By Mark Seavy  

Virtual reality (VR) was once expected to be the next technology breakthrough, bringing with it significant new business for the global brand licensing industry. 

But steep costs for VR glasses and complicated operations have slowed the once high-flying business, largely limiting it to commercial (rather than consumer) applications. 

Triotech, for example, previously developed a licensed Assassin’s Creed VR maze experience. It has since pulled back on the effort, shifting instead to focus on dark rides that will be installed in eight licensed Discovery Centers that Saudi Entertainment Ventures will deploy in some of the 21 entertainment destinations it is building across Saudi Arabia. Triotech has limited use of VR to its non-licensed Storm simulator ride. 

And AREA15’s massive immersive entertainment center in Las Vegas, which once championed VR, is now limiting use of the technology within its facility and focusing instead on other offerings like escape rooms, said Mark Casper, VP for Business Development at AREA15. AREA15 does, however, incorporate VR technology into its escape rooms under a license with Netflix for Army of the Dead.  

“It is challenging within VR to have a personalized experience,” Casper said. “People are already doing that at home. Too often these experiences are marketed as a chance to try VR. But the key is that technology cannot be your story. An experience is the reason people are coming to your facility.”  

As a sign of the decline in the consumer VR business – which includes products from Apple, Google, Meta, HTC and others – shipment of VR glasses declines 67% in Q1 this year compared with Q1 2023, according to research firm IDC. Sales of VR glasses in healthcare, however, are forecast to increase 20% annually through 2033 to hit $19.6 billion, up from $3.7 billion this year according to Division Market Research.   The North American healthcare market is leading the sector’s growth, accounting for 51.1% of revenue in 2024. 

“For a technology to be successful, it must [provide] something that consumers need or at least want,” said Guy Boulet, Manager of Software Applications Development at the Canada School of Public Service, in an editorial. “Right now, there are few, if any, needs VR can fill that cannot be filled by other technologies. The only value VR adds to the content it displays is immersion, and we know immersion can be achieved through much simpler ways; people get immersed in movies or video game action without VR headsets.” 

And while there were fewer exhibitors featuring VR in their booths than in past years at the recent International Association of Amusement Parks and Attractions (IAAPA) Expo in Orlando, FL, some companies have carved out a business by focusing on the technology. 

VR developer Hologate has 500 systems installed globally and featured HTC’s new HTC Pro VR headset at its IAAPA booth to showcase what it called extended reality (XR) games, including those featuring brands like Ghostbusters and Angry Birds 2 as well as the zombie-themed Zombyte, an internally developed title that is the company’s top-seller. 

“VR has gotten more and more popular during the past few years and because people are used to it now, we have seen our systems globally have been good in terms of player numbers,” said Fabian Tögel, Sales Manager at Hologate. 

Where VR is headed next and whether it will be surpassed by glasses-free augmented reality (AR)—Niantic Games’ Pokémon Go! being the best example—will depend on VR’s ability to deliver a storytelling rather than a technology experience, licensing executives said.  

“Technology is one of many tools to get [eyes on] your content, with content being the key word,” said Natalia Bakhlina, Partner at the consulting firm Leisure Development Partners. “Without a storyline or something meaningful, technology doesn’t matter. The more people smell or touch something, the more immersed they become. We lost sight of that. If it is just digital technology, it is not going to make it.”