicator of a shifting economy, and if we want to believe anything different, then I just don't know how we can do that. And even if the numbers that are quoted at 80% decline in travel books from Canada to Florida, for example, that Moskowitz put out there, even if that number is inflated, we know that that number has dropped. And I think it's interesting that something like a tariff or aggressive tariff policy or trade policy can ultimately impact tourism and travel as well, not because of an economic impact, but because of the fact that they just don't want to come here because they're frustrated with the US, and so they look why would we come to the US, spend money there, if ultimately they're treating us like a stepchild? And so I think this is probably an unexpected impact of this type of trade.
Speaker 3:It's the domino effect. When you allow the bull in the China store, some Ming vases are going to get broken, and the issues here is I don't want to make this political I'm visiting this from an economic standpoint of how it impacts us. It's the reason why we've pivoted to economics watch rather than tariffs watch, but we have to be mindful that this economic situation has been brought upon us by decisions made that started with the tariff. Anyway, getting away from all of that and getting into all of this and the biz and we have seen some developments in the theme park industry as it positions itself for what it sees is the 30-year rule, or the positioning for 2030, as I like to call it.
Speaker 3:Universal have already drawn their line in the sand with the launch of Epic Universe, which throws its doors open officially this month and has already seen vast attendances from the early pre-screenings. We have the announcement of the 2027 opening of the London part, which has now just completed the final stages of negotiation and we should have full confirmation of its opening and rollout soon. And then we have the surprise announcement this month that Universal is also entering the Indian diaspora with a park that they are hoping to open as soon as 2027. This is an interesting one for me because I've been talking about in our open and shots, the growth in Indian FEC and Mule, which use leisure entertainment facilities, and seeing Universal throw their hat into the ring with a regional part through a partnership with real estate and a local enterprise operator out there kind of tells us that Universal is really gunning for the top slot.
Speaker 2:Yeah, I'm just waiting for the Universal UAE announcement or something in the MENA region, right? So when are we going to hear about Universal in Abu Dhabi or in Dubai or something like that?
Speaker 3:They held off from being one of the many that jumped in in the early stages into Dubai, like another company that held off from entering the Saudi market. Oh, but then they have, yes. So, moving from our friends in Universal, we moved to the big mouse in the house, and Disney made the announcement only a matter of hours ago from this recording, that they would be partnering with Mural, the Abu Dhabi entertainment conglomerate, out there to open their seventh park, their seventh theme park, in Abu. Dhabi. This is a major moment for Disney. This is going to be the first theme park that is going to have to think on a self-sustainable platform, the first one that will be aimed at the Middle East market. This will also be a very revolutionary high VIP environment. They are talking about a personalized experience.
Speaker 3:There are a lot of things to unpack from this announcement. That's only happened a few hours ago and I will try and unpack some of those at a later date when we actually have more than just a rough, high altitude artist's impression of what they're going to build. Fundamentally, this is very similar to the relationship that Disney has had with their Chinese, as well as their Japanese, partners, where they have found an operator that will own the park and control the staffing, the payments and all of that type of stuff, but the funding and the design and the ip will come directly from disney. So it'll be disney imagineers that will be developing this, but it will be operated by maya. You know, some competitors said this is a unique relationship. I point them to what has happened in shanghai disney and what has happened in tokyo disney. I'm talking about the partner that Disney has decided to work with Maya, maya, maya, maya, maya.
Speaker 3:Sorry, I am butchering the name. Even when we had a chance to visit these facilities when we were last out there, I kept on getting it wrong. I apologize, but this particular operation has quite a considerable entertainment ownership in Abu Dhabi. They are best known for their ownership of the Abu Dhabi Ferrari World facility, the most successful and the most iconic building, I would say. When we first saw that, when it first opened many years ago, when I was out there, it was just amazing what they achieved and what they continue to achieve One of the world's fastest roller coasters the themality is hard in relationship with Ferrari and the Formula One operation out there. It's amazing. They also operate the Warner Brothers World facility out there as well as the SeaWorld facility and a number of entertainment regional resort hotels. This is no slouch to the entertainment game. Disney has picked an A-lister to partner with, as you would expect, and I think that the Abu Dhabi Disney World theme park will be a major jewel in their crowd going forward.
Speaker 2:Yeah, having visited both Ferrari World and Warner Brothers World, didn't get a chance to do the Sea World, but having visited those two, they're both phenomenal. I mean, the Ferrari World architecturally is beautiful and stunning. The actual environment is incredible and the theming inside of an all indoors water warner brothers world is also top notch. Um, yeah, and it's good to see that they're finally getting the foot traffic that they wanted. I mean, when I visited them, many, many pre-covid they uh these were were pretty empty. Warner Brothers World felt a little bit like a ghost town. I'm like, oh my gosh, how are these guys going to survive? Clearly, yaz Island was just getting started and has really been growing significantly. Just as a quick point of clarification Mural, mural thank you, I keep on doing that, myla Miller.
Speaker 2:Is actually going to be footing the entire financial bill for the new Disney in the Oz Island as well. So Disney is providing the green of development and control and IP, but Mural is actually putting forward the entire funding for the new park.
Speaker 3:This took place prior to an investor call and it was clear that Muriel finally say it right were going to foot the bill. And then there's been some clarifications that there may be some additional aspects that Disney will fund. Whether that will be maybe Disney adding a port for their cruise line ship or adding a retail gulch to this, which would be a separate expense, I am not sure about. But could I just say watch this space for further details. The news is still very fresh, moving on and we touched upon it in Open and Shut.
Speaker 3:But the first of the Sega flagship retail attainment facilities for its Doros opened in China, in Shanghai, and we got to see that it is really a retail attainment. It does have interactive entertainment as well as the merch toy retail components to this. It's an interesting move by Sega, kind of returning to the bricks and mortar business after selling off their amusement facility operation to Agenda. But again, we're looking very closely at this test first test facility. Again, we're looking very closely at this test first test facility to see how it will be reflected across the rollout of this chain that Sega is expecting to develop.
Speaker 2:Yeah, this feels very much like a Lego store type of a facility where you get the chance to play a little bit with some Legos, build some things, but really it's a big giant retail outlet that has all of their IP.
Speaker 3:How the modern toys are us are how modern Lego retail facilities were, how the Disney stores used to be. You know, it's a little bit of play but a lot of sale. I expect that Sega will affect the hard sell, especially seeing the number of IP that they now hold that are being turned into motion picture properties, which just adds to the provenance. Some sad news, but some inevitable news. Six Flags Entertainment made it clear that they were going to be restructuring following the merger and the reinvestment and the first of the shoes are dropping and Six Flags Hurricane Harbor in Maryland is one of the first of the victims. Sadly, the corporate speak is that the facility does not fit the strategic plans for long term growth that the corporation has. I am sure that this facility will not be closed down, but we'll just change hands because it has received major updates and it is an ongoing business. Updates and it is an ongoing business.
Speaker 2:it's just that the six flags entertainment operation, as is now, does not see this as being uh, suitable to what they want to achieve with their world domination plans yeah, it's not surprising at all and I think many people are just have been who live in and around six flags, six flags, six Flags tend to be well, most of them are regional quote, unquote regional parks.
Speaker 2:People like to go and a lot of repeat visitation from the local communities that they're in, and I think there's a lot of nail biting when they heard the merger, because I think they expected some of their local Six Flags to close, and so this is the first one to drop, and I would not be surprised if there's at least another one or two of these over the Flags to close. And so this is the first one to drop, and I would not be surprised if there's at least another one or two of these over the next year or two.
Speaker 3:I don't want to you know, the Six Flags operation, the whole of the new chain, now has investments in a number of operations hotels, resorts and suppliers that will, after the accountants are finished, will be surplus to requirements and sadly, this is the first example. Moving from the biz to the tech, and I'd like to touch upon the ownership of space within your facility, and we're lucky enough that our friends at Innerwise have dropped their trousers a little bit to give us transparency about the success that they're seeing with their particular immersive enclosure. I'm not going to go into the details, you have a pause button there. I'm not going to go into the details, you have a pause button there. You can look at that in your own time. But it gives us some basic takeaways that the return on investment, ie the machines paying itself back, can be achieved in as little as four months if these machines their immersive enclosure, projection, mapped game experience for six players.
Speaker 3:Two points to take away from this. Number one, that these machines have been built to be attendant-less. I am a man that still likes to have an attendant nearby whenever you have people using entertainment systems, but these machines are quite turnkey in their operation. They sit in a very small footprint compared to what they're doing. So six players entertained for the period of time, within a nice footprint.
Speaker 3:You can charge quite a high premium for this immersive entertainment experience, so in the right place. Six months and the machine's paid for itself is nothing to sneeze about, said the man suffering from hay fever. But the interesting thing here about it is that we're seeing that the company has an install base, since the machine was launched, of 45 units internationally units internationally and that they have another 28 orders in their back pocket with the hope that they well, not just a hope with the secure feeling that they will have 100 units in the market by the end of this year. Tells you a lot about how the operators are looking at the real estate that they're prepared to allocate to what I call immersive entertainment enclosures but also sits in the same footprint-ish as virtual reality arena systems.
Speaker 2:Yeah, this is interesting, especially given the fact that Cineplex is dropping clusters of these into their rec room facility.
Speaker 2:This is reminiscent of when we did an FEC summit in San Antonio a few years back and we visited Santicos and they had some immersive game box, those immersive game box enclosures and they had a cluster of them in their facility and they likely weren't seeing the same type of quick return.
Speaker 2:And I think one of the reasons given is the shorter gameplay that you can have within a wise People can come in, they go to a movie and then they come out and they're going to hang out and maybe grab something to drink. But they can do this real quick 15 minutes, 10 minute games, much more rapid gameplay but then potentially do it a couple of times over and over, swiping that card for $6, $9, whatever. You're charging for this type of experience, and so I know you prefer to put somebody around it, like maybe an old attraction barker or something like that. But having some at least component of unattended capability is also a benefit for those that maybe don't have quite the right type of floor layout that allows them to be able to have an attendant that can monitor both this game and maybe some other things to be able to save on staffing.
Speaker 3:Knowing Cineplex and how they evaluate the entertainment that they put into their facility. Real estate within their spaces isn't a premium because they generate good money from that. They previously had a relationship with the Void on the virtual reality side, where they populated their facilities with those machines. They didn't see these type of returns. I will tell you that they have clustered these machines together because they work well together, and the nice thing about clustering is that you can have one member of staff monitoring these machines just to ensure that the controllers are put back in place and that there isn't a coat or a drink left inside the enclosure the enclosure, you know. You see their map of how they compete against laser tag or bowling or against free roaming VR arenas, and there are quite a lot of free roaming arenas out there. I've talked about the big leaders, the sandbox VRs and the zero latencies, but it's also time that I at least zip through some of the others out there. Not all of them, but I'll pick on some that I haven't touched upon. Our friends at Synthesis VR, who are both a distributor of content for the VR arcade and free roaming market, also support their own free roaming arena platform. They had some announcements. They've taken on some new content. They have a new free roaming or two new free roaming games, including the popular Arizona Sunshine products, and they've also signed up some new licensed content which is available from their extensive library. They are a barometer for me. Now that Synthesis and Springboard VR have combined their entities, they are a one-stop shop for VR arcade operators who need content and remember, these machines get through content quite quickly because they're interactive entertainment. We have our friends at VRE Sports Arena. Phenomena have been rolling out quite a few of their machines and they were shouting from the hilltops that one of their games, versus, which is a competitive shooting game for multiple players in a free-roaming environment, has seen its three millionth play. So again, we're kind of seeing how these free roam arenas in the right locations can generate the revenue. You can kind of see that they also offer a flexible sizing so all kinds of sites can take on board this. They've also announced a new Cops and Robbers game from Knucklehead Studios. So this is a consumer game that has now been reconfigured for amusement application. We have Active Entertainment with Active Esports Arena, where this is more of a sport than just a traditional free-roaming shooting the zombies or shooting the robbers kind of approach. This system has been deployed both as an e-sports entertainment activity as well as a competitive entertainment experience. To go into facilities, our friends at Virtual Game Park have just announced a partnership with pico, so they have pivoted away from the htc system to the pico headset and they are also actively rolling out their arena scale um vr enclosure system. Uh, metaphors are not a name that many of our viewers will be familiar with, but they are also quite a large deployer of arena facilities. For the smaller type of venue, for the more independent entertainment facility, we'll turn to this Again. These guys have decided to offer both a MetaQuest 2 system but now also have to upgrade to a Pico solution. The MetaQuest 2 has been discontinued by Meta, so there is a need to find an alternative headset.
Speaker 3:And then finally, in this very quick zip through of the kind of arena systems out, there is Warpoint. Now, many of you may not be familiar with warpoint and may be surprised to know that this company has about 260 plus venue systems out there of their arena system as well as warpoint entertainment facilities, which have both arenas and vr and amusement systems. This is a Russian operation and a lot of these venues are in Eastern Europe with, I think, only one Warpoint arena facility in North America and maybe one in South America, a couple in South America, but again horses for courses, dependent on how deep your pockets are to pay for and also what you want from your free roam system. And the interesting thing about Warpoint is that they do use the MetaQuest VR system, where many operators would shy away from using the MetaQuest system because of the problems or the issues of using the consumer hardware in commercial entertainment.
Speaker 2:Yeah, this is quite a rundown. In fact, I'm not familiar with a couple of these. So I was not familiar with Warpoint, although we did leave out HeroZone.
Speaker 3:I'm not sure if this isn't a complete list. I wanted to touch on companies that I haven't mentioned before. They they have sent the horse's head to my house, uh for leaving them off. When I'm talking, uh about, uh, some of, uh, the arena systems out there, you know there's a habit I do keep on saying hero, I do keep on saying HeroZone, I do keep on saying Zero Latency, I do keep on saying Sandbox, and I wanted to touch on some. You know there are other companies out there. If you need an exhaustive list, then you know, hit me up and I'll pass you on to a couple of the lists out there. I know Bob Cooney has a list of some of the systems out there. I know of some other resources I use for a full list of arena VR platforms that are out there.
Speaker 2:Yeah, I will say the business model for MetaForce is really interesting. It is, you know, no royalties, no franchise fee, only a month subscription fee. So they have a one time upfront which is relatively reasonable, depending on how long you're going. You know, 12 months, 12 month subscription, three month and then 24 month subscriptions, but then and then just a per month after that for the initial, you know the initial thing unlimited plays. They'll, they'll provide all current and new games, remote configuration.
Speaker 3:Anyway, very interesting model for you know, for this, these, companies cut their cloth to meet their customer base and where most of the North American VR arena systems all 20 odd of them usually fit the subscription model, recurring subscription model and quite a high price and an installment fee where some venues don't have those type of deep pockets and so they can turn to alternative platforms. You know I could mention TrueVR Systems. It's a European company with an incredibly large install base and a very flexible. We have an incredibly large install base and a very flexible package available for that. You know, if our audience wants me to, you know do a complete rundown of every international VR arena system from our database. I'll gladly take that on advisement. But there are, you know, just a cursory glance at my database of platforms in that market, we're in the high 60s of manufacturers, not just different types of machines, but of companies out there that offer this, and it is important that we know that there is more than just the usual suspects when it comes to support out there. As I said, warpoint are, you know, ballsy enough to utilize the MetaQuest system? Many people who've listened to my casts in the past or read the Stinger report know that we are mindful of the issues of using the MetaQuest systems in location-based entertainment. Meta has a commercial entertainment version of their system but it comes with a lot of stipulations and a very high subscription price and many of the people that have tried to use the official MetaQuest enterprise systems in their facilities have found them more expensive than other systems with all of the other additional prices where some people who just cut the corner and say the operator can go down to the local electronic store and buy a consumer system and take the risk. There is the danger that you will receive a cease and desist letter from Meta if you are using a consumer system in a commercial entertainment environment. I can't warn you enough about that. It's just something to be aware of.
Speaker 3:Talking about Meta, and they've been going through some major changes regarding what's happening. Meta had an investor call and they've been having to admit the amount of profits they've made compared to the amount of losses that they are incurring. And you know, if you look at the green of profits from their reality labs, vr operation, to the vast billions of red that drips below, you can kind of see that it doesn't look like you can carry on bleeding this much money without seeing some return. They kind of admitted for the first time that they have seen a major decline in sales of their VR systems since their launches. They countered that by saying that they've also seen an uptake in their AI Ray-Ban systems. But that's oranges and Apple evaluations.
Speaker 3:We're talking VR here, and so the revenue is down. They've been making some serious layoffs within the reality labs operation that handles this, and we're waiting for September, when they have their Connect conference, to really see where the writing is on the walls. So all of you guys that are hoping that you can get away with using MetaQuest VR hardware consumer hardware in your facility if you're not waiting for the knock on the door from Meta saying cease and desist. If you're not waiting for the knock on the door from Meta saying cease and desist, you may also be waiting for the bricking of your VR system if this company decides not to continue to plow $4 billion-plus into the Reality Labs operation to continue this. I know Mark Zuckerberg feels very strongly about the metaverse, this being the future, but I wouldn't be surprised if he pivots more to an AR and MR future than a VR future. My personal opinion.
Speaker 2:Yeah, it just seems to me that a social network is much more aligned with AR or MR than it is a pure VR.
Speaker 2:I mean, I know that there's things that they try to do there, but I also wonder when you think about the numbers of devices sold, and you also think about the fact that a lot of these location-based VR venues, at least before Pico and HTC's really began to firm up their devices, were using the MetaQuest headsets. And you take Warpoint as just one example 260 locations with what? At least a minimum of 20 headsets probably in each location, if not more than that. You know you're talking about 5,000 plus devices sold to one brand across multiple locations. So how many of their devices were consumer versus quote unquote, commercial? And is that something that they should be if they aren't already looking at internally?
Speaker 3:It has been made clear to over the years that the out-of-home entertainment market is a fantastic place to promote your consumer VR technology and they may be surprised at how many of their sales. The company claims that they have sold 20 million of their VR platforms across their brand since Oculus was taken over by Facebook. I would argue that a lot of that 20 million maybe more than 3%, shall we say of that is people in location-based facilities buying systems to be used in commercial entertainment, and if they only had bit the bullet and extended the hand of friendship, then this could have been a totally different subject. You know, our friends at HTC have seen incredible success from supporting the location-based entertainment market to a point that has forced our friends at Pico to also make sure that they have a very robust location-based entertainment relationship. But our friends at Meta seem to have received poor briefing regarding the opportunities in location-based entertainment, even after they supported the Void in location-based entertainment, even after they supported the Void.
Speaker 3:But maybe supporting the Void and seeing what happened to that may have soured them to thinking about location-based entertainment. Either way, those that have followed my reporting over the years knows that I feel very strongly that this was a major missed opportunity amongst a number of missed opportunities following the acquisition of Oculus and this latest phase of VR. Here am I talking about a considerable number of VR location-based entertainment operators, and I've just listed off companies that are not on the mainstream of that. But you know, you look at Zero Latency with their 116 facilities, sandbox VR with their 60, plus our friends at Warpoint with their 200, our friends at oh God HeroZone with well over 200 installations out there, and you suddenly work out that missing out on location-based entertainment is going to be seen in the future as a major mistake.
Speaker 2:Yep Completely agree.
Speaker 3:Anyway, that covers this particular sound off. Is there any topics that I touched upon that you'd want to reiterate?
Speaker 2:on Brandon, yeah, can we go back and talk more and more about tariffs? No, just kidding.
Speaker 3:Is that the time?
Speaker 2:It's that time, all right, perfect. Well, kevin, another great sound off, always a pleasure, and we'll see everybody else on the next one.
Speaker 3:See you in the next one.
