Why Location-based VR is in the “Goldilocks Zone”
Last week Meta came out with guidance for experience developers on the Quest, advising them to design for sessions that…
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500+ free-roam venues with happy operators! –
500+ free-roam venues with happy operators! –
A new research report just dropped called Gen Alpha Saves the Box Office from a market research company called NRG (nrgmr.com). The subtitle is How America’s Youngest Moviegoers Are Shaping the Future of the Theatrical Experience.
I just read the report. It’s really interesting, and you should definitely download it and read it for yourself. I have 13 insights that I’m going to talk about. I’d love to know which ones resonate with you.
The one with the biggest societal impact is that Gen Alpha craves connection.
These kids grew up during, the pandemic. Their early formative years were shaped by isolation. So it’s not a surprise that they crave being in real life with friends and family, and in big groups. They value togetherness. They appreciate the feeling of being part of something bigger than themselves.
Games are the third place for Gen Alpha. The “third place” is not home (the first place) or school/work (the second place). It’s a community-driven spot where people gather.
About a decade ago I read that Fortnite was the new third place for Gen Z. More recently, I read that Gorilla Tag is the third place for Gen Alpha. Gorilla Tag and Among Us VR are really popular free-to-play VR games where kids hang out. So games are definitely the third place where Gen Alpha gathers, BUT
Despite that, 2X more kids, (we’ll use “kids” and “Gen Alpha” interchangeably, since that’s how the report refers to them) two times more kids want in real-life experiences with friends than prefer meeting online. That’s a big snap back to a desire for in-person experiences.
49% of Gen Alpha want more time in group activities with friends than they’re currently getting. Not only do twice as many prefer IRL experiences, but they also want more group time than they currently have.
50% of Gen Alpha prefer playing video games in person with friends as opposed to online with friends. That’s especially interesting if you’re in the arcade business.
The report also calls out a big misperception. People say youth have short attention spans, that they only want two-minute TikToks, and they can’t sit through long movies.
The research doesn’t support that. The preferred movie length for Gen Alpha is two hours and seven minutes. That’s only about seven minutes shorter than millennials. Seven minutes could be whether you sit through the post-credit scene or not. It doesn’t seem substantial to me.
The key takeaway: they’re looking for two-hour experiences. That’s how long it takes to marshal a group of friends, go out, and have a good time. They’re not going to do that for a 30-minute experience.
So the question for our industry is: how do we put together longer experiences that offset the friction of gathering a group, planning, and going out? There are technology tools we could use to help with that — group scheduling, group sales, making it easier for people to buy or book experiences together. Increased dwell time increases revenue per customer, and increases your ROAS.
(Oh, btw, sign up for the Marketing Masterclass series on Viral Ads, and watch the last one on Personas to see how this all fits together.)
Number seven: 68% of Gen Alpha said the primary reason to go to a movie is to spend time with friends and family. And 55% said they prefer going to movies with large groups of friends. That’s a significant uptick versus previous generations. Gen X, the oldest group surveyed, came in around 30%. But for Gen Alpha, the primary reason is friends and family. Again, this underscores number one: they’re craving connection.
They want to make movies a community event. This is why movies tied to fandoms like Minecraft or Wicked are overperforming. Fandom is community. Going to those movies is about celebrating with that community. That’s why kids want to see films opening weekend, because that’s when the community gathers, when there’s a critical mass of people.
It’s also why movies fall off massively in week two and three. If you don’t see it opening weekend, it’s no longer an event. That creates challenges for movie theaters as a business model, but also opportunities for VR that we’ll get into. (See #10)
Gen Alpha wants multi-sensory experiences. They want sound, motion, smells. It reminds me of a webinar I did recently with VR Cave operators in Austria and Germany. They offer free hot buttered popcorn in their lobbies to evoke that movie theater feeling. It’s worth a watch.
Those little touches matter. Think of walking into a Subway sandwich shop and smelling the fresh bread. Our industry doesn’t do enough to engage all the senses. Go buy a popcorn maker.
New releases can become events. Gen Alpha wants movies to feel like events. Studios can do that with $100M marketing budgets. In VR, we can’t. But that doesn’t mean operators can’t create events around new titles.
For example, when Smurfs launched on free-roam platforms, most operators probably just added it quietly. But that could have been turned into an event, especially with the movie launching this past summer (even if it was a box office dud – they spent $50 million marketing it.)
We get another shot at this this fall with the new Terminator title coming from Hero Zone. Terminator is a multi-generational franchise. It connects parents and kids. That’s powerful. And with AI dominating the zeitgeist, you can tap into communities of interest to play and then have discussion groups, hackathons, creator classes, or any number of activities around AI.
Gen Alpha responds to cross-generational connectors. The report highlights how Super Mario Bros. hit $1.4 billion at the box office because parents passed nostalgia down to kids. Spider-Man: No Way Home worked by embracing the multiverse and pulling characters across generations.
The same opportunity exists in VR. The original Terminator movie hit the big screen in 1984, over 40 years ago. That’s almost two generations since Sarah Connor showed us all what a bad-ass heroine looks like in the apocalypse. And Arnold’s butt.
The upcoming Terminator release will be in over 500 arcades worldwide. There’s a real opportunity to create community events around that launch — getting people out together, connecting generations, and sparking meaningful conversations.
The last insight: 54% of Gen Alpha said they’d be interested in “3D or VR experiences” in theaters. Why did NRG lump those together? No idea. 3D and VR are not the same. 3D has been in theaters for decades. VR hasn’t. I’d love to see those numbers separated. Even so, 54% interest is huge. On top of that, 41% said they’d go to theaters for hybrid experiences with a video game element before or after.
This aligns with the new long-form VR storytelling content being developed by creators like Felix & Paul, Excurio, and Univrse. If 54% want VR/3D and 41% want hybrid, that’s a mandate. Gen Alpha wants interactive, immersive, social experiences. VR tech is the best way to deliver.
You can distill this report down to three words: interactive, immersive, social.
Gen Alpha craves social connection. They demand immersion. They’re attracted to interactivity. VR checks all three boxes.
How do we, as an industry, stop selling 30-minute rentals or short game sessions and instead create culturally relevant events? That’s not on developers — though they can build tools. It’s on operators to figure out how to deliver it. It’s a marketing challenge.
LEXRA is here to help. Let’s do this together.
