Throughout the previous couple of years, we've seen a plethora of news posts about how virtual reality was going to conserve the timeless arcade. The theory goes that the VR gear is too expensive for home users, therefore it creates an chance for operators to pony up the big dollars to purchase it and then make their money back by charging per match to play it.
"While many high-end headsets were released annually which can bring virtual-reality experiences to your living room, adoption of this technology is still in its first days to get a lot of reasons--it is still bulky, expensive, and there is not all that far to do once you've got it on your face. Over two million headsets were shipped worldwide in 2016, according to an estimate from market researcher Canalys, but this figure pales compared to the prevalence of, say, video game consoles (earnings of their leading one, Sony's PS4, topped six million during the 2016 holiday season alone). Consumer virtual reality will likely catch on as costs come down and headsets improve. In the meantime, however, a number of businesses are betting that customers could possibly be happy to pay a much smaller amount to try the tech with their friends at, say, an arcade, theme park, or even bowling alley."
It's tempting to dive into this snare, but in the operator's standpoint VR is a terrible deal. Operators are being requested to pay top dollar for technology that is all but guaranteed to plummet in value within the very short term. Other than buying a brand new car and driving it a time, I can not think about a way you could eliminate money faster between what you pay and what you will be able to get for it down the street.
Another limitation for most operators is that while you might have the ability to supply a space for VR individuals to roam around in today, as new VR technology is unveiled, we're going to find the point expanded from 100 square feet into the whole world. Instead of viewing just the games in your headset, you will see the real world with game play overlayed. Since the technology allows more actual world places to be researched, it's going to earn a cramped arcade look fairly feeble in comparison.
VR is heading for mass market acceptance, however it is demand isn't being pushed by gamers who want to pay big buck to play with video games, but such as the BETAMAX that came before it, by individuals who want to watch pornography in their houses.
Even if an operator can make a bit of money for the next few decades, after VR achieves critical mass, then it is going to crush whatever revenue stream that operators're dreaming of. Do not believe me? Just check out what's going on in China.
A year after 22,000 of these have closed.
That is an unbelievable failure rate over this brief period of time and one which should serve as a sharp warning to anyone contemplating investing in the VR games. Perhaps Dave and Busters can afford to take losses over the matches more than Chinese startup arcades, but I doubt that most North American operators are going to fare far better using the tech in their game rooms and will just wind up in debt at the end of the day.
The issue essentially boils down to consumers not being willing to pay a premium for indoor playground equipment the encounter. Tech In Asia, describes the issue perfectly in their article, on that the Chinese VR boom and bust.
"Enterprising store owners jumped into VR are finding it impossible to charge fees akin to cinemas or bowling alleys to get a VR experience. One VR arcade owner told iHeima that he saw excited queues when charging US$1.50 for a 30-minute session, but everyone vanished when it climbed to US$5. By that sort of revenue it's not possible to cover the lease."
Even if the match was sold out all day, at $1.50 per half hour they're just earning $30 per day.
The actual world data streaming in from China must serve as a canary in the quarter plantations of North America. Operators who invest large amounts of money on elaborate VR setups will soon find their little VR rooms being replaced by the whole world for a stage. Since the installations get cheaper, smaller and more portable, the digital arcades will seem more expensive, bulky and limited. I'd like to be proven wrong on this one, but I think the arcade VR fad is more hype than hope.