Virtual reality arcades and other out-of-home VR destinations have been some of the worst affected businesses during the COVID-19 pandemic. Sandbox VR, one of the most well-funded in the industry, has been no exception, as the company’s US-based subsidiary Glostation USA Inc. filed for bankruptcy back in August. Now it’s come to light that Glostation has been reorganized, effectively pulling itself out of Chapter 11 bankruptcy.

Update (December 10th, 2020) A representative from Sandbox VR tells Road to VR that, as of late last month its US subsidiary, Glostation USA Inc.’s court-approved reorganization plan has allowed it to emerge from its Chapter 11 bankruptcy, which was filed in August 2020. Sandbox VR tells us the company was able to restructure remaining debts to stabilize financials and continue to grow its operations.

According to Bloomberg, to keep doing business the California-based Glostation is receiving funds from parent company Sandbox VR Inc, which includes a restructuring amount of $13.6 million of secured debt.

With an effective vaccine on the rise, it seems backers are hopeful for a possible resurgence of the company’s location-based VR facilities. The original article reporting the company’s Chapter 11 filing follows below:

Original Article (August 14th, 2020): Sandbox VR does business in the United States under the name Glostation USA Inc., which has filed for Chapter 11 (along with a number of associates) at the U.S. Bankruptcy Court in Woodland Hills, California. The news was first reported by The Wall Street Journal.

Sandbox operates multiple locations in North America and Asia, and hosts both branded VR content such as its Star Trek: Discovery experience and in-house developed games. Experiences last around 20 minutes and can accommodate up to six people per session.

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Despite having already reopened a handful of locations recently it appears the damage of staying closed for such an extended time has taken its toll on the company. Back in early June, Sandbox VR CEO Steven Zhao told Protocol that the company had effectively lost “100% of the revenue,” something that led Sandbox to lay off 80% of its staff. Former CEO Siqi Chen and a number of the company’s developers also left the company.

Since its founding in 2016, Sandbox has garnered over $80 million in outside funding, with the most recent round led by celebrities such as Justin Timberlake, Katy Perry, Orlando Bloom, and Will Smith. Sandbox was also funded by Andreessen Horowitz, Alibaba, Floodgate Ventures, Stanford University, Triplepoint Capital, and CRCM.

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According to WSJ, the company was close to securing over $50 million in equity funding prior to the pandemic lockdown. This was put on hold back in March, which ruined plans for the company to open around 20 new locations.

Still, Sandbox says its reached a deal with the company’s lenders to restructure debt and reopen its locations once things eventually get back to normal. Whether there will be a ‘normal’ in the short term still remains to be seen though. Many VR arcades, like Hologate have put in more visible cleaning and sanitizing regimes that they hope will ease the public back in, but it’s sure to be an uphill battle any way you slice it.

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Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 3,500 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • modejunky

    Well shit

  • Will we see a return to location based entertainment any time in the near future?

    Will sharing VR headsets be a thing ever again?

    To think this was mid February here in the UK, just weeks before the sh#t hit the fan…

  • To be honest, those companies like The Void were losing millions even before the pandemic, because of the very high fixed costs. They could continue their activity only thanks to the very generous funding. The pandemic has just killed them faster

  • Unless i missed something, arcades and laser-tag areas have been suffering for decades. This is like the two combined. How successful were they to begin with?

  • ender707

    This is good news, my wife and I did the Amber Sky experience in the bay area and planned to do the new Star Trek and some of their other experiences later before they closed for COVID. While we have home VR we like the VOID and Sandbox for going with friends/family that are not “gamers” but would have a great time at an event like this.