Sandbox VR: The First Globally Successful VR Company

November 01 2021

sandbox vr

Virtual Reality (VR) has been on a bumpy ride. Although there was a surge in VR interest from 2014 to 2016, the excitement began to wane in 2017 as users experienced the issues facing the new technology: the screen door effect, the feeling of being a disembodied head, motion sickness, and the friction of use caused by a pricepoint that was unreachable for the average consumer. And let's not forget a substandard hardware that was distributed to the only most dedicated technophiles.

But a lot has changed since the early days of VR, and the technology is making a comeback: the first wireless head-mounted displays (HMDs), such as the Oculus Quest, have made their entrance into the mainstream, and slowly but surely developers are finding fixes to some of the problems that have plagued VR from the beginning.

While VR is still at a very early stage in its development and is far from true mainstream adoption, innovative companies, like Sandbox VR, are laying the groundwork for a new VR paradigm that may prove to have more mass appeal and lead to faster consumer adoption than previous iterations of VR tech.

Table of Contents

What Is Sandbox VR?

Sandbox VR is a virtual reality company that was founded in 2016 by Steve Zhao, who also serves as the current CEO of Sandbox VR. Although the company was originally based out of Hong Kong, it has since moved its headquarters to San Mateo, California.

Compared to other VR companies, Sandbox VR stands out because of its focus on full-body, in-person, social, virtual reality experiences. Instead of strapping on a headset and grabbing controllers while standing alone in your living room, Sandbox VR customers go to physical, brick-and-mortar locations with up to six of their friends (think of the same general idea as escape rooms or laser tag, but for VR).

There, the players are outfitted with full-body motion capture devices, VR-ready backpack computers, haptic vests, and other game-specific items that create a more immersive experience. Not only do the players get access to high-quality tech, but they can even high-five their friends, which creates an unheard-of level of immersion.

In essence, Sandbox VR was designed in the spirit of the Star Trek holodeck, a room made to run immersive 3D simulations, according to Zhao.

However, creating this unique experience meant that Sandbox VR would need to build its own proprietary experiences and much of its own hardware itself, which proved to be challenging. To a large extent, Sandbox VR’s trajectory has mirrored that of VR as a whole. At first, it didn’t seem like the company would make it: shortly after the company launched in 2016, VR entered its “nuclear winter” of 2017, and Zhao was having a difficult time convincing investors of the viability of his new venture.

“We couldn’t get investors interested,” said Zhao in an interview with a16z/Andreesen Horowitz, the venture capital firm that eventually became a major investor in the company. “We talked to many of them, and they wouldn’t even write back. I guess they just couldn’t really think this would be a viable business.”

With one month of runway funds left, Zhao sat his team down and told them that the company would be gone in a month. However, he felt that letting the company die out would be a real shame and offered to invest his life savings, which he had built up over the last 10 years of work, to save the company.

“I can invest everything into this,” said Zhao. “I ran it by my friends and family, and everyone was like ‘Steve, don’t be stupid, don’t use all your money to this company again’...it was a really risky bet.”

But Zhao took the bet. He and his team realized that they wouldn’t be able to convince investors yet, so they scrapped their plans of building a demo and decided to bring the product fully to market within just six months. By late June 2017, they had their first room open to the public.

Source: The a16z Pitch Room: Sandbox VR

Note the gentle decline in Sandbox VR’s monthly revenue throughout 2017, which resolved as interest picked up again in 2018.

Eventually, it paid off. Although the first six months after launch showed slightly declining revenue, things picked up in the winter of 2018. At the beginning of 2019, Sandbox VR secured $11 million in investmentshttps://venturebeat.com/2019/10/22/sandbox-vr-raises-11-million-from-silicon-valley-and-hollywood-elite-from-andreessen-horowitz-to-justin-timberlake/ between the San Francisco venture capital firm Andreesen Horowitz and celebrity icons Justin Timberlake and Katy Perry. This brought the company’s total investment to $83 million.

From there, Sandbox began an aggressive expansion across the world, with eight locations in North America and four in Asia. There are also plans for two more in North America and a flagship European location in London.

Source: sandboxvr.com, Screenshot from October 29, 2021

Although Sandbox VR hit a snag and filed for Chapter 11 bankruptcy due to the COVID-19 pandemic, it has reemerged and has reported a 30% increase in demand compared to before the pandemic.

High-Quality Ingredients: Hardware, Software, and Location

Sandbox VR has hit a sweet spot in the burgeoning VR market by combining three ingredients: unique hardware, exclusive software, and an unparalleled location-based experience. Let’s take a look at what Sandbox brings to the table (no pun intended) in each of these three domains.

Hardware

For the most part, consumer VR experiences have focused on only three pieces of equipment: an HMD, two controllers, and a processor, which could either be a PC, mobile phone, or built into the headset, like with Oculus Quest.

Sandbox VR ups the ante with additional hardware that makes the experience more immersive. In other words, instead of VR equipment looking like this:

Pictured: Oculus Quest 2 Source: Oculus

And the play experience like this:


Pictured: Oculus Quest 2 player Source: Oculus

With Sandbox VR, the equipment looks like this:

sandbox vr uniforms
Pictured: Sandbox VR equipment Source: Sandbox VR Franchise Brochure

And the play experience looks like this:

Pictured: Sandbox VR players Source: Sandbox VR Franchise Brochure

But let’s get a bit more specific. Sandbox VR uses the following hardware:

  • Head-mounted Display (HMD): Sandbox VR uses industry-standard VR headsets, like the HTC Vive and Oculus, in its locations. This part of its technology is not proprietary.
  • Backpack Computer: To allow free range of motion, players strap a notebook computer, made by a company like MSI, to their backs.
  • Motion Capture Sensors: Players are outfitted with motion capture trackers on their wrists, feet, headsets, and other peripherals and props, like guns. These devices use a combination of external motion capture and internal kinematics to track players’ movements. This is one of Sandbox VR’s proprietary technologies.
  • Haptic Vest: To allow for further immersion, players wear a haptic vest, which simulates tactile sensations within the game. For example, if a zombie hits you, the vest may vibrate. This is another one of the company’s proprietary hardware items.
  • Communications Headsets: Players wear headsets with microphones in addition to their HMDs so that they can communicate with their teammates throughout the experience. Some of these headsets are made by Razer.
  • Additional Peripherals: Depending on which game the players choose, they’ll use additional peripherals, like prop guns, to get a more immersive experience. Some experiences also make use of wind effects (a row of fans) to increase the immersion.

Software

One of the things that sets Sandbox VR apart from the competition is that all of its experiences and adventures are exclusive to Sandbox VR. In other words, you can’t play any of the company’s games anywhere else.

Currently, Sandbox VR offers five experiences and adventures:

  • Curse of Davy Jones: A pirate-themed game appropriate for both kids and adults. Players are tasked with finding a lost treasure.
  • Amber Sky 2088: Players shoot robots and aliens in the future city of New Hong Kong.
  • Star Trek: Discovery: A Star Trek-themed game built in partnership with CBS. Players use their phase guns to fight off enemies while they explore alien worlds.
  • Deadwood Mansion: A horror, zombie-shooter game in which players try to survive a creepy mansion.
  • Unbound Fighting League (UFL): A sci-fi fighting game in which players become futuristic gladiators and face off against their friends. The experience is designed to combine physical sports with esports.

games you can play at sandboxvr
Pictured: Sandbox VR experience lineup Source: Sandbox VR

Overall, the games that Sandbox VR offers are very much like arcade offerings: they are short, mechanics-driven experiences. They are designed primarily to give groups of friends a fun social experience with each other, so they rely heavily on teamwork and pure and simple fun. However, Sandbox VR isn’t a typical VR arcade, despite the similarities: its offerings are a cut above the rest, which gives it the feeling of a luxury, futuristic experience, rather than a run-of-the-mill arcade.

It is worth noting, however, that given the context these games are built for, they are very different from the longer, narrative-driven offerings available on PC VR and the Oculus Quest, which are better-suited towards solo experiences. However, that doesn’t reflect poorly on their quality at all: they are simply designed for different purposes.

Location

The Sandbox VR experience starts before the first HMD is put on and the first game is loaded up. As soon as guests enter the Sandbox VR location, they’ll find a modern design, friendly staff, and a space that’s crafted to be a great place to hang out before and after a game.

Pictured: Sandbox VR in Austin, TX Source: Sandbox VR website

This integration of the real-world location into the experience helps ease the transition between reality and virtual reality for the players.

And it’s no surprise that players love it: across the board, Sandbox VR locations have received fantastic reviews on sites like Yelp and Tripadvisor. In fact, Sandbox VR’s Hong Kong location is currently ranked as the sixth best activity in the entire city on Tripadvisor as of October 2021.

Sandbox VR’s current locations (and upcoming locations) are:

  • Americas:
    • Austin
    • Chicago
    • Las Vegas
    • Los Angeles
    • Vancouver
    • Minneapolis
    • San Diego
    • San Francisco Bay Area
    • Vancouver
    • Paramus (Coming Soon)
    • Toronto (Coming Soon)
  • Asia:
    • Hong Kong
    • Singapore
    • Macau
    • Shanghai
  • Europe:
    • London (Coming Soon)

The Keys to Success: Market Ripeness

Although VR has been slow to catch on, the market is currently at a point where VR companies can start to make a splash, if they play their cards right. While standalone and PC VR HMDs still haven’t entered the mainstream, experiences like Sandbox VR are poised for aggressive growth.

Why is that? Over the past few years, there has been an emerging trend that millennials are more eager to spend their money on experiences than on items. According to a study by the Harris Report, 72% of millennials prefer to purchase experiences over things. This may explain some of the growth behind other similar experiences, like escape rooms and axe throwing, which saw major increases in popularity before the pandemic.

Even though the average millennial may not be willing to spend several hundred dollars on their own VR setup, many millennials are interested in trying it out, and Sandbox VR gives them the opportunity to do just that — while having a great time with their friends, of course.

Indeed, Sandbox VR is built around creating a fantastic social experience, and it even offers recap videos that blend in-game footage with video of the real-life players, which makes for a practically irresistible social media share. This social-first mentality will be a major driver in Sandbox VR’s growth.

Sandbox VR’s Competitors

Sandbox VR may be in the VR space, but it’s not competing against the likes of Facebook/Meta (Oculus), Valve, or HTC. In fact, Sandbox VR’s competition is relatively small. According to Craft, its biggest competition is still quite a way’s away from really giving Sandbox VR a run for its money:

sandbox vr competitors

Source: Craft — Top Sandbox VR Competitors

Its closest competitor is the Russia-based ARena Space. However, Arena Space can hardly compete with what Sandbox VR has to offer. While Sandbox VR has proprietary technology and exclusive games, ARena Space VR simply gives customers access to consumer-level VR tech, such as Oculus and HTC Vive HMDs, along with a library of publicly available games with a few rides thrown in. The experience is a good way to introduce people to VR, but it’s closer to an in-store demo than it is to a fully-immersive social experience, like Sandbox VR.

One feature that ARena Space does have over Sandbox VR, however, is that it also includes AR experiences as well.

Pictured: ARena Space VR Experience Source: ARena Space Website

Pictured: ARena Space AR Experience Source: ARena Space Website

Most of Sandbox VR’s other competitors, like The Dream Corporation and VR World NYC, follow suit, giving customers access to consumer VR HMDs and readily-available games, but nothing that’s exclusive or can’t be had by buying an HMD yourself. Although these companies have valuable offerings, they are more akin to true virtual reality arcades, whereas Sandbox VR is attempting to build a high-end, immersive VR experience.

Pictured: A selection of VR World NYC’s offerings, all of which are available either on Steam, Oculus, or Youtube. Source: VR World NYC Website

The Future of Sandbox VR

As Sandbox VR continues to grow, one of its primary obstacles will be its ability to create and source new and exciting experiences. While Sandbox VR makes its own experiences, working with additional game studios could expand its offerings beyond what it is capable of making fully in-house.

Additionally, Sandbox VR has yet to tap the European, South American, Oceania, and African markets, which could prove lucrative. In the future, Sandbox VR hopes that its locations will be as commonplace as movie theaters.

One thing is clear: the success of Sandbox VR, along with almost all other companies in the XR space, will depend to a large extent on the supply of talented XR developers. This market reality makes it an ideal time to learn how to design and develop XR experiences yourself.

If you’re interested in building a career in the growing XR industry, click here to check out our professional XR design and development course offerings.

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REVIEWED BY

dejan growth marketing

Dejan Gajsek

Head of Marketing

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