Virtual reality (VR) business Immotion Group struggled to bounce off record lows of 6p on Thursday despite revealing a major distribution deal for the Middle East and North African (MENA) region. The tech company, which remains well below the 10p it listed at last July, has appointed Dubai’s Warehouse of Games as its exclusive partner for the critical developing territories.
The World Travel & Tourism Council expects MENA’s tourism industry to grow from $224bn in 2017 to more than $365bn by 2027. The global body believes the leisure and religious tourism sectors will drive this progress. Meanwhile, leisure spending in the region is expected to grow by 4.3pc a year to $202.6bn in 2028.
Warehouse of Games will sell, distribute and maintain Immotion’s products to its MENA client base. Immotion installs virtual reality ‘experience centres’ in hotels and entertainment centres around the world alongside concessions in shopping centres. These allow users to simulate things like car racing, space, and dinosaurs using cinema pods as well as providing more education-focused experiences.
Warehouse will handle the ground delivery, installation, and repairs on these products, allowing Immotion to fulfil the terms of its recently announced revenue-sharing partnership with Al Hokair. Al Hokair owns and operates 79 entertainment centres and 34 hotels across Saudi Arabia and the United Arab Emirates. Under its deal with the conglomerate, Immotion will install its first centre in Abu Dhabi next month at the Sparkys Family Entertainment Centre
In Wednesday’s update, Immotion said its deal with Warehouse provides a low-cost way of advancing its ongoing strategy of becoming a leader in the ‘out-of-home’ VR experience market. It expects Warehouse to use its strong local knowledge to find additional high footfall sites, allowing further expansion.
Immotion chief executive Martin Higginson said the partnership will strengthen the company’s global position.
‘With leisure spending in this region predicted to grow rapidly in the next ten years, we anticipate significant demand for out of home VR centres in this area,’ he added. ‘With this agreement now in place, we can scale our efforts in this region at low cost with confidence in the supply and maintenance chain.’
Meanwhile, Warehouse chief executive and founder Nabil Kassim said the tie-up would help to expand the organisation’s global portfolio in the amusement industry.
The news comes just weeks after Immotion launched a £3m growth placing at 6p a share. The proceeds are being used to accelerate its growth plans, specifically covering hardware, content development, and operational cashflow.
Alongside the placing, the company said it had agreed on a roll-out of its cinematic platforms with several Merlin Entertainments subsidiaries. This includes the Lego Discovery Centre, LEGOLAND, and SeaLife brands.
The business also expects to install an additional 200 headsets this year. Most of these will be at concessions, but several are expected to be smaller ‘machine sales’ to places like leisure arcades and family entertainment centres.
Elsewhere, Immotion said it had signed an additional VR experience licence for the Chinese market. This will generate minimum revenues of £224,000. All-in-all, the firm said overall 2018 trading was in line with market expectations.