Imax has called time on its location-based virtual reality (VR) pilot first launched in 2016. The future of the initiative was first plunged into doubt earlier in 2018 as the company began shuttering two non-profitable sites (Shanghai and New York in June 2018), promptly followed by other closures, such as Manchester, its only European site in November 2018.
The official notification that the company will shut all remaining VR ventures and write-off other VR content related investments came from a regulatory filing in December 2018. All in, IMAX launched a total of seven VR centres in LA, New York, Toronto, Bangkok, Shanghai and Manchester, UK. It had planned to open as many as ten VR experience hubs by year-end before plans were curtailed including, longer term, expansion to non-multiplex locations.
Imax’s assertive push into the location-based VR market has come to an end. The company had been looking to leverage its position through a range of strategic investments across the VR value chain including the development of a cinema grade VR camera in conjunction with Google, which in turn was also shelved.
Imax will therefore be calling time on a range of partnerships including hardware (with Acer, Google, HTC and Starbreeze) and content (Skydance, Ubisoft). The $50m investment fund (with Acer) for content will also likely wind down, with just $4m and one title (Justice League) drawn down, signifying wider issues with the VR pipeline from the outset.
The departure of Imax from the location-based cinema VR market is significant and highlights potential shortcomings in terms of a pipeline for quality VR content, technology and ultimately the premium nature of the end-user experience presented in the cinema environment and potentially other standalone location-based VR concepts.
Imax's move should also not been viewed in isolation with other pioneer location-based VR ventures closed down including the first permanent VR cinema in Amsterdam opened in 2016 and other firms such as France’s MK2 remaining with one initial VR hub (although the company launched its own VR pod to sell globally). The shift in Imax’s VR fortunes could also be more widely linked back to other strategic U-turn’s in the field such as Facebook’s Oculus VR Studio and Google’s Jump Platform, the latter of which turned to focus on Augmented Reality (AR) such as its work on the ARCore SDK.
Despite the withdrawal of Imax (and others) from the fledgling location-based VR market, there are others just getting started such as Dreamscape in LA. Dreamscape Immersive, a start-up in which IMAX itself has invested (among others including AMC), started with pop up locations eventually launching its first permanent venture in December 2018. The VR experience enables participants to freely roam with their own VR backpack in stark contrast to the fixed pods in traditional location-based VR.
Therefore, while there is still momentum behind location-based VR, this seem to be based more around experiential formats and exclusive content. The collapse of certain key location-based VR hubs in cinemas brings to the fore the need to differentiate over the standard consumer VR experience plus the task of securing high-grade VR content.
Another potential drawback, is the removal of the social element of cinemagoing as the VR experience becomes all immersive and going to the movies is more about social dynamics. Therefore, while cinema VR and potentially other location-based VR formats, need to present a premium experience, a social interactive element is also required that is not being provided in existing and static VR pod set-ups. Other formats such as Augmented and Mixed Reality could potentially have a greater synergy with cinema based locations. For example, in a more experiential move, Danish company Makropol is planning to open the first XR Cinema in 2019. XR is a term used to encompass all technologies such as mixed, virtual and augmented reality.
Ultimately, investment and operational costs were one of the main stumbling blocks for Imax coupled with significant setbacks in building a cinema grade VR pipeline. The company was also positioning VR to be an extension of its branded experience. However, active VR and theme park based experiences, like Dreamscape, are currently attracting more attention because they are clearly differentiated and offer more of an immersive experience to justify the pricing.