Find Out Who's Talking About VR Games And Why You Should Be Concerned

Throughout the last couple of years, we have seen an array of news articles about the way virtual reality was going to conserve the timeless arcade. The idea goes that the VR gear is too expensive for home users, so it creates an opportunity for operators to pony up the big bucks to buy it and then make their money back by charging per match to play it. From the MIT Technology Review.
"While many high-end cans were released last year that may bring virtual-reality experiences to your living space, adoption of this technology remains in its earliest days for a bunch of reasons--it's still bulky, expensive, and there is not all that much to do once you've got it on your face. More than two million headsets were sent worldwide in 2016, according to a quote from market researcher Canalys, but this figure pales compared to the popularity of, say, video game consoles (sales of their top one, Sony's PS4, topped six million throughout the 2016 holiday season ). Consumer virtual reality will probably catch on as costs come down and cans improve. In the meantime, though, a number of businesses are betting that customers may be pleased to cover a much smaller amount to try the tech with their buddies at, say, an kids arcade games, theme park, or even bowling alley."
It's tempting to dive into this trap, but from an operator's standpoint VR is a terrible deal. 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 buying a brand new vehicle and driving it a mile, I can't think of a way you could lose money quicker between what you pay and what you will have the ability to get down the street.
Another limitation for most operators is that while you may have the ability to supply a room for VR people to roam around in now, as fresh VR technology is introduced, we are going to find the point expanded from 100 square feet to the whole world. Instead of viewing just the games from your headset, you will realize the real world with sport play overlayed. Children can visit the park and relive the knights of the round table or parking garages to take aliens. As the tech allows more actual world places to be researched, it is going to earn a cramped arcade look fairly lame in comparison.
VR is already heading for mass market acceptance, however it's demand is not being pushed by gamers 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 if an operator can make a little bit of money to the next few years, once VR achieves critical mass, then it is going to crush whatever revenue stream that operators are dreaming of. Don't believe me? Just check out what's going on in China.
A year after 22,000 of these have closed.
This is an incredible failure rate over this brief time period and one which should serve as a sharp warning to anyone contemplating investing in the VR games. Maybe Dave and Busters can afford to take losses on the games longer than Chinese startup arcades, however I doubt most North American operators will fare far better using the technology in their game rooms and will just end up in debt in the end of the day.
The issue essentially boils down to consumers not being prepared to pay a premium to the encounter. Tech In Asia, clarifies the problem perfectly in their article, on that the Chinese VR boom and bust.

"Enterprising shop owners leaping into VR are finding it impossible to bill fees akin to cinemas or bowling alleys to get a VR experience. One VR arcade owner told iHeima he saw excited queues when charging US$1.50 for a 30-minute session, but everyone disappeared when it rose to US$5. By that kind of revenue it's not possible to cover the rent."
Even if the match was sold out all day, at $1.50 a half hour they're just earning $30 a day. With retail rents in North America running $1 -- $2 a square foot, there is no way to make the math work, even if you assume that Americans will spend more to play with the matches.
The actual world information flowing in from China should serve as a canary in the quarter mines of North America. Operators who invest considerable amounts of money on fancy VR setups will probably find their small VR rooms being substituted by the whole world as a stage. As the installations get cheaper, smaller and more portable, the digital arcades will seem more expensive, bulky and restricted.