Location Based Entertainment Market Size, Share & Industry Analysis, By Technology (Projection Mapping and Cloud Merged Reality), By Component (Hardware and Software), By Venue (Arcades and Gaming Centers, Theme Parks, Escape Rooms and Interactive Theatres, and Others), and Regional Forecast, 2024-2032

The global location based entertainment market size was valued at USD 4.34 billion in 2023. The market is projected to grow from USD 5.17 billion in 2024 to USD 23.34 billion by 2032, exhibiting a CAGR of 20.7% during the forecast period.

Location Based Entertainment (LBE) encompasses entertainment experience tied to specifically physical location, including gaming centers, arcades, theme parks, escape rooms, and others. The market is gaining traction due to increasing demand for engaging, immersive, and interactive experiences among young generations. As per industry experts, by 2025, it is expected that 70% of consumers will experience gamified experience. The adoption of AR/VR for entertainment purposes is also driving the market growth. According to WorldMetrics, globally, there are around 4,000 location-based VR centers. In addition, the demand for mixed-reality attractions will increase and it is expected that these attractions will grow by around 18% per year through 2026.

Theme parks, gaming centers, and other location-enabled entertainment faced several challenges during the COVID-19 pandemic, and due to this, the market was negatively impacted in 2020. To overcome the loss, the location-enabled entertainment providers created an in-home consumer experience that provided short-term revenue streams during the lockdown. For instance, virtual reality and online “tours” delivered on-brand experiences to delight consumers in isolation. To survive after the pandemic, the location based entertainment providers invested in touchless technology and physical distance enablers for maximizing safety and improving the guest experience over the long term.

IMPACT OF GENERATIVE AI

Adoption of Generative AI tools for Creating Content is expected to Boost Market Growth

Artificial intelligence offers opportunities for the entertainment industry and the advent of generative AI is revolutionizing content creation. Generative AI plays a significant role in accelerating content creation, reducing cost, increasing efficiency, and enhancing creativity, personalization, and innovation. The advancement in artificial intelligence has made augmented reality much more accessible. While Artificial Intelligence (AI) focuses on human-like intelligence that can analyze data, make predictions, resolve problems, and provide solutions, Augmented Reality (AR) augments real-world objects on a virtual platform, such as a headset and mobile device, for creating an immersive environment. Illumix, an augmented reality technology and media company, has developed augmented reality technology around location-enabled entertainment and experiences.

Illumix’s enterprise AR platform is becoming the standard for major venues, including music festivals, sports stadiums, theme parks, resorts, and others. The company has introduced Illumix's proprietary Spatial Positioning System, which facilitates digital content to accurately combine and merge with the real-world environment both outdoors and indoors in a privacy-compliant manner. The company is using generative AI to reduce the cost and time required to build a 3D experience and supercharge the entire AR space by making 3D animation, asset production, and experience development faster and cheaper.

Location Based Entertainment Market Trends

Growing Popularity of Extended Reality (XR) Technology to Drive Market Growth

The entertainment industry is leading in the adoption of XR technologies, using VR for gaming and immersive experiences, incorporating AR into location-enabled entertainment and exploring the potential of XR for live events and performance. VR in gaming has created new opportunities for immersive storytelling and interactive experiences. At the same time, AR is used to integrate digital elements into physical environments, improving the entertainment value of various attractions and experiences. The potential of XR in live performances and events has also opened up new possibilities for creative expression and audience engagement. The impact of XR on the future of entertainment is vast, offering new avenues for creativity, storytelling, and engagement.

XR technology enables users to explore virtual environments, interact with digital objects, and engage in simulated experiences that blur the line between reality and fiction. From virtual gaming experiences to interactive storytelling and educational simulations, XR technology offers limitless possibilities for entertainment venues to create memorable and engaging experiences for their visitors. The appeal of XR technology extends beyond traditional entertainment offerings, with applications across various industries, such as retail, healthcare, education, and tourism. For example, retailers are leveraging Augmented Reality (AR) technology to create immersive shopping experiences, while healthcare providers are using VR simulations for medical training and therapy. This versatility of XR technology opens up new avenues for location-enabled entertainment venues to diversify their offerings and attract a broader audience.

Therefore, the above factors are surging the location based entertainment market share.

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Location Based Entertainment Market Growth Factors

Increasing Consumer Spending On Entertainment to Bolster Market Growth

Nowadays, consumers seek various sources of entertainment and are increasingly spending for it. As the popularity of AR/VR is increasing, consumers are spending on playing games at VR parks. As per industry experts, consumer spending on virtual reality content reached USD 844 million in 2023. Apart from this, consumers are availing subscriptions to entertainment parks that provide them with an immersive experience. Players in the market are creating content that is suitable for kids and adults and are focusing on delivering high-quality content to their users through escape rooms, gaming centers, theme parks, and other forms of location based entertainment.

Players are entering partnerships and collaborations to expand their reach and attract new audiences. Collaborations can be done in various ways, from co-branded experiences to joint marketing campaigns. For instance, a location based entertainment may enter a partnership with a movie studio to create a themed attraction based on a popular film franchise. Due to diversified content categories, consumers are bound to try all of them, spending more on entertainment for an immersive experience.

Therefore, increasing consumer spending is driving the location based entertainment market growth.

RESTRAINING FACTORS

High Capital Investment May Hamper Market Growth

Many of the location based entertainment service providers face challenges to stay updated with the rapidly changing technology landscape. As technology is a vital component of the LBE experience, new developments in technology make existing equipment and technology outdated. In addition, to stay competitive in the market, the LBE requires significant capital investment and this can be challenging for businesses that are small and have limited budgets. In addition, maintenance of equipment and updating technology are essential for enhancing customer experience, but it can be expensive for some of the LBE’s and LBE’s that fail to do this may face damage to the business’s reputation. Therefore, high capital investment is expected to hamper the market growth.

Location Based Entertainment Market Segmentation Analysis

By Technology Analysis

Positive Impact of the Demand for Creating Complex 3D Environments on Projection Mapping to Spur Segment Growth

By technology, the market is segregated into projection mapping and cloud merged reality.

The projection mapping segment led the market in 2023, as the demand for creating complex 3D virtual environments and visualizations to offer visitors a natural experience has impacted projection mapping positively. Using projection mapping techniques guests in LBE can experience without restrictions by head-mounted/hand held device projection. When combined with real-time tracking, projection mapping detects the movement and position of guests, even at high speed and then projects content around them.

The Cloud Merged Reality (CMR) segment is estimated to register the highest CAGR during the forecast period due to the rising adoption of AR/VR for entertainment purposes, as the technology provides users with an immersive experience. As CMR has the benefit of saving time, it is widely incorporated by several big technology-based businesses. In addition, the technology offers better usability and fewer data loss, boosting its adoption by many companies in the gaming and entertainment industries.

By Component Analysis

Popularity of VR Headsets to Propel Hardware Segment Growth

By component, the market is bifurcated into hardware and software.

The hardware segment dominated the market in 2023, as the demand for the hardware profoundly increased after the introduction of VR headsets. At its core, LBE requires specialized equipment, such as headsets, controllers, and sensors that can track the user’s movements and translate them into virtual actions.

The software segment is expected to showcase the highest CAGR during the forecast period as software helps advance the LBE systems and helps support the creation of innovative and immersive content so that end customers do not have to visit end-use locations. The surging demand for high-quality immersive content such as games, advertisements, videos, programs, movies, and others with various applications boosts the segmental growth.

By Venue Analysis

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Arcades and Gaming Centers Segment Led Driven by Heavy Investments by Major Companies on Offering Immersive Experience

By venue, the market is divided into arcades and gaming centers, theme parks, escape rooms and interactive theatres, and others.

The arcades and gaming centers segment dominated the market in 2023 as the key players in the market are investing heavily to offer immersive experiences to their consumers in arcades and gaming centers since the VR headsets used at home do not provide high-fidelity immersive content.

The theme parks segment is slated to expand with the highest CAGR during the forecast period owing to the rising popularity of the concept of theme-centric experience and increasing adoption of AR/VR-based immersive technology in theme parks for attracting potential customers’ attention. These theme parks can provide consumers with memorable real-life experiences.

REGIONAL INSIGHTS

The market is analyzed across the regions, including South America, North America, Europe, Asia Pacific, and the Middle East & Africa. These regions are further categorized into major nations.

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North America generated maximum revenue in 2023, owing to the increasing adoption of advanced technologies in the entertainment industry and the growing number of theme parks. As per GoUSA.in, in the U.S., there are around 400 amusement parks. As per IGI Global, around 70% of Americans believe that attending a live event or experience makes them feel more connected to other people, to their community, and to the world at large, so around 78% choose to spend their money on live experiences. Therefore, increasing consumer spending on live experience is driving the market growth in the region.

Asia Pacific is estimated to grow with the highest CAGR during the forecast period, owing to changing consumer preference for entertainment. In addition, the region has the presence of various VR/AR hardware and software providers, which is one of the reasons for market growth. Players in the region are expanding their global reach by opening location based entertainment centers across the globe. For instance, in December 2019, Skonec Entertainment, a South Korea-based location based entertainment company, opened a VR Square in Los Angeles to expand its presence in North America region. In addition, in January 2021, a Chinese film and TV studio opened a movie-inspired adventure park in China. Such development strategies by the companies are propelling the market growth in the region.

Europe is estimated to witness significant growth in the coming years, owing to rapid urbanization, an increase in international tourism, and a rise in disposable income.

South America and the Middle East & Africa are experiencing steady growth as adoption of technologies, including AR/VR, is increasing in the entertainment industry to attract potential customers.

KEY INDUSTRY PLAYERS

Major Players Focus on Developing Advanced Products to Strengthen Their Market Positions

Key players in the location based entertainment market are adopting advanced technologies, including AR/VR, in their product portfolio. With this, companies aim to transform their services and better serve their customers. They also focus on enhancing their existing product portfolio to deliver flexible solutions with unique attributes. Furthermore, these organizations proactively adopt collaboration, mergers and acquisitions, and partnerships to bolster their product offerings.

List of Top Location Based Entertainment Companies:

Hardware/Software Providers

• Meta (U.S.)


• HTC Vive Tech Corporation (Taiwan)


• Samsung Electronics (South Korea)


• Sony Interactive Entertainment Limited (U.S.)


• Wikitude (Austria)

Location based Entertainment Providers

• Neurogaming (Netherlands)


• Exit Reality (U.S.)


• Spaces Inc. (U.S.)


• Void, LLC. (U.S.)


• Hologate (Germany)

KEY INDUSTRY DEVELOPMENTS:

• November 2023: Sony Pictures announced the opening of Wonderverse, an immersive entertainment destination in the Chicago metropolitan area. The attraction Wonderverse is inspired by Sony TV shows, films, and video games, including Zombieland, 21 Jump Street, Bad Boys, Ghostbusters, and others. 


• April 2023: Netflix disclosed that it is starting a location based entertainment experience at KidZania in Japan. The theme of this LBE will be based on the upcoming animated series of Netflix, named Rilakkuma’s Theme Park Adventure.  


• April 2023: Samsung Electronics entered a partnership with Google and Qualcomm to develop an ecosystem for extended reality.


• March 2023: Merlin Entertainments, a global location based entertainment company, announced the opening of a second Peppa Pig theme Park in North Texas in 2024.  


• January 2023: Walt Disney and Apple, Inc. entered a collaboration to develop a VR content platform for Apple’s headsets. Apple, Inc., has developed its headset in collaboration with Sony Group Corporation.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as prominent companies, product types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights the competitive landscape. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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