What is Location-Based Entertainment – A Clear Explanation

Location-based entertainment (LBE) is a rapidly growing industry that combines elements of hospitality, leisure and retail. It is a consumer-facing category that offers unique experiences to visitors in physical destinations. These venues are designed to provide consumers with entertainment, education, and immersive experiences that they cannot get at home.

LBEs have become increasingly popular in recent years, thanks to advances in technology and the growing demand for experiential entertainment. The global LBE market is expected to reach $30.29 billion by 2028, registering an estimated CAGR of 34.4% from 2021 to 2028. This growth is driven by the increasing popularity of virtual reality (VR) technology, as well as the desire for new and exciting experiences among consumers.

LBEs can take many different forms, from theme parks and museums to escape rooms and immersive theatre experiences. They are designed to engage visitors in a variety of ways, from interactive exhibits and live performances to virtual reality and augmented reality experiences.

LBEs are also becoming increasingly popular as a way for companies to provide training and education to their employees, offering immersive and engaging experiences that are more effective than traditional classroom-style learning.

Fundamentals of Location Based Entertainment

Definition and Scope

Location-Based Entertainment (LBE) is a form of entertainment that is experienced at a particular location outside of one’s home. LBEs are physical destinations that consumers visit with the expectation of being entertained. They combine elements of hospitality, leisure, and retail, and offer immersive experiences that transport visitors to different worlds and time periods.

LBEs can range from family entertainment centres, multisensory digital experiences, theme parks, and immersive art installations. They can be indoors or outdoors, permanent or temporary, and can cater to a wide range of audiences, from children to adults.

The scope of LBEs is vast and constantly evolving. With the advancement of technology, LBEs are becoming more immersive, interactive, and personalised. Visitors can now experience virtual reality, augmented reality, and mixed reality, which blur the lines between the physical and digital worlds.

Historical Evolution

The concept of LBEs can be traced back to ancient times, where people gathered in public spaces for entertainment, such as amphitheatres, circuses, and festivals. In the 20th century, LBEs took the form of amusement parks, arcades, and cinemas.

However, it was not until the 21st century that LBEs truly evolved into a distinct industry category. The rise of the experience economy, where consumers value experiences over material possessions, has led to the growth of LBEs.

Today, LBEs are a booming industry, with a global market size projected to reach $30.29 billion by 2028. They are not only a source of entertainment but also a platform for brand experiences, socialisation, and education.

Technological Foundations

Hardware and Software

Location-based entertainment (LBE) relies on a combination of hardware and software to create immersive experiences for users. At its core, LBE requires specialised equipment, such as headsets, controllers, and sensors, that can track the user’s movements and translate them into virtual actions.

The quality of this equipment is crucial to the overall experience, as it directly affects the user’s sense of presence and immersion.

In addition to hardware, LBE also requires sophisticated software that can render high-quality graphics in real-time and respond to user inputs with minimal latency. This software must be able to create complex virtual environments that can be explored and interacted with, while also providing a seamless user experience.

To achieve this, LBE developers often use game engines, such as Unity and Unreal Engine, that are specifically designed for creating interactive experiences.

Virtual and Augmented Reality

One of the key technologies that underpins LBE is virtual reality (VR), which creates fully immersive environments that users can explore and interact with. VR headsets, such as the Oculus Quest and HTC Vive, allow users to experience these environments in 3D, with a wide field of view and high-resolution graphics.

This technology is particularly well-suited to gaming and entertainment applications, where users can be transported to new worlds and experience things that would be impossible in the real world.

Another key technology that is used in LBE is augmented reality (AR), which overlays virtual objects onto the real world. AR is often used in location-based entertainment to create interactive experiences that blend the physical and virtual worlds. For example, users might wear AR glasses that overlay virtual characters onto the real world, or use their smartphones to scan QR codes that trigger AR experiences.

Overall, the combination of hardware and software, along with the use of VR and AR technologies, is what makes location-based entertainment possible. By creating immersive experiences that transport users to new worlds and allow them to interact with virtual objects, LBE has the potential to revolutionise the entertainment industry and create new opportunities for businesses and consumers alike.

Types of Location Based Entertainment

There are various types of location-based entertainment (LBE) that consumers can enjoy. Here are some of the most popular ones:

Arcades and Gaming Centres

Arcades and gaming centres are one of the most common types of LBEs. They offer a wide range of arcade games, from classic pinball machines to modern virtual reality games. These venues are popular among people of all ages, especially teenagers and young adults. Some of the popular gaming centres include Dave and Buster’s and Round1.

Theme Parks and Attractions

Theme parks and attractions are another popular type of LBEs. They offer a wide range of rides, shows, and attractions that cater to people of all ages. Some of the popular theme parks include Disneyland, Universal Studios, and Six Flags. These venues are ideal for families and groups of friends who want to have a fun day out.

Escape Rooms and Interactive Theatres

Escape rooms and interactive theatres are a relatively new type of LBEs. They offer immersive experiences that challenge participants to solve puzzles and complete tasks within a set time limit. These venues are popular among people who enjoy solving mysteries and puzzles. Some of the popular escape rooms include The Escape Game and Escape Hunt.

Overall, LBEs offer a unique and entertaining experience that is different from traditional forms of entertainment. Whether you are looking for a fun day out with family and friends or a challenging puzzle-solving experience, there is an LBE for everyone.

Business Models

Revenue Streams

Location-based entertainment (LBE) venues can generate revenue through various means. The most common revenue streams for LBEs include ticket sales, merchandise sales, and food and beverage sales.

Some venues may also charge for experiences or attractions within the venue. For example, an arcade may charge per game or a virtual reality experience may require an additional fee.

In addition to these traditional revenue streams, LBEs can also generate revenue through partnerships with brands or sponsors. These partnerships can take the form of product placement or sponsorships of specific attractions or experiences within the venue.

LBEs can also leverage their physical space to host events such as concerts or corporate events, which can generate additional revenue.

Partnerships and Collaborations

Partnering with other companies or organisations can be a key component of an LBE’s business model. Collaborations can take many forms, from co-branded experiences to joint marketing campaigns. For example, an LBE may partner with a movie studio to create a themed attraction based on a popular film franchise.

Collaborations can also help LBEs expand their reach and attract new audiences. For example, an LBE may partner with a travel company to offer package deals that include admission to the venue. By partnering with other companies, LBEs can tap into new markets and leverage the strengths of their partners to create compelling experiences for their guests.

Overall, LBEs must be creative and flexible in their business models to ensure long-term success. By diversifying their revenue streams and forming strategic partnerships, LBEs can create sustainable businesses that offer unique and memorable experiences for their guests.

User Experience

Location-based entertainment (LBE) provides users with immersive and interactive experiences that are designed to transport them to another world. The user experience is a key factor in the success of LBE, and designers take great care to ensure that visitors are fully engaged and entertained throughout their visit.

Design Principles

Designers of LBE experiences follow a set of principles that are designed to enhance the user experience. These principles include:

  • Storytelling: LBE experiences are designed to tell a story, and designers use a variety of techniques to immerse visitors in the narrative. This may include the use of audio, video, and lighting effects, as well as physical props and sets.
  • Theming: LBE experiences are often themed around a particular concept or idea. This may be a popular movie franchise, a historical period, or a fictional world. Theming helps to create a cohesive experience and allows visitors to fully immerse themselves in the environment.
  • Interactivity: LBE experiences are highly interactive, and visitors are encouraged to take an active role in the story. This may include solving puzzles, completing challenges, or interacting with characters and props.

Immersion and Interactivity

Immersion and interactivity are two key elements of the LBE user experience. Visitors are fully immersed in the environment, and designers use a variety of techniques to create a sense of presence. This may include the use of virtual reality, augmented reality, or projection mapping.

Interactivity is also a key element of the LBE experience. Visitors are encouraged to take an active role in the story, and designers use a variety of techniques to create interactive elements. This may include the use of touchscreens, motion sensors, or other interactive devices.

Overall, the user experience is a key factor in the success of LBE. Designers take great care to ensure that visitors are fully engaged and entertained throughout their visit, and the use of immersive and interactive elements helps to create a memorable and enjoyable experience for all.

Market Trends and Analysis

Consumer Demographics

Location-based entertainment (LBE) is a rapidly growing industry that caters to a diverse group of consumers. According to a report by Grand View Research, the LBE market is expected to expand at a compound annual growth rate (CAGR) of 28.8% from 2023 to 2030. This growth can be credited to an increase in consumer inclination towards amusement parks, arcade studios, 4D films, etc. as a part of leisure.

The LBE industry is driven by rising demand from the end-user sectors of theme parks, arcade studios, and movie theaters due to improved content with technology adoption. According to a report by Mordor Intelligence, the global LBE market is expected to register a CAGR of 35.16% over the forecast period (2022-2027).

Industry Growth and Projections

The LBE market is segmented by technology, offering, venue, and region. Virtual Reality (VR), Augmented Reality (AR), and Projection Mapping are the main technologies used in the LBE industry. The market is also divided into hardware, software, and services offerings, while amusement parks, theme parks, and arcades are the primary venues for LBE.

According to a report by MarketsandMarkets, the global LBE market size is projected to grow from USD 3.8 billion in 2021 to USD 13.4 billion by 2028, at a CAGR of 19.6%. The Asia Pacific region is expected to dominate the market during the forecast period due to the increasing number of theme parks and arcades in countries such as China, Japan, and South Korea.

Overall, the LBE market is expected to see significant growth in the coming years, driven by advances in technology and increasing consumer demand for immersive entertainment experiences.

Future Outlook

Innovations and Advancements

The future of location-based entertainment looks promising with the advancements in technology. The use of virtual and augmented reality, along with artificial intelligence, is expected to revolutionise the industry. According to Grand View Research, the integration of these technologies is expected to enhance the overall experience of visitors, making it more interactive and immersive.

In addition, the use of wearable technology such as smart glasses and haptic suits is expected to enhance the sensory experience of visitors. The use of these devices will allow visitors to feel the environment they are in and interact with it in a more realistic way. This will add a new dimension to the entertainment experience and attract more visitors.

Potential Market Shifts

The location-based entertainment market is expected to witness significant growth in the coming years. The market is expected to more than double from its current valuation of $3.29 billion to $14.3 billion by 2028, with a compound annual growth rate (CAGR) of 28.5% during the forecast period, according to GlobeNewswire.

The potential market shifts include a shift towards more family-oriented experiences, as well as an increase in the number of location-based entertainment venues in emerging markets. The growth of the middle class in emerging markets is expected to drive demand for location-based entertainment, as people seek new and exciting experiences.

Moreover, the focus on sustainability and eco-friendliness is expected to drive innovation in the industry. As people become more conscious of their impact on the environment, location-based entertainment venues will need to adapt to meet these changing demands. This will include the use of renewable energy sources, as well as the use of recycled materials in the construction of venues.

Overall, the future of location-based entertainment looks promising, with the integration of new technologies and a shift towards more sustainable and family-oriented experiences.

Picture of Phil


I’m the resident head of comms and partnerships here at Draw & Code. I work on strategy, sales, marketing and other vital areas at a studio that was founded on a dream and has spent the intervening decade trying to make that dream come true. I believe that immersive and interactive technologies are impacting on our lives and being in the epicentre of this industry makes every day a thrill.

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