Immotion Group, which only joined AIM last summer, makes immersive virtual reality ‘pods’ and the content that goes with it.
Customers can put on one of the Immotion headsets, sit in a pod or a racing car, for example, and take in experiences that range from rollercoaster rides to supercar racing right through to fighting alien invaders in space.
The company, which is still a relative tiddler at £12million, also has an ‘edutainment’ – education and entertainment combined – division.
Virtual reality: York Museum used Immotion for its Jurassic exhibition and Sir David Attenborough opened the event feeding a dinosaur in virtual reality
York Museum, for example, used Immotion for its Jurassic exhibition and Sir David Attenborough opened the event feeding a dinosaur in virtual reality.
It has signed revenue-share agreements with a host of household names, such as Grosvenor Casino operator Rank, Thorpe Park parent Merlin Entertainment and Gravity trampoline parks.
Immotion puts its products in their sites and splits the revenue they generate, which can be upwards of £400 per headset per week.
It also sells its products outright to private buyers, operates in its arcades and licenses out its content and experiences to other companies.
A quick look at last year’s figures will give you an idea of the kind of trajectory Immotion is on.
Turnover of £100,000 in the first half of 2018 rocketed to more than £1 million in the second half as it installed more of its headsets throughout the UK.
Chief executive Martin Higginson is confident that this growth still has a way to go.
Immotion currently has 150 or so headsets in operation, but it is on track to take that figure above 1,000 by the end of 2019.
That growth will be fuelled by a recent £3.3million fundraise, which will help it finance the roll-out of its headsets in more casinos, attractions and shopping centres.
For example, Immotion’s products are only in five of Rank’s casinos currently, while Merlin recently agreed to put the pods and VR platforms in most of its Lego Discovery Centres, as well as a trial run in three of its Sea Life centres.
Aquatic attractions are a huge opportunity says Higginson, with new experiences such as observing humpback whales and a ‘Jurassic under water roller-coaster’ already under development.
Higginson believes shopping centres will also be a key revenue stream over the next couple of years as they look to entertainment to reverse slowing footfall.
‘Initially we would rent space from shopping centres but now we’re working much more in partnership with them.
‘So they’re now taking some of the risk.’
Immotion has signed revenue-share agreements with a host of household names, such as Thorpe Park (pictured) parent Merlin Entertainment and Gravity trampoline parks
It’s a completely different model than it once was, he says, and something that has evolved over the past year as shopping centres have been forced to look at ways to boost visitor numbers.
‘The reality is shopping malls have got to change if they want to hang on to their audience because it’s no longer just about shopping.
‘People still want to go out, but millennials are more into buying experiences now over goods, so we fit very much into that category.’
While the UK is currently the focus, what is just as exciting is the potential abroad. Immotion struck a licensing deal in China earlier this month with its VR hardware supplier in the country.
LEKE VR is paying at least £224,000 over the next year for the right to install two of Immotion’s experiences on its own platforms with a further £588,000 for the right to sell 12 experiences to other VR hardware makers in territories where the company has no presence.
The group is targeting more rapid growth across the pond, where it recently opened its first test site in Los Angeles and hopes to have 100 US centres open by the end of 2020.
In November, Immotion made a move into the potentially lucrative Middle East market through shopping malls owner Al Hokair.
An ImmotionVR Experience is being trialled in Abu Dhabi, but with Al Hokair owning dozens of shopping centres, there is chance for that figure to grow substantially.
As mentioned earlier, Immotion is on track to have more than 1,000 headsets in operation by the end of this year.
Higginson says initially it looks for £250 per week gross from a headset, though the Lego Discovery centres are already doing considerably better than that. At £400 per week, the headsets become very profitable both for Immotion and the site owner, he adds.
As a small company pioneering a whole new field of entertainment there are financial and execution risks. But if Immotion delivers on its targets the potential upside from the current 6.5p share price look to be substantial.