Cracking The VR Games Secret

Over the previous few years, we've seen an array of news posts about how virtual reality was going to conserve the classic arcade. The idea goes that the VR indoor jungle gym equipment is too expensive for home users, so it creates an opportunity for operators to pony up the big dollars to buy it and then make their money back by charging per game to play it. In the MIT Technology Review.
"While many high-end headsets were released annually that may bring virtual-reality experiences to your living room, adoption of this technology is still in its earliest days for a bunch of reasons--it is still bulky, pricey, and there isn't all that much to do as soon as you've got it on your face. Over two million headsets were shipped worldwide in 2016, according to a quote from market researcher Canalys, yet this figure pales compared to the popularity of, say, video game consoles (sales of their top one, Sony's PS4, topped six million during the 2016 holiday season alone). Consumer virtual reality will probably catch on as costs come down and headsets improve. Meanwhile, however, a number of companies are betting that consumers could possibly be happy to pay a much smaller amount to try out the tech with their friends at, say, an arcade, theme park, or even bowling alley."
It is tempting to fall into this trap, but from an operator's perspective VR is a terrible thing. Operators are being asked to pay top dollar for technology that's all but guaranteed to plummet in value over the very short term. Aside from purchasing a brand new car and driving it a mile, I can not think of a way you could eliminate money faster between what you pay and what you'll be able to get down the street.
Another limit for most operators is that while you may have the ability to provide a space for VR individuals to roam around in today, as fresh VR tech is introduced, we are likely to see the stage expanded from 100 square feet into the entire world. Instead of viewing just the matches from your headset, you will see the true world with sport play overlayed. Kids can visit the park and relive the knights of the round table or parking garages to take aliens. As the technology allows more actual world places to be researched, it is going to make a cramped arcade look fairly feeble in comparison.
VR is heading for mass market acceptance, however it's demand isn't being driven by players who wish to pay big buck to play with video games, but like the BETAMAX that came before it, by individuals who want to watch porn in their homes.
Even when an operator can create just a bit of money to the next few decades, after VR achieves critical mass, then it is going to crush whatever earnings flow that operators are dreaming of. Do not believe me? Just check out what is happening in China.
A year after 22,000 of them have closed.
This is an unbelievable failure rate over such a short time period and one that should function as a sharp warning to anyone considering investing in the VR games. Maybe Dave and Busters is able to take losses over the matches more than Chinese startup arcades, however I doubt that most North American operators will fare far better using the technology in their game rooms and will only end up in debt at the end of the day.
The issue basically boils down to consumers not being prepared to pay a premium for the encounter. Tech In Asia, clarifies the problem perfectly in their own article, on that the Chinese VR boom and bust.

"Enterprising shop owners jumped into VR are finding it impossible to charge fees comparable to cinemas or bowling alleys to get a VR experience. One VR arcade proprietor told iHeima he saw eager queues when charging US$1.50 for a 30-minute session, but everybody vanished when it climbed to US$5. From that kind of revenue it's not possible to pay the lease."
Even if the match was sold out daily, at $1.50 a half hour they are just earning $30 a day. Together with retail rents in North America running $1 -- $2 a square foot, there is no way to make the math work, even in the event that you suppose that Americans will pay more to play with the matches.
The actual world data flowing in from China must function as a canary in the quarter mines of North America. Operators who spend considerable amounts of money on elaborate VR setups will soon find their little VR rooms being replaced by the whole world for a stage. As the setups get cheaper, smaller and more mobile, the digital arcades will seem more expensive, bulky and limited. I would like to be proven wrong on this one, but I think the arcade VR fad is more hype than hope.