The Immersive Revolution:
How Immersive Entertainment is Driving the new Experience Economy
by Peter Tullin – Co-Founder, REMIX Summits
What is driving the growth of immersive experiences?
A series of extended articles produced with support from the British Council
How big is the immersive industry?
Immersive entertainment sits within the broader ‘experience economy’, a term popularised by B. Joseph Pine II and James H. Gilmore in their book of the same name. The experience economy is predicted to be a $8.2 trillion industry by 2028.
The size of the immersive entertainment industry specifically was estimated at USD $61.8 billion in 2019 (No Proscenium). This figure is taken from a range of sectors including Theme Parks which is an industry (like many others) that has embraced immersive experiences. In 2019, for the first time in history, major themed attractions exceeded a collective half billion visits or nearly 7% of the world’s population. Some Theme Parks such as Puy du Fou which have focused exclusively on creating immersive experiences for audiences. The park has no rides and immerses visitors in different historical periods. It has twice been named the best theme park in the world and boasts 3 million annual visitors across its original location in France and a new site in Spain (with a third location announced for the US). Established players like Disney are also developing new ventures incorporating immersive elements such as the USD $2 billion Galaxy’s Edge based around the Star Wars franchise (which has opened in their California and Florida parks). Universal has also announced it is opening immersive-based attractions in Las Vegas and Texas. Other sectors such as retail and hospitality have also tapped into the immersive zeitgeist with Area15 perhaps the best-known example. This is an emporium of experiences in Las Vegas featuring a curated selection of leading players from across the US immersive entertainment sector (the site is anchored by immersive sensation Meow Wolf). The success of the first site has seen them announce a second 300,000 sqft location in Florida.
Excluding theme parks, the immersive entertainment industry alone is valued at $9.7 billion according to the 2020 Immersive Entertainment Industry Annual Report. Location-based experiences such as VR and mixed reality are both expected to grow significantly. In 2019, a total of 755 new immersive experiences and shows were catalogued by leading industry publication No Proscenium. In the United States alone, 2,350 Escape Rooms were catalogued in 2019.
Factors driving this growth
1. Advances in immersive technologies
We delve into this in more detail later including but the development of immersive experiences is being shaped by advancements in technology (combined with the increasing demand from audiences for more interactive and engaging content).
Immersive technologies (or technologies that can be utilised to deliver immersive experiences) include AR, MR and VR headsets, 3D displays, 3D audio, gesture recognition, spatial sensing, holograms, speech recognition, haptics, AI, drones, cameras and omnidirectional treadmills. Some of them such as VR might not have taken off in the home as expected (yet) but are central to immersive experiences such as those produced by Zero Latency which now has 76 venues in 27 countries and uses free-roam VR to power social gaming experiences.
Precedence Research estimates that the immersive technology market will grow to USD $134.18 billion by 2030. In 2021 it was USD $21.66 billion so this suggests ‘a compound annual growth rate (CAGR) of 22.46% from 2022 to 2030’. These technologies are being deployed in multiple industries not just immersive experiences and entertainment but they are offering new possibilities for how we tell stories and engage audiences.
Many of these technologies are closely connected to the concept of the Metaverse, popularised by movies such as Ready Player One and brought to the mainstream by the rebranding of Facebook to Meta. According to Fortune Business Insights, in 2021 the size of the worldwide Metaverse market was estimated at USD 63.83 billion. The market is anticipated to expand at a CAGR of 47.6% from 2022 to 2029, rising from USD $100.27 billion in 2022 to USD $1,527 billion.
The increasing affordability, accessibility and applications of these technologies is helping to drive their use in individual sectors such as entertainment, education and the games industries. As the tech continues to advance, there will be increasingly realistic and sophisticated immersive experiences that blur the lines between the virtual and physical worlds so that the stuff of science fiction will increasingly become a reality (both good and bad).
2. The growth of immersive entertainment has been accelerated by changes in the behaviour of audiences
The proliferation of new experiences is connected to changes in audiences particularly in relation to younger audience groups such as Gen Z and Millenials. For example, more than 3 in 4 millennials or 78% (25 – 36) would rather spend money on a desirable experience or event than buy a desirable object (Eventbrite).
77% of those surveyed also said some of their best memories were from an event or live experience they attended or participated in. 69% said that attending live events and experiences make them more connected to other people.
This is highly significant when you consider that by 2025, Millenials will constitute 75% of the workforce (Deloitte). Following on from this it is therefore not surprising that Macquarie have described “Millennials are the most powerful consumer cohort in history”. Millennials love the experience economy and immersive experience providers are well placed to benefit from their spend.
3. Immersive experiences are benefiting from social media platforms that have helped them go viral
The highly visual DNA of immersive experiences provides plenty of ‘Instagrammable moments’ that are helping drive awareness across multiple social media platforms. 85% of Gen Z learn about new products via social media (and 67% of millennials). Immersive experiences such as Immersive Van Gogh and teamLab are a delight for the senses and many are explicitly engineered with social media in mind to tap into the virtually free marketing that can result.
Perhaps the best know example however is the Museum of Ice Cream. Not a museum in any traditional sense, it has long been used as a case study for tapping into the ‘instagrammable moment’ as a key driver of its success. They also demonstrate how creative entrepreneurs leverage social media to grow rapidly with a fraction of the usual marketing spend. Their growth has been propelled by celebrities and influencers such as Beyonce who have shared their trips. An army of 500,000 on Instagram alone has been a critical factor in their expansion beyond their original pop-up site in New York, adding locations in Austin, Chicago, Singapore and Shanghai with 2 million plus visitors since opening in 2016. They have used this box office success to raise USD $40 million to fuel expansion at a valuation of USD $200 million.
Gen Z also listens to each other (and influencers) rather than messaging from faceless brands. This means that if you can develop something that connects with them it has the potential to grow quickly. 65% state that they make buying decisions based on social media influencers and online discourse. Connected to this, many visitors also share their experiences with their communities via online user reviews across a variety of platforms from Facebook to TripAdvisor. These are also critical to the rapid growth of immersive attractions, reflected in the positive online reviews for some of key players. These reviews are especially important for those that are relatively new who want to engender peer trust and marketing buzz. Puy du Fou for example has an incredible 69,349 Google reviews averaging 4.8*.
As a result, new attractions that are only around 5 years old have built comparable social media followings as well as similar audience reviews to longer-established visitor attractions that have been around since the dawn of social media as the the table below indicates (including some of the best known cultural institutions globally).
|Social Media Followers (000)
|Leading Immersive Entertainment Providers
|Meow Wolf (Multi-Site / Multiple Accounts)
|CultureSpaces (Atelier Des Lumieres & other sites)
|Museum of Ice Cream
|Grande Experiences (The LUME)
|Leading Museums & Galleries (Melbourne & Sydney)
|Museums Victoria (Melbourne Museum, Scienceworks & Immigration Museum)
|Van Gogh Museum
|Whitney Museum of American Art
Figures correct as at April 2023
4. The age of the creative entrepreneur
This report has referenced a new generation of creative entrepreneurs behind the likes of Meow Wolf and teamLab who are tapping into the outlined trends to grow the immersive segment of the booming experience economy. These pioneers are building the creative businesses that are providing employment and helping revitalise our cities by bringing in new visitors and diversifying the 24 Hour economy. The New Mexico Economic Development Department predicted Meow Wolf will create 440 jobs and $358 million in economic impact over the next decade. They are already at over 1000 so have far exceeded expectations showing the potential to create fast growing immersive companies that can generate significant numbers of jobs and economic impact. Meow Wolf referenced Creative Startups, a local accelerator that helped them in their early days (they now contribute finance and expertise to this program to help other aspiring entrepreneurs).
It seems to me that if we could increase the number of creative entrepreneurs then this could further accelerate the growth of a sector that is already an undoubted success. In other areas such as the technology startup sector there are huge amounts of support for entrepreneurs such as incubators, accelerators, networks, industry lobbying, established public and private investment pathways and tax incentives. Creative entrepreneurs are sometimes able to tap into these but as with other segments of the innovation economy such as social entrepreneurship there is an opportunity for more targeted and specialised support for creative entrepreneurs which is covered elsewhere.
There is much more to say about these ‘upstarts’ as I call them in an essay REMIX recently contributed to the Creativity, Culture and Capital project where we explore how cultural sector policy could evolve to nurture both creative entrepreneurship and intrapreneurship (supporting change makers within cultural organisations).
5. New investment models are helping fuel the fire
Unrestricted by government funding or geographic territory, the rapid expansion of immersive experiences is in part being fueled by private capital (particularly in the United States). Meow Wolf, originally a volunteer art collective founded in 2008 are an example. A significant moment in their development was the 2011 installation at the Center For Contemporary Arts in Santa Fe. 100 artists co-created a large-scale installation consisting of a fictional inter-dimensional ship, ‘The Due Return’ which proved incredibly popular with its intricate details, interactive elements, and otherworldly atmosphere. The creative and commercial success of this project (plus the exhaustion caused by creating multiple temporary projects) caused the team to think about the development of a permanent attraction which was a key moment in their history and transformed the business model that underpinned their work.
They reconstituted as a company which is important as it allowed them to tap into investment funding to open their first permanent site dubbed The House of Eternal Return (also in Santa Fe). Notable investors include George R.R. Martin, Author of Game of Thrones who now holds the title of Chief World Builder at Meow Wolf and was an original investor contributing USD $2.7 million.
This project transformed a disused bowling alley into a 20,000 square foot choose your own adventure immersive art installation. The House of Eternal Return takes the form of a Victorian-style house with seemingly ordinary rooms and corridors. However, as visitors explore the space, they discover that there is much more to it than meets the eye. The installation combines elements of fantasy, science fiction, and surrealism to create a multidimensional adventure for audiences across over 70 interconnected spaces.
Despite Santa Fe’s small population of around 70,000 (with only 1.5 million international visitors due to the lack of a major airport), 400,000 people visited in the first year (2016). This was more than twice as many as the local Georgia O’Keeffe Museum. The House of Eternal Return also includes a music venue which hosted more than 75 shows bringing in additional revenue from events. The show has garnered incredible reviews from patrons (4.7* based on 16,777 Google reviews), it also became a big hit on social media with selfie favourites including the spot where visitors open a fridge in this seemingly ordinary house in order to enter the Meow Wolf ‘multiverse’. They had over 1.57 million followers across multiple social media platforms and accounts when I totalled these up in May 2023 and this mechanism has been a critical part of their growth. Visitor numbers have continued to grow and they claim 500,000 plus in 2019 the last full year before the global pandemic. In the first year of the House of Eternal Return, Meow Wolf achieved USD $6.8 million in revenue. 81% of this was generated from the Box Office (primarily from tickets and a small percentage from a membership program). Retail accounted for 9% of revenue and with a dedicated events space, 10% came from this source. Initial prices were about half the current prices ($18, $16 for age 65 and older, $12 for ages 3-12 with lower prices if you are from New Mexico compared to the 2023 starting adult price of $39), so given the increased visitor numbers in subsequent years (2019) you could comfortably double that original 2016 revenue figure.
Their original attendance target was between 100,000 to 150,000 depending on which source you read (which was their “break-even” figure) so the attraction is clearly highly profitable. They used this data to make a business case to secure new investment to build more sites. They raised USD $158 million of private investment in 2019 most notably from the Fisher Brothers, developers who saw both the box office value in immersive entertainment but its ability to take advantage of a changing real estate market where they could tap into lower rental rates. The Meow Wolf investment round is the largest amount raised by an immersive company to date and has been seen as a watershed moment that helps prove the potential scale and growing maturity of the immersive entertainment sector.
In a blink of an eye they are now up to 4 locations in the US helping prove this scalability. Santa Fe, Dever (Convergence Station) & Las Vegas (Omega Mart) are already open with Grapevine following shortly in July 2023. They also operate an ‘art ride’ in a theme park – ‘Kaleidoscape’ at Elitch Gardens in Denver theme park (also home to a Meow Wolf location). In 2022, Meow Wolf’s three permanent locations recorded a total of 2.7 million visitors so they are now directly competing with some of the biggest visitor attractions in the US. Meow Wolf is an example of a sustainable model for ongoing employment and they are supporting and commissioning large numbers of creatives as a result of their commercial success.
The scale of their ambitions is also clearly increasing (helped by the new investment at their disposal). The second attraction, Omega Mart in Las Vegas is just over double the size of The House of Eternal Return (1,900 sqm) at 4831 sqm but it has achieved double the visitation (over 1 million in the first year) and ticket prices are higher starting at USD $49 and climbing to $64 (plus the larger attraction has enabled them to offer VIP level of $99). The third attraction Convergence Station attraction in Denver is nearly three times the size of the original site. It has 5574 sqm of exhibition space in an 8825 sqm building spread across four levels (this is bigger than the Guggenheim and the Whitney Museum of American Art according to artnet). This larger attraction is therefore again able to charge a higher admission price of $45 to $55 and has achieved in excess of 1 million visitors in just 9 months so is a further step up again. The pattern of increasing floor space is not set in stone and choices are made according to each geographical location and site. The latest and fourth site The Real Unreal in Grapevine, Texas is nearer the size of The House of Eternal Return at 2694 sqm.
Meow Wolf is one of many immersive companies that are leveraging investment to grow. Another example is Two Bit Circus, heavily inspired by the maker movement which raised over $21 million to build a 40,000 sq ft ‘micro-amusement park’ in a giant warehouse in the LA arts district as a 21st century take on carnival. Developed in the words of CNBC by “a band of mad scientists, roboticists, visual artists and storytellers”, its attractions include a multiplayer VR arena, story rooms and even a robot bartender. They are also expanding, recently opening a second park in Dallas alongside plans for hotels. Some of the profits from their activities are funnelled into their foundation focussed on STEAM (Science, Technology, Engineering and Maths) projects to inspire the next generation reflecting the critical contribution of these disciplines to the success of their venture.
Something very powerful about immersive companies is their ability to leverage their tribal fan bases and social followings to fund their growth above and beyond more conventional investment. Once you build a community who are passionate about what you create you can then monetise that relationship to sustain and grow your creative practice. More and more creators have been using crowd-funding platforms like Kickstarter, Indiegogo and GoFundMe and while are no longer the new kids on the block they are part of a $1 billion dollar industry (2020) that is predicted to more than double by 2027 (Marketwatch). However, Crowd Equity allows fans to directly invest in creative enterprises (as well as other types of business) and this is really picking up steam as a concept. UK immersive experience pioneer Secret Cinema recently raised £4.7 million from fans and investors on CrowdCube to fund its growth.
Unlike the not for profit status of many cultural institutions, the corporate structures utilised by these creative entrepreneurs has not only allowed them to attract external investment in various forms which has allowed them to rapidly expand to multiple sites but where they have been successful they have created surplus funds that can also be used to support other creatives and causes as we will explore further later.
What is driving the growth of immersive experiences?
A series of extended articles produced with support from the British Council
A REMIX Curated Collection
Hear from 25+ global pioneers in immersive entertainment
On-Demand · £95