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Immotion Group sets itself for virtual reality land grab

“We want to move very quickly. We see it is a landgrab opportunity"
VR booth
At a heavy use site, payback can be within 60-90 days

Martin Higginson brought his third company to AIM when Immotion PLC (LON:IMMO) joined the junior market after raising £5.75mln.

Previous ventures Monstermob and Netplay TV were both eventually taken over.

WATCH: Immotion Group  to use AIM listing to dominate 'out of home' VR market

That might eventually be Immotion’s fate but for now Higginson is focused on maximising its potential in the rapidly growing virtual reality space.

“Looking at the [virtual reality] market about two years ago we quickly came to the conclusion to have a truly immersive experience you need motion.

“We found a motion platform and a great CGI studio and brought the whole thing together to deliver what you see today, which we believe is just a knockout immersive experience.”

Edutainment and entertainment

Edutainment – education entertainment combined – is one end of the spectrum.

York Museum used Immotion for its Jurassic exhibition and Sir David Attenborough opened the event feeding a dinosaur in virtual reality.

A VR monorail journey through a dinosaur Park was another feature.

On a similar theme, in pure entertainment Immotion does a great line in rollercoasters, says Higginson.

One Christmas ride involves helping Santa's elves deliver presents around the world in a VR experience, while there are retro ghost trains and deep sea diving for those a little older.

Currently, Immotion has installed 130 of its immersive VR pods (see picture) but analysts predict an estate of 1,000 by the end of 2019.

Recurring revenue model

Higginson is confident about the revenue possibilities.

“It is a recurring revenue model. Because we charge for every experience or every play, then we make money every time.

“The more machines we have out there, or the more seats rather, the more money we make.”

There are three basic types of channels to market, he explains.

The first is straight sales. A machine such as the cinema pod would retail at £15,000, which includes the price of 3,000 plays ignoring VAT and operational costs.

At a heavy footfall site and a retail price per visit of £5, site owners can get that back in about 60 to 90 days.

“So it is a very easy sell in terms of someone buying it, especially if they are looking for ancillary revenue for a site.”

Big partners

Secondly, Immotion has a concession arrangement with some big beasts of the entertainment world for its full system

Theme Park giant Merlin Entertainments has them installed at the Legoland discovery centre in Boston. Massachusetts and has just put one into the Lego outlet at Trafford Park in Manchester.

Finally, Immotion also operates its own outlets as a proof of concept for what it hopes eventually will become a franchise operation.

Stores are currently open in Bristol and Manchester Arndale with another two planned in California later this year, though other territories are also under consideration.

“What we are producing is really high-end CGI graphics mixed with emotion to deliver something that you just cannot get on high street today and you certainly can't get in the home.

Affordable to mass market

“We’ve just blended this together something that at a price point of £5 or US$5 or less becomes very affordable to the mass market.”

 “We want to move very quickly. We see it is a landgrab opportunity.

“If we can get on the front foot and grab as many of these customers as possible, there is real demand and a real rising tide for the whole out-of-home VR sector.”

Immotion shares rose to 12.38p on the first day of trading compared to a listing price of 10p.

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