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Illucity, the virtual
reality adventure park, and CinemaNext VR, the
virtual reality arcade offer
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The Group aims to open
several dozen Illucity centres and at least 200 arcade sites in partnership
with cinema exhibitors worldwide by the end of 2020
Ymagis Group, the European specialist in digital
technologies for the film industry, today presents its new virtual reality
activities.
Creation of
a structured offer in line with market expectations
Since Ymagis Group was founded, it has pursued an innovation
policy placing it at the heart of the digital transformation of the
entertainment industry. Today, this industry is experiencing a new revolution
with the irruption of virtual reality technologies (VR). Halfway between cinema
and video games, virtual reality is already a global phenomenon benefiting from
an advanced technological environment.
In view of this, Ymagis has developed VR leisure centre concepts
in which the general public will have the opportunity to discover premium VR
content. To deploy these centres, the Group has opted to standardise game
spaces and apply a network approach. This strategy will offer greater exposure
to the content producers with whom Ymagis wishes to establish long-term
partnerships. Ymagis aims to progressively build a catalogue with a wide range
of VR content available in each of its centres, making them increasingly
attractive to the public.
Two target
market segments: arcades and adventure parks
After an in-depth study of the existing virtual reality offers,
the Group is targeting two market segments: i/ VR arcades designed for cinema
exhibitors and ii/ Illucity adventure parks, proper stand-alone VR centres
which can be coupled with cinemas or other locations with sufficient
floorspace.
It will be possible to install VR arcades covering 30 to 100 m2
in lobbies or other spaces available in cinemas to be directly managed by the
exhibitors themselves who will thus be able to optimise their human resources. The
arcades will enable exhibitors to diversify their revenue sources, increase
traffic and contribute to winning back the “millennials” target group. The
business model for this activity is based on the sale or hire of equipment by
CinemaNext to exhibitors and the supply by Ymagis of top quality VR content
from its producer partners using a revenue-sharing model. This model is
financially reassuring and cost-effective for exhibitors while guaranteeing
Ymagis and content producers an attractive level of profitability.
In parallel to this offer, the Group is launching Illucity, the
first adventure park network offering a highly diverse range of top-quality VR
experiences brought together under one roof in venues covering 300 to
2,000 m2 with four different types of content: free-roaming,
escape games, simulators and arcade games, and lastly cinema content. In this way, Illucity deploys a varied array of immersive
experiences with something for everyone from individual players to families,
groups of friends and companies.
The Illucity centres will be developed in partnership or under
franchise with cinema exhibitors who are partners of the Group
in priority, or in some specific cases, they will be run
directly by the Group. Most of the income from the centres will be generated by
ticket sales, the prices of which will range from €5 to €35 depending on the VR
experience, as well as by related sales. For a surface area covering an average
of 1,000 m², the projected annual revenue is €2M.
With a return on investment expected in less than two years for an
investment of €1.5M per 1,000 m² venue, the first Illucity sites will be initially
financed on a site-by-site basis by bank loan and leasing. The operating
profitability, with an estimated EBIT margin of 20 -30%, means this funding
approach can be continued in the long-term. However, to accelerate development,
other funding opportunities are currently being studied.
Aim: become
an international player in the virtual reality leisure centre sectorYmagis Group is the first market operator to offer an industrial
approach to the creation of standardised VR venues with a turnkey offer for
cinema exhibitors. The Group aims to become an international player in the
virtual reality entertainment centre sector.
The first Illucity centre is due to open at the end of November
2018 in Paris, and upcoming launches are scheduled in Marseille, Nantes, Brest,
Nice, Toulon and Liège (Belgium). Discussions are also underway with several
international cinema exhibitors in the Middle East and Europe.
The first VR arcade installations should take place from December 2018 onwards.
The Group aims to have equipped several dozen Illucity centres and
at least 200 arcade sites in partnership with cinema exhibitors worldwide by
the end of 2020. This new activity with strong potential for profitability
should therefore constitute an important driver for sustainable growth for the
Group and strengthen the earnings targets scheduled in the Perform Plan for
2020.
