Article reprint source: Metaverse Daily Explosion

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The TV series "Squid Game" that was once popular on the entire Internet has really become a game this time, and it is the kind that can be played immersively.

At the end of September, immersive gaming social company Sandbox VR cooperated with the world-renowned streaming media Netflix to move "Squid Game" into the VR experience store, using offline venues + VR to reproduce the "Battle Royale" plot under the packaging of games such as 123 Wooden Man and Picking Sugar Cake. Players can team up to experience the thrilling scenes in the series.

According to the reservation page, a single ticket for this experience costs US$50-60, and each session requires at least 2 players to form a team.

When Squidward was first released, it received 265 million views, but the VR experience of the same name created by Sandbox VR had not yet opened up the market: more than 40 stores around the world still had sufficient tickets left, and the co-branded promotional video had only 460,000 views on YouTube. Previously, other products of Sandbox VR had to be booked 90 days in advance, and tickets were hard to come by.

Compared to the past, the IP of Squidward Games is a bit outdated, and the LBVR (location-based virtual reality) model that Sandbox VR focuses on has not yet completely detonated the market. For LBVR social networking, IP is not the only secret to success.

Strike while the iron is hot, big IP derivatives will also be cold

Two years later, "Squid Game" was moved into Sandbox VR's experience store, quickly covering the company's more than 40 stores around the world in California, London, Singapore, Toronto, Hong Kong, Shanghai, etc., with a single player price of US$50 to US$60.

These experience stores are full of high-tech: motion tracking technology is used to capture the player's full body movements, and combined with a high-quality tactile system, it allows VR players to complete games and socialize in an immersive way.

In the Sandbox VR version of "Squid Game", at least two players can team up, wear the equipment provided by the experience store, participate in the challenges in the episode and compete with each other. After the game, players can also replay the game review.

Sandbox VR recreates the classic scene of "Squid Game"

With the well-known IP of "Squidward Games" and the exciting parts designed in the series itself, Sandbox VR's new product launch looks like a hit. However, the reservation situation does not seem to be ideal.

On YouTube, the highest number of views of the official promotional video of Squid Games Sandbox VR was only 460,000, and there were sufficient tickets left in many stores. Previously, other new products of Sandbox VR had been so popular that they had to be ordered 90 days in advance.

Last year, for example, Sandbox VR launched the VR game Deadwood Valley, which brought in $23 million in ticket sales, with an average of 42 players buying tickets per store per day. This single achievement also helped the LBVR company quickly gain popularity and become a leader in the VR gaming social track.

From the perspective of gameplay alone, both Squid Game and Blood Valley are survival adventure games that focus on social scenarios. They both have gameplay and hardware support, but Squid Game also has strong IP attributes.

You know, the show quickly became popular around the world once it was broadcast, and received 265 million views on the Internet, making it one of the most watched shows on Netflix in history. Sandbox VR brought the show of the same name into the offline experience, which should have been more attractive, but the actual sales situation is not optimistic.

This also reflects a market rule: it is better to create derivative products based on IP as early as possible, otherwise even the biggest IP will become unpopular over time. After all, no matter how popular Squidward Game is, it is already a "myth" from two years ago.

Netflix understands this principle. After "Squid Game" became a hit after it was broadcast that year, Netflix quickly launched the reality show "Squid Game: The Challenge", which detonated the traffic market again.

Many video bloggers and peripheral manufacturers are also taking advantage of the opportunity. YouTube blogger MrBeast attracted 200 million netizens to watch his remake of "Squidward Games", and his number of fans has soared. You must also remember how popular the candy biscuit box with a small needle on it was on Taobao after the series was broadcast.

Compared with such business acumen, Sandbox VR seems a bit slow. If it continues to follow up on "Squidward Fate", the effect can only be attributed to the long-tail cycle of Netflix's blockbuster effect.

Technology alone is not enough, the LBVR market is yet to be developed

In addition to the outdated IP, the "location-based virtual reality" or LBVR (Location-Based Virtual Reality) on which the Sandbox VR business model relies has not yet become completely popular and is still in the exploration stage of the business model.

The usage scenario of the newly released Meta Quest3 consumer-grade VR headset is slightly different. LBVR such as Sandbox VR requires users to go to a specific place in person to participate in the experience, which is also called large-space VR in China.

According to Mordor Intelligence, the LBVR market is expected to grow from $2.11 billion in 2023 to $8.73 billion in 2028, with a compound annual growth rate of 32.80%. Currently, the LBVR market is still in its infancy.

VBVR Venue

LBVR is highly dependent on the venue because in addition to VR technology, there is also motion capture technology, which is a technical blessing that home VR devices on the market do not have. Therefore, LBVR provides a more immersive and realistic experience, and the team experience in the venue also makes it more social and entertaining.

At present, Sandbox VR has launched 7 virtual games, mainly fighting and survival adventure, and the content ecology has yet to be explored. Although the popular "Blood Valley" has achieved $23 million in ticket revenue, as the market becomes saturated and users are aesthetically fatigued, LBVR social networking needs more new stimulation. If traffic does not flow into stores, the survival of LBVR companies will be in jeopardy.

Currently, the revenue of LBVR companies mainly depends on ticket sales and franchise fees. For Sandbox VR, ticket sales are its main source of income, and the other is franchise sales. Both sources of income are highly dependent on store traffic.

In order to attract players, Sandbox VR has been pursuing the ultimate texture of the game to enhance the player's sense of immersion. To this end, the company has invested a lot of money in independently developing technology, models and gameplay. Once virtual reality enters offline experience stores, it will need to invest a lot of money in site rental, and VR experience currently has a market in first- and second-tier cities. It is conceivable that the more stores are opened, the higher the rental cost will inevitably be.

In terms of revenue sources, some companies have begun to turn to complex business operations, integrating coffee, alcohol and other services to increase store revenue. The Park Playground provides coffee services in VR game experience stores; another LBVR company EVA provides steaks and craft cocktails in the store; VR ZONE DC simply accepts orders for corporate team-building activities and provides food and beverage packages.

Generally speaking, the duration of a single LBVR game is usually between 10 and 45 minutes, which is difficult to attract players to make a special trip, and players have to consider the next stop after the game. Therefore, complex formats can extend the experience time by more than one hour, and can also expand the single-function LBVR store into a social venue, turning it into an entertainment and leisure destination.

There is another market that LBVR companies are beginning to explore - immersive scripted entertainment, which are the escape room and script-killing stores that we commonly see.

According to data from the information service platform of the China Cultural and Entertainment Industry Association, during the May Day holiday in 2023, the consumption scale of the offline cultural and entertainment market nationwide reached 18.67 billion yuan, among which the operating income of immersive scripted entertainment venues increased by 450% year-on-year, and the number of consumers exceeded 4 million. In the first quarter of 2023 alone, the scale of the scripted entertainment market on Meituan increased by 47% month-on-month. Taking the escape room industry as an example, the number of active merchants and users on the platform showed a clear recovery trend, and sales increased by more than 50% month-on-month. According to the Guanyan report data, the domestic immersive scripted entertainment industry will reach a scale of nearly 44.81 billion yuan in 2025.

Script-killing and escape room games have begun to evolve from unpopular niche hobbies to the most influential giants in the offline entertainment market.

French game maker UbiSoft has developed three room escape games based on its famous game "Assassin's Creed". The games in this series have been launched in major domestic stores and cooperative outlets of the VR entertainment brand "VR+Park". In addition, Immersive World, a large-space mobile VR company founded in 2016, has also targeted this track, starting with room escape and providing offline social entertainment with virtual reality entertainment content based on VR technology.

But both escape rooms and VR experience centers face the problem of high rent. It is reported that the last real-life escape room of Immersive World took up 700 square meters, took a year to renovate, and invested $12 million. In the end, it was concluded that it was difficult to improve the user experience in this space. This is also the main reason why Immersive World started to develop "VR escape rooms" later - to use virtual reality as an online method to make up for the space that cannot be expanded offline.

Compared with real-life script-killing games and escape rooms, VR script-killing games and escape rooms require less space and manpower. The combination of the two greatly reduces operating costs in terms of rent, decoration, and manpower.

The LBVR market prospects are still very broad. According to data forecasts, this model is likely to become a new way for young people to entertain and socialize. The only problem is how to improve the input-output ratio, which is simply a problem of operating costs.

In the current environment of consumption downgrade, you have to make consumers feel that it is worthwhile to spend three or four hundred yuan to play a game for a maximum of 45 minutes.