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By Ben Fritz 

As Silicon Valley giants battle each other to dominate virtual reality in the home, some in Hollywood are hoping to use the technology to get people out and about.

A new venture backed by three studios and director Steven Spielberg has raised $11 million as it aims to launch its first VR storefront at a Los Angeles mall this fall with plans for a wider rollout next year.

Dreamscape Immersive will feature original VR experiences and ones tied to major film franchises, said co-chairman Walter Parkes, a former DreamWorks motion picture chief and longtime producer.

The company's technology, developed by Swiss firm Artanim, allows multiple people to interact in a single virtual reality environment. It uses 16 cameras and sensors on as many as six users' hands and feet, making it more advanced than the home systems currently offered by companies such as Sony Corp. and Facebook Inc.'s Oculus.

"Studios and shopping centers have the same challenge, to create experiences that draw people in," Mr. Parkes said in an interview. "That overlap is where we saw an opportunity."

Dreamscape's investors include a trio of large media companies -- Time Warner Inc.'s Warner Bros, 21st Century Fox and Metro-Goldwyn-Mayer Inc. -- digital and large-screen exhibition company IMAX Corp., venture-capital firm Bold Capital Partners and mall chain Westfield Corp.

The company is already starting to raise additional money it will put toward a second round to fund its expansion beyond Los Angeles, said Chief Operating Officer Aaron Grosky.

Dreamscape's launch comes as IMAX has just opened its first out-of-home VR experience in Los Angeles, with plans for expansion. It is more similar to the experiences people can get at home, but could still be competitive with Dreamscape.

"We think it's wise to diversify our bets because there are going to be a lot of winners in this space," said IMAX CEO Richard Gelfond.

Studios have created relatively little VR content in-house thus far, choosing instead to invest in outside companies. Walt Disney Co. is backing the VR startup Jaunt Inc. and Warner previously invested in the augmented reality company Magic Leap Inc.

Dreamscape's chief executive is Bruce Vaughn, who worked at Disney for 23 years, most recently as chief creative officer of the Imagineering group that designs theme-park attractions.

"What's similar is we're creating shared experiences and transporting people to worlds that otherwise only exist in their imaginations," said Mr. Vaughn. "What's different is we're not building bricks and mortar and walls that you can't change your mind about."

The Dreamscape VR experiences are expected to last about 10 minutes each and cost a little over $1 million to produce. Tickets will cost $15 to $20.

Mr. Parkes, who is co-chairman along with veteran live events producer Kevin Wall, said the company may work with Hollywood directors to create original experiences. Others could be tied to a movie release or come in between big screen-installments to keep a franchise alive.

Mr. Spielberg, who is also backing Virtual Reality Co., a content producer, hasn't committed to designing a VR experience for Dreamscape, Mr. Parkes said.

The startup's retail locations will feature multiple "pods," where people can have a VR experience in which they interact with each other and physical objects. Eventually, Dreamscape hopes to move into adjacent businesses where it could use virtual reality such as military and medical training, communications and tourism, said Mr. Parkes.

Write to Ben Fritz at ben.fritz@wsj.com

(END) Dow Jones Newswires

February 13, 2017 16:40 ET (21:40 GMT)

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