The notion that virtual reality is going to be the next great storytelling medium has run into some bumps along the way. There’s still no real sense of what a great VR experience should actually be, and even less of an idea of how it can be turned into a viable business. Today, AMC Entertainment is announcing a partnership that will bring VR to its movie theaters starting in 2018, and its partner may be a key player in shaping what audiences will come to expect from virtual reality in the years to come.

That partner is Dreamscape Immersive, a Los Angeles-based startup that’s brought together Hollywood names like Steven Spielberg and producer Walter Parkes, all in the name of creating multi-person, room-scale VR stories and adventures. Under the deal, AMC will bring up to six of Dreamscape Immersive’s VR centers to both the United States and the UK over the next 18 months. Some of the centers will repurpose existing movie theaters, while others will be standalone installations. They will join Dreamscape’s flagship center, which is scheduled to open at the Westfield Century City Mall in Los Angeles in the first quarter of next year.

Location-based VR centers certainly aren’t a new idea. The Void has already set a standard for custom-built locations, and IMAX has begun rolling out its own VR arcades, utilizing more off-the-shelf games and experiences. Dreamscape aims to strike a kind of middle ground between the two, and an early demo I experienced recently in Los Angeles was impressive.

Dreamscape’s system utilizes motion-tracking technology developed by the Geneva, Switzerland-based foundation Artanim. The company’s work was shown off at the 2016 Sundance Film Festival. It utilizes a head-mounted display, small sensors worn on the hands and feet, and a backpack computer along with a suite of motion-tracking cameras. The end result is a full-bodied digital avatar that the player can see within the VR environment. But more importantly, it’s a multi-person system, with Dreamscape’s eventual VR “theaters” able to accommodate between two and six people in a given experience.

Physically interacting with another participant created a sense of true immersion

I tried the demo alongside Dreamscape CEO Bruce Vaughn, who most recently served as chief creative executive at Walt Disney Imagineering, where he oversaw the company’s theme park attractions and research initiatives. The demo took me through several different environments. They ranged from being stuck in the middle of a vast desert, to climbing through some Indiana Jones-style ruins, to flying through a Blade Runner-esque landscape while wind buffeted my face. The environments showed off an impressive sense of scale, but what sold the feeling of true immersion were those full-bodied avatars, and the tactile sensation of interacting with the environment and other participants.

Feeling sand crunch underfoot while in something like Alejandro González Iñárritu’s installation piece Carne y Arena is one thing, as is reaching out to touch a virtual railing only to have your hand find a physical counterpart. But in the Dreamscape demo, I slapped high fives with Vaughn’s avatar, and our hands actually touched. The latency in the system was so low we were able to toss a motion-tracked “torch” — nothing more than a piece of pipe — back and forth in VR with ease. Perhaps one of the most memorable moments was when the demo took me to home plate in a baseball stadium, where that same virtual torch transformed into a baseball bat. I whiffed on the first pitch; on the second I hit a home run. The only sensory inputs my brain actually received were the visuals and the sound of a sharp crack as my bat hit the ball, but my brain filled in the rest. I thought I could actually feel the ball make contact, so much so that I asked Vaughn and Dreamscape COO Aaron Grosky afterward what kind of haptics the prop had — only to discover there were none at all.

Using the physical to ground the virtual creates an incredibly compelling illusion, but rather than investing in elaborate physical mazes like The Void, or the modular set system Nomadic VR is creating, Dreamscape wants to offer flexibility with its VR locations. The plan is to just utilize open floor plans in its theaters, each offering 16 feet by 16 feet of walkable space surrounded by railing. The experiences, they say, will do the work of directing people away from touching things that aren’t there, all in the name of maintaining the illusion of immersion. While the demo I tried was relatively simple, the company’s installed theaters will include a suite of tactile options that can be deployed in various experiences, including a haptic floor and fans for wind, scents, and a host of motion-tracked props.

An encouraging demo and a partnership with a major theater chain are all well and good, but what will ultimately determine whether an initiative like Dreamscape Immersive takes off will be the experiences themselves. (AMC will be kicking in $10 million toward content creation as part of the partnership deal.) Dreamscape isn’t ready to announce any specific titles or content partnerships just yet, but the kinds of experiences this group could create has perhaps the most significant potential of all.

If any company represents Hollywood’s big bet on VR, it’s Dreamscape Immersive

The company has lined up a murderers’ row of talent that is unlike any other VR startup out there. Company co-chairman Walter Parkes has credits like Gladiator and Minority Report to his name, and he also helped create the studio DreamWorks SKG. Steven Spielberg was an early investor, alongside Warner Bros., 21st Century Fox, and MGM. Yves Behar is designing the look and feel of Dreamscape’s physical locations. Composer Hans Zimmer is serving as its music advisor, and as I left the company’s demo stage, director Gore Verbinski (The Ring, Pirates of the Caribbean) was off to one side working on some mystery project with a pair of collaborators. If any company represents traditional Hollywood’s big bet on VR, it’s Dreamscape Immersive.

But it’s the ways in which Vaughn and his partners characterize virtual reality as being different than cinema that are most encouraging. Given the AMC deal, Dreamscape does see tremendous opportunity in creating experiences that tie in to upcoming films or evergreen film properties, and looking at the slates of the studios involved does bring to mind a mind-boggling array of possible opportunities. But Vaughn is quick to point out that this is an entirely different medium, one that should be about exploring immersive environments rather than re-creating fan-favorite moments. It’s a detail that’s perhaps lost on many promotional VR tie-ins, but seems core to Dreamscape’s mission of creative experiences that could only exist in a virtual environment. “It’s something I learned at Disney: don't try to put people in scenes of the movie as if they're the actor,” Vaughn says. “What you really want is the fantasy that this world actually exists, and I want to step into that world and have my own experience.”