VR Startup Dreamscape Pivots to Virtual Reality Learning

January 11. 2021. 5 mins read

It’s hard to say which industry has suffered the most from the pandemic over the last year. While there are a few professions that perhaps should go extinct – professional cuddlers anyone? – it will take years to recover from the job losses and economic fallout in some industries. Movie theaters are certainly high on the casualty list. Three publicly traded movie theater chains claimed more than $1 billion in losses in the third quarter of 2020, CNBC reported. Familiar names like AMC (AMC) and Cinemark (CNK), for example, saw revenues plunge more than 90% in the most recently reported quarter. 

VR Meets Hard Reality

For virtual reality (VR) theaters, where users spend about 20 minutes or more indoors hooked up to headsets and haptic gear, the ’Vid has been a VR killer. One of the most well-known VR immersive content startups, Sandbox VR, reportedly laid off 80% of its staff by the end of April last year. The Void, which operates more than a dozen VR theaters around the world, is also in financial straits. Another leading brick-and-mortar VR company, Dreamscape Immersive, has partly pivoted to virtual reality learning to keep the lights on. Today, we’re going to look at this new part of the business and the larger trend of VR in education and training.

The pre-Covid predictions for VR location-based entertainment.
The pre-Covid predictions for VR location-based entertainment. Credit: Technavio

It wasn’t like VR in general was hitting it out of the park to begin with, though location-based entertainment venues like those operated by Dreamscape were seen as one of the possible sparks that could reignite the industry. We tried Zero Latency’s offering in Riyadh and found the experience to be quite an engaging workout. Anecdotally, these hybrid arcades/theaters/amusement parks were actually making money. Then COVID shut it all down. As Sandbox VR startup founder and CEO Steve Zhao was quoted as saying, “We went from a relatively healthy business to zero revenue.”

VR for Location-Based Entertainment

Click for company website

Los Angeles-based Dreamscape, founded in 2016, had taken in $30.6 million in February 2020, about a month before the World Health Organization officially declared COVID-19 a pandemic. The Series B round, which brought total funding to $67.6 million, attracted money from a number of Hollywood elites studios including MGM studios, 21st Century Fox, and Warner Bros. Some readers might be familiar with a guy named Steven Spielberg, who chipped in a few bucks as well. The only venture capital cash in the latest round came from Bold Capital, a firm that has backed a number of startups that we’ve covered before, such as AI healthcare startup AliveCor, DigiLens with its enterprise AR hardware, longevity companies like Elevian, and Relativity, which is 3D printing rocket engines

We actually wrote about Dreamscape nearly five years ago for a list of VR startups creating interactive content. At that time, the startup had raised about $11 million and was planning on opening its first VR multiplex in Los Angeles, which today is still shutdown due to COVID. Dreamscape’s other three venues in Dubai, Dallas, and Columbus, Ohio are operating again. The Columbus location opened around the time of the Series B round last February. Some of the new money was earmarked for additional venues in 2020 but obviously that never happened.

Starring in a VR Movie

The wizards at Dreamscape have developed a VR experience based on “motion capture” technology used in Hollywood movies. The platform tracks six people simultaneously, in real-time, with full-body presence, and renders them as characters inside a computer-generated world. So far, Dreamscape has created four adventures since rolling out the first location-based entertainment venues in 2018:

VR experiences from Dreamscape.
Credit: Dreamscape Immersion

While in our experience you fight and smite dragons – not ride them – Dreamscape teamed up with DreamWorks Animation in 2019 to create a VR experience based on the latter’s “How to Train Your Dragons” movie series, which has generated about $1.6 billion in ticket sales alone. The 11-minute experience involves dragon rider trainees who must embark on some sort of rescue mission while enjoying the sensation of flight, all for the low price of $20. 

Virtual Reality Learning

Dreamscape’s first VR content production was Alien Zoo, where participants roam around an intergalactic menagerie filled with endangered species. It was based on a Hollywood script co-written by Spielberg and Walter Parkes, a screenwriter and producer who also happens to be co-founder of Dreamscape. Now Alien Zoo is being repurposed for a new project with Arizona State University called Dreamscape Learn. Here’s how a news story from the university describes the new venture: 

Alien Zoo will become an immense VR ‘laboratory’ that allows students to explore, observe and collect digital specimens and solve problems that reflect the key concepts taught in introductory biology. Working independently or in teams, students will confront issues arising in real wildlife refuges on Earth, such as treating infectious diseases, managing genetic diversity and balancing food webs. In doing so, they will complete the requisite coursework for introductory biology in an entirely new, experiential way.

Makes dissecting a frog in biology class sound kind of boring, doesn’t it? Dreamscape Learn is expected to roll out this year, with additional subjects to be added in 2022. One can imagine taking the concept to real-world places for archaeology students, who could explore ancient sites like Petra in Jordan without getting on a germy airplane. Last month, we wrote about another type of VR edtech application for virtual labs by Labster that offers more than 150 simulations on everything from preparing lab samples to working safely with biohazards like dissected radioactive frogs. 


The case for VR as a complement to the classroom isn’t just predicated on the pandemic bump that propelled companies like Zoom (ZM) to a nearly $100 billion market cap. A number of studies have shown that immersive learning experiences like virtual reality can have tangible benefits. A University of Maryland study in 2018, for example, found VR could help improve memory recall. Specifically, 40% of participants scored 10 percent higher in recall when using VR headsets. A more recent study out of Tufts University found a VR environment was conducive to training healthcare students to enhance patient care.

Another vote of confidence in virtual reality learning comes from the U.S. government, which awarded Dreamscape a multi-million dollar training contract within the Defense and Intelligence agencies, Forbes reported. And an article in ZDNet noted just how much the military likes tech gear such as VR and augmented reality headsets for training exercises and battlefield deployments, quoting a market report that claims revenues could top nearly $1.8 billion by 2025. 

We’re still waiting to see if the shift to virtual everything in 2020 will create a lasting effect on VR/AR outside of enterprise applications that were already driving the industry. Dreamscape is obviously one company that sees the business reality of offering new applications beyond fantasy.


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