The Stinger Report #1275 - Riding the XR Wave – Part 2

At AWE 2026, leading investors observed a strategic pivot in XR, with a renewed focus on Location-Based Entertainment (LBE) and enterprise applications amid sector volatility. Qualcomm’s dominance with XR2 Gen2 processors, alongside new headsets from Lynx, Samsung, and Canon, signals a shift toward more affordable, powerful XR systems. The event highlighted significant advancements in LBE content, including collaborations with Universal Studios and the recognition of LBE in Auggie Awards. The decline of consumer VR investment, notably Meta’s retreat, has accelerated industry interest in out-of-home XR experiences, positioning LBE as a promising growth frontier.

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Transcript

Why AWE 2026 Matters

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This is the Stinger Report, issue number 1275, Riding the XR Wave, Part 2, by Kevin Williams. In the second part of our coverage from Augmented World Expo, AWE 2026, and we continue with the investment into the MR and AR aspects of the new XR tech race, and look at the other aspects of the Expo, conference, and awards that drove market interest. Doubling down on XR, the Californian AWE 2026 Expo revealed the need for the best XR systems at the right price was borne out across the event, with many of the new systems being applied to LBEXR.

The Hardware Race Heats Up

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Exhibitor and sponsor Quilcom took a prominent placement. The company's processors empowering the majority of XR wearables at the event, and in the industry in general. On their booth, they demonstrated the slew of applications empowered by the chipsets. The company also teased their new XR2 Gen 2 chipset for immersive platforms, including the new range of MR headsets. Already Pico, HTC, Samsung, and Meta depend on processing power from the corporation. News away from the Longbeach show and the French developer. Lynx, the company had presented their Lynx R2 headset, hoping to offer a unique MR platform and empowered by Qualcomm XR2 Snapdragon, XR2 Gen 2 processing. The system would be sitting alongside the Samsung Galaxy XR, the new Pico Swan, and a possible new entrant from Meta. But it was confirmed in April that Lynx had entered liquidation. Sources would later reveal that Essilor Luxotica was acquiring Lynx assets, and this would drive hopes that the hardware would be seen again. This and other news an indication of the volatility of the changed XR landscape. Prior to AWE, the news of VR studio closures and layoffs filled the media sites. The removal of much of Meta's investment into the VR space sending shockwaves throughout the sector. Meta was present at AWE 26 with both on-show closed booths and private meeting rooms, but it was clear the operation was focused on an AI slash AR trajectory. Many that had banked on MetaQuest headsets for LBE application seeing the writing on the wall. Another prominent exhibitor and sponsor at AWE26 was Samsung, one of the dominant forces in the MR and VR sector, their display technology employed in the majority of headsets built over the last 10 years. The corporation had on booth examples of their display and computing advancements, as well as their own entry into the MR headset scene with their Galaxy XR platform, developed in partnership with Google towards creating a unit to support both consumer and enterprises' needs in the change space. Another powerhouse in the sector, Canon presented at the Californian Expo with examples of their XRMREAL platform and their collaborations with AR Smart Glasses applications.

Conference Highlights And Augie Winners

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Conference Time and Awards. Along with the 400 speakers across the conference, a dedicated expert talk and panel session was assembled at the Gaming and LBE Hub at the Expo. Regarding the LBE portion of the seminar program, KWP had been retained to help lead the presentations and moderate the sessions. Following a keynote that outlined the scope and opportunity of the LBEXR market for the assembled audience, sessions included Itse's 3D and HTC Viverse operation, outlining the creation of avatar and digital humans employed in LBE content. Other sessions included scaling LBE for Japanese deployment, presented by Styley with their attractions work, such as their Anima Look experience at the Tokyo Resort. The developer announced on stage StyleY OS, a new platform based on their architecture, would now be open source, available to developers. The operation has also partnered with Pico. LBEXR Zone Exhibitors, Hololabs Studio, gave a session recounting their work with Universal Studios on the Mario Kart, AR attraction, and how they applied these experiences to the work on their new VR free roaming games as well as other projects. A fireside chat session saw Dream Park, along with Dave and Busters, discuss the deployment of the new Dreambox MR kiosk system within the E-Tertainment chain and the issues in creating strong MR content for LBE. Another aspect of AWE that has come to define the event over the last 17 years is the holding of the Augie Awards, recognizing excellence and achievement in the VR and AR industry. This year the awards included new categories, with LBEXR being recognized. KWP's founder was invited to be one of the judges, voting on the finalists selected. The award for Best Location-based entertainment was given to Interstellar ARC by Felix and Paul, currently installed at Area 15 in Las Vegas, while VR Cave won the Best in Show LBEZone Award. Congratulations to all the other recipients of Augie Awards, well-earned, and great to see the continued investment in the sector.

Expo Floor Turns To LBEXR

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New interest in LBEXR. Away from the LBEXR component, but still a major part in supporting the enterprise aspects of the business, was VR Expert, the company exhibiting their support of VR and AR hardware and software support for the enterprise scene. Another major supporter of the LBEXR scene exhibiting was Behaptics, showing their latest haptic vest and gloves applications, many of which will be finding their way into LBE facility utilization. Another exhibitor away from the LBEXR zone that were turning their attention to the opportunities in location-based application included RP1, having launched the Open Metaverse Browser Initiative, an open source project to build a standards-based spatial browser engine. The company is looking at digital twins for facilities and events, and the obvious location-based game and activities potential. While LBE may not have been the key focus a year ago, many exhibitors across the rest of the AWE 26 show floor were now heavily leaning towards an out-of-home entertainment application. One such was new startup Monsarat, demonstrating their new title, Landing Party, an experience that mixes virtual elements into the real world, offering a compelling game for both smartphone and MR headsets. Building on the proven drawing power of Pokemon Go, but with a configurable large environment model, offering an outdoor RPG in what the founder of the company has defined as landscape reality. Expo Exhibitor Reality Check represented an immersive entertainment discovery platform, allowing audiences to find VR, AR, 360 degrees, and now location-based entertainment experiences. A database of content accessible to all, including the purchasing of tickets and nearest venue details. The platform aims to help struggling content creators gain visibility, expanding to embrace LBEXR content. One of those content creators was fellow exhibitor VirtualGo. Known for consumer mixed reality experiences, the company has expanded into location-based entertainment, offering commercial licenses that turn any size or shaped environment into a playable MR game for LBE facilities. While not using VR or MR headsets, the University of Central Florida, UCF, demonstrated an immersive 3D screen system hooked up to a Virtuex Omni 1 directional treadmill. The operator views via the immersive 3D projection enclosure the world seen by a robot that they control. A fascinating example of telepresence as the robot navigated the show floor. Speaking

Virtuix Explains Omni Arena Exit

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of Virtue, we were able to catch up with the VR developer of the popular omnidirectional system. As we have reported, the operation is now a public company, focusing their market effort on their new OmniOne platform for consumer and some enterprise applications. Regarding the LBE sector, the company has been incredibly quiet concerning their support of this entertainment market. In exclusively speaking with us, Virtuex clarified that they had installed over its history some 80 Omni Arena systems. But obviously, the turnkey multiplayer eSport VR attraction using HTC Vive headsets was launched in 2018, and much has happened since in the sector. Virtue confirmed they stopped producing the arena in 2025, but actively facilitate secondary sales and support remaining operators through the Omnicare maintenance service. There are currently no plans to return to the LBEXR scene with their new omnidirectional platform. That said, from a review of the over 40 still operational Omni Arena platforms across the sector, they are still generating valuable revenue for their venues, along with tournament business, an impressive testament to the Virtuix platform, and an underpromoted indicator, no matter the hype, of how VR has generated serious returns for those facilities that have continued to operate the tech professionally.

AI Tools And Vibe Coding Demos

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Away from the VR and AR, AWE exhibitor BLAMO, reflected the coding and modding that also is encapsulated by the XR Expo. The company demonstrated their Spacebar Arcade, a vibe coding platform allowing users to create AI game content played on a mini arcade GameCube as well as played on VR headsets. The growth in vibe coding, using simple natural language prompting AMAI to create content, expected to be seen appearing in mainstream game development. AWE 2026 included several exhibitors, roundtable sessions, and mixers, expanding the impact of AI development in the XR sector. In conclusion, this first AWE, comprising a dedicated LBEXR zone, proved a compelling and overall successful gathering. Still impacted by first show growing pains, as some companies attended to see what was happening rather than exhibit, this was still a strong draw and a foundation the organizers are preparing to build upon for the 2027 Expo. The organizers are also looking across their other European and Asian expos to incorporate an LBE element. The watchword for the show was serendipity, as presented at the welcoming keynote presentation that commenced the expo, defining the way that tech was applied to applications that were accidentally discovered as being the killer app that defines the platform's use. For the consumer tech, that moment where the customer base says, I need that. While consumer VR may have fallen on hard times as it looks to find a new champion and reinvigorate investment, a WE-proved commercial applications of XR have reached that I need that moment. The XR sector will see the next big gathering with the co-joined AWE event, United XR Europe, in December in Belgium, while next year there will again be AWE US, A2027 in June, returning to Long Beach. This will be followed by AWE Asia 2027 in July in Shanghai. We hope to report on an expanding LBEXR zone offering for these events, along with news on how the LBE sector can play their part to define, grow, and evolve in this compelling market.

Meta Fallout Fuels LBE Momentum

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The pivot to LBEXR. It would be difficult for even the most jaded of observers to ignore the sudden interest in LBE at the AWE Expo. The implosion of the consumer VR scene aside, enterprise and along with that commercial entertainment applications were seeing newfound interest. Interest from content and application developers as a more secure route to market and offering a more defined business opportunity. For many VR developers, the derailing of the consumer VR gravy train has revealed a truth that hype alone cannot pay the bills. Also, for many, the realization that the consumer VR sector had been artificially propped up by the considerable investment by Meta towards controlling the sector has hit hard. With the withdrawal of that said investment, estimated as being some $80 billion over the last five years, A game studios developing VR content have shuttered or instigated massive layoffs as they reallocate resources to survive. That investment that Meta had injected into attempting to control the consumer VR sector took on the face of three key areas: the subsidizing of VR headset hardware, the creation of a centralized content delivery platform, defined as the Metaverse through the Horizon World Portal, and the control of the message to the sector. This last area saw media and influencers encouraged to only focus on one aspect of VR delivery and to only praise a standalone mobile VR approach to adoption. Any discussion of other approaches or markets was discouraged by the removal of access to information or funds. Now, with the removing of the veil from their eyes, many VR industry observers have been surprised to see there is an industry outside of consumer. Without the censorship, surprised coverage of LBE applications, ranging from the new large audience free roam adventure systems to the continued growth of VR entertainment centers can now be reported without fear of being pressured by those controlling the taps. What this will mean for the future of the VR scene going forwards is difficult to say. The continuance of consumer VR is now dependent on a reboot towards a PC VR future. Dependent on the success of the new valve frame VR headset hardware. If this is impeded by a higher than expected release price, then it is expected that VR will continue to be a niche technology, and as with the tech sector, it will move on to other interests. Whatever the case, the LBE application seems to be gathering greater momentum, and with that a great understanding of the opportunity it offers to developers.