Location-based Entertainment Market Research Report and Outlook by 2028

The location-based entertainment (LBE) sector is projected to expand from US$ 1,444.92 million in 2022 to US$ 2,918.91 million by 2028, reflecting a compound annual growth rate (CAGR) of 12.4% during this period.

The expected growth of the location-based entertainment market in the coming years is largely driven by advancements in 360-degree virtual reality (VR) technology. This innovative technology allows users to experience content in a fully immersive 360-degree environment, paving the way for VR games that offer engaging and exhilarating experiences. As a result, key players in the LBE market are collaborating with tech firms to enhance LBE technologies. For instance, in September 2019, TacHammer, StrikerVR, Inc., and Nanoport Technology Inc. joined forces to develop Linear Magnetic Ram (LMR) haptic technology. This partnership led to the launch of the Arena Infinity LITE VR peripheral by Sticker VR, aimed at providing authentic tactile sensations for LBE and VR experiences.

The VR gaming industry has witnessed substantial growth, particularly in the hardware segment, which includes VR gaming headsets and related products. This surge can be attributed to both established companies like Oculus VR, Sony, Samsung, and Google, as well as emerging startups entering the market. As competition intensifies, manufacturers are likely to differentiate themselves through design and pricing strategies to attract gamers. With the increasing popularity of 360-degree content and a growing user base, the costs associated with VR hardware components, such as joysticks and headsets, are anticipated to decline. The rising adoption of location-based VR technology, which is becoming a favored gaming platform, is also expected to enhance the appeal of 360-degree video in the future. Collectively, these factors are projected to propel the growth of the global location-based entertainment market in the upcoming years.

The Asia Pacific region is anticipated to experience the highest CAGR in the location-based entertainment market throughout the forecast period. This growth is primarily due to the presence of several emerging economies, including China, India, Japan, Australia, and South Korea, which boast numerous amusement and theme parks, creating promising opportunities for LBE providers. A notable example is Netflix's launch of its inaugural theme park pavilion at KidZania in Fukuoka in July 2022, highlighting the increasing demand for LBE in the Asia Pacific region and its potential to drive market growth.

Effects of the COVID-19 Pandemic on the Growth of the Asia Pacific Location-based Entertainment Market

Governments in the Asia Pacific region implemented various strategies to mitigate the effects of the COVID-19 pandemic, including lockdowns. Consequently, there was a surge in the use of digital entertainment platforms among consumers and businesses during the first half of 2020, as many establishments temporarily closed. The entertainment industry, particularly the location-based entertainment sector, faced significant challenges, resulting in job losses. However, as lockdown measures were eased, the LBE market began to recover. In response to the pandemic, amusement parks, arcade studios, and film studios in the region have started adopting touchless technologies, physical distancing measures, and temperature checks to ensure consumer safety while enhancing their LBE offerings.

As businesses resume operations in the region, the adoption of LBE is expected to increase, coinciding with the revival of the media and entertainment industry. This trend will gradually benefit the businesses of players in the location-based entertainment market.

The Asia Pacific location-based entertainment market is segmented into Australia, China, India, Japan, South Korea, and the Rest of Asia Pacific. Countries in this region are known for their early adoption of technological innovations, making it a hub for numerous LBE providers, including Panasonic Connect, SKonec Entertainment, and Sony Interactive Entertainment LLC.

For instance, SKonec Entertainment, a South Korean LBE company, expanded its footprint by opening a VR Square in Los Angeles in December 2019. In January 2021, Enlight Media, a Chinese film and television studio, commenced the construction of a movie-themed adventure park in China named "Enlight Epicenter," with Legacy Entertainment responsible for its core design. Enlight plans to invest approximately US$2.5 billion in this LBE project. Additionally, in November 2019, South Korean retail giant Shinsegae announced plans to construct a theme park valued at US$3.8 billion, with construction set to begin in 2021 and partial operations expected by 2026, achieving full operational status by 2031.

In 2021, China held the largest share of the location-based entertainment market, driven by its rapid technological advancements and construction capabilities. Enlight Media is currently developing a movie-themed park in Yangzhou, designed by Hollywood's Legacy Entertainment, with an investment of around US$2.5 billion. China also features various tourist attractions, including VR Star and Lionel Messi-themed parks, which are likely to create lucrative opportunities for VR headsets and haptic suits, further expanding the LBE landscape in the country during the forecast period.

India is projected to experience the fastest CAGR, as it is one of the developing nations in the region focusing on infrastructure development through technology. With the rise of technological innovations, companies are increasingly integrating advanced technologies like AR and VR into their operations. For example, Seasons Mall in Pune has introduced a wireless virtual reality gaming lounge, marking the country's first wireless VR gaming zone. Such advancements are expected to significantly contribute to the growth of the location-based entertainment market in India.

Prominent players in the location-based entertainment market include BidOn Games Studio, Dimension, HQSoftware, IMAX CORPORATION, Neurogaming LTD, TESLASUIT, SpringboardVR, Samsung Electronics Co., Ltd., Vicon Motion Systems Ltd., and VRstudios Inc. The market is characterized by fragmentation, with numerous players focusing on regional demands.

The analysis of the location-based entertainment market is based on both primary and secondary research. Secondary research involved comprehensive data collection from various internal and external sources to gather qualitative and quantitative insights related to the market. This process also provided an overview and forecast of market growth across all segments. Additionally, several primary interviews were conducted with industry participants and experts to validate the data and gain further analytical insights. Interviewees included industry experts such as VPs, business development managers, market intelligence managers, national sales managers, and external consultants specializing in the location-based entertainment market.