I was a penny-stock broker in the Wolf of Wall Street days in the mid-1980s. Many of my clients were invested in a company called Worlds of Wonder. They had back-to-back Christmas toy hits in Teddy Ruxpin, the first robotic teddy bear, and Laser Tag, the first consumer laser tag game. On April 7, 1987, a sheriff’s deputy in Rancho Cucamonga, California, shot and killed a 19-year-old playing Laser Tag with his friends in a schoolyard, mistaking them for real guns. My clients lost much money that day.

I played my first game of laser tag that same year. A client in Texas had invested in a blind pool (the ‘80s version of a SPAC). Instead of merging with a private company as was their mandate, management wanted to invest the money into building a laser tag system. It was an unusual use of proceeds, and he asked me to check it out since I was in Colorado.

The founder of the shell company invited me to a strip mall in downtown Boulder. He told me to wear jeans and a black shirt. I pulled into the parking lot, and nested between a gay club, and a sushi bar was Lazer Zone.

We strapped on a battery belt, put a headband containing solar cells glued onto the inner workings of a hardhat, and grabbed what looked like an automotive timing light. We entered the blacklight and fog-shrouded arena, all dark except for fluorescent tape edging large cardboard barriers to hide behind. The game’s object was to tag the other player with your light beam, which would trigger the solar cells to shut down the other player’s “laser” gun.

Half an hour later, I was sweating, my jeans were torn at both knees, and I wore a smile a mile wide. I was all in.

I agreed to write their business plan and spent the next six months at the Denver Public Library combing through magazine articles, research reports, and science fiction books. They built a prototype and opened their first location, LaserQuest, on Colorado Boulevard in Denver. (ED: there was no relationship to the Laser Quest that began in the same year in Manchester, England, and expanded to the US in 1993.)

The company’s board abandoned the project in 1989, shutting down the retail location. My partner then, Ed Bonis, and I raised the capital to buy the prototype system and set out to find a new location.

There was a large indoor entertainment mall in Littleton, Colorado, called FunPlex. Founded by long-time skating rink operator Bob Chado, FunPlex was 144,000 square feet of indoor play space for kids of all ages. It was the prototype for the modern FEC. It featured 40 AMF bowling lanes, a vast skating rink with a massive sound and lighting system, 36 holes of indoor miniature golf, more than 200 arcade games, three restaurants, and Bankshot Basketball.

Bankshot was located on a mezzanine level overlooking the arcade. It was like mini-golf with basketball. It featured about a dozen basketball hoops, each with an angled backboard. The object was to bank the basketball off the multiple backboard surfaces. Whoever completed the course with the fewest shots was the winner. Chado was underwhelmed with the performance of the attraction and offered to let us install our laser tag system there as a concession.

FunPlex did the marketing, including birthday party bookings, and we paid a percentage of our revenue. We gladly took him up on it. On our first weekend, we had 20 birthday parties. It was a disaster. The lead acid batteries couldn’t keep up with the demand. We couldn’t recharge them fast enough, and the parties started backing up. This was when I learned a hard truth: hell hath no fury like a party mom scorned. I’ve never felt so abused and stressed out in my life.

Despite the customer service fiasco, Chado saw the potential of laser tag. He was generous enough to loan us $900 to buy more batteries. We held that system together with duct tape, crazy glue, and bad soldering for over a year.

While Ed was handling the store one slow weeknight, a well-dressed businessman came in to play. He handed Ed his business card. It said:

Andrew E. Newman
Chairman of the Board
Edison Brothers Stores

He proudly showed off his Photon membership card. Photon was the original laser tag game from the mid-1980s. It was played in giant spaces that are more like the laser tag arenas of today but with equipment too heavy for kids to use. It failed under the weight of its equipment and business model. Andy loved laser tag and wanted to buy our system to install in a new entertainment mall concept they were working on.

Malls were dying in the ‘90s (sound familiar?), and they wanted “anchor entertainment centers” to attract a younger, hipper audience. Edison Brothers were the largest mall retailer in the US. They’d been in business since 1922 and were a New York Stock Exchange-listed company. They saw an opportunity to leverage their retail expertise and real estate relationships to add entertainment to their portfolio of brands.

Edison Brothers became our first customer. They agreed to buy equipment for 10 locations, which we branded Laser Storm. It gave us sufficient capital to eventually design something that was manufacturable, serviceable and would make birthday moms happy.

In 1991 we prepared to unveil Laser Storm to the amusement trade at the annual IAAPA show in Orlando. Andy called me up and asked for a favor. They had acquired the exclusive rights to a new amusement product that would change the world. “All the trade show space is sold out. Could we stage our product in a small portion of your booth?” Color me intrigued. How could I say anything but “Of course!” they WERE our only customer then. And they promised a barrage of press.

That product was Virtuality from W Industries in the UK. Virtuality was the first virtual reality entertainment system. It blew people away. Press from over 100 outlets and 20 countries lined up for demonstrations.

Over the next few years, Edison Brothers installed Laser Storm and Virtuality VR systems in malls across America. At the first location’s grand opening at Navy Pier in Chicago, I pondered when we might see VR and laser tag combine. Wouldn’t that be something?

Fast forward to IAAPA 2015. The hype around virtual reality had come and gone and was coming again. I attended the show to research an article warning operators not to believe the hype. VR was and always will be a fad.

Then I heard some buzz about a startup out of Australia called Zero Latency. I decided to check it out. They were fully booked, but I begged them for a demo slot for me and my friend Brent Bushnell, co-founder of Two Bit Circus and son of industry icon Nolan Bushnell, with whom I was planning to walk the show floor on Thursday. I managed to convince them they should let us try it.

On that fateful day, we entered their enclosed booth, strapped on an Oculus DK1, a backpack
computer, and were handed a large plastic rifle. Next thing I know, bee-like alien things are attacking me from everywhere. I was roaming around the play space and experiencing an unknown world as if I had traveled through space. I approached a narrow path of rocks and peered over the ledge, viewing a lava lake below me. I froze in my tracks.

I told myself I was at a trade show on a concrete floor, and this was just an illusion. But I could barely get my legs to follow my commands. It was one of the most incredible gaming experiences I’d ever had. And it took me back to my first time playing laser tag. But without the ripped jeans.

I removed the gear, stepped outside, and asked for the owner. Tim Ruse walked up to me and gently held out his hand. I put my arms around him, gave him a giant bear hug, and exclaimed, “Dude! You’ve done it!” It had been over 20 years since I mused about merging laser tag and virtual reality. Zero Latency gave me my first taste of that possibility.

Tim told me they were running this system in a 4000 square foot warehouse in Melbourne, Australia. They were fully booked, selling a 43-minute game for AU$88 per person. I told him I needed to see it and would fly down immediately. He asked me to wait until April as they were evolving their tech and would have their product system installed by then.

True to their word, I showed up in April 2016, and they’d installed a new, proprietary tracking system using machine vision cameras that let them track many players in a massive space with high accuracy. I strapped on the equipment, and over the next 43 minutes, I battled zombies from the streets through to the roof office building, where I walked between two skyscrapers on a rickety plank with wind buffeting me, and I eventually escaped on military transport.

I “roamed” nearly a half mile during that adventure. The further I walked, the deeper the immersion became. Eventually, I was enveloped in the zombie apocalypse. In the end, I was exhausted, both physically and mentally. And I was energized.

I convinced Tim and his team that I had made most of the mistakes they would make over the next couple of years as they launched their fledgling business. They let me guide them from go-to-market strategy to their official launch at IAAPA the following year and help them gain traction in North America and Europe.

While Zero Latency was building its warehouse-scale VR system in Australia, another startup in Utah took an entirely different approach. Where Zero Latency was tracking huge wide-open spaces, The VOID was building smaller “stages” with props, walls, and doors that players could interact with. In a licensing deal with Sony Pictures, they developed Ghostbusters: Dimension and opened at Madame Tussaud’s in Times Square.

Zero Latency was an epic 43-minute deep dive into a zombie apocalypse. Ghostbusters: Dimension was a story-driven experience where players navigated small, intimate spaces chasing ghosts and ultimately battling the Stay-Puft Marshmallow Man. The VOID employed haptic vests that vibrated when a spirit slimed you, moving floors, and even the scent of roasted marshmallows if you succeeded in your mission. When a door appeared, you could reach out and grab the doorknob (the tracking wasn’t perfect, but after some fumbling, you’d find it), and there was a chair you could sit on.

The VOID’s approach was technically more challenging, driving their capital expenditures and operating costs beyond profitability. They also deployed a location strategy of seeking out high-traffic real estate. For example, at their Westfield London location, 70% of their customers had never visited the mall before. So they were paying for traffic they weren’t converting.

The VOID closed under cover of the pandemic, but its business model was flawed from day one. Zero Latency continues to expand today, with more than 60 sites opened worldwide. What’s the difference?

Zero Latency has committed to increasingly simplifying its business. As technology has enabled them, they’ve moved away from complex camera-based tracking systems with backpack computers and customer headsets. Today they use the HTC VIVE Focus 3 with Wi-Fi 6E streaming. Where many companies seem to hold onto their old tech beyond its expiration date, they’re on their third-generation platform in only six years.

This is important for operators looking into the more expensive free-roam VR solutions. It’s important to buy on the upswing of a new technology cycle. You don’t want to over-invest in something that will be obsolete in a year. And with VR technology innovation expanding rapidly, it’s easy to do. If the vendor you’re considering is selling tech that is more than a year old, it’s critical to learn about their product roadmap and negotiate an upgrade program that keeps you up to date.

Less Room to Roam

The two pioneers of free-roam VR took different paths to create deep immersion. The VOID coined the term “Hyper Reality” to describe their version where physical elements in the space are mapped to the virtual environment. When you see a door, you can reach for the doorknob and open it; if you see a chair, you can sit on it.

Zero Latency used warehouse-scale to describe the vast spaces their system occupies. Their thesis is that the greater distance you travel physically, the more the fantasy/ reality lines blur and the deeper the immersion goes.

Others have copied both these types of experiences. Zero Latency is still the gold standard warehouse-scale platform, but companies like Anvio, TrueVR, and EVA offer large-scale free-roam solutions. And while The VOID is gone (for now – there are rumors they’re coming back), companies like VEX, Hologate, and others have implemented vibrating floors, wind, heat, and smell into their experiences.

In the last year, a third market segment has emerged. These compact free-roam systems are optimized for smaller spaces, from 600 to 1000 square feet. They are optimized for four, six or eight players. They’re inexpensive to install, simple to operate, and have lower ticket prices for customers.

The leader in this space is Hero Zone VR, with over 180 locations (see the story Can VR Be Social on page 46 for more). Phenomena VR Esports Arena is the number two company with about 60 sites. There are lots of smaller players in this market too.

Both Hero Zone and Phenomena run “native” VR experiences. The entire game lives on the headset, using the onboard Qualcomm VR2 chipset to render the graphics. Native systems are much simpler for the operator but don’t offer the high visual resolution and graphic fidelity that games running on a PC do.

Vertigo Games’ HAZE system offers compact free-roam games like Arizona Sunshine and the new After the Fall, streamed over Wi-Fi 6E to the VIVE Focus 3. (Springboard is sunsetting the HAZE name and integrating their free-roam titles into their Springboard VR game launcher.)

Compact free-roam offers a reasonable compromise for companies that don’t want to invest six figures into a VR attraction.

Smaller space, easier to operate, and significantly less investment in return for lower graphic fidelity and less immersion. John Lilly, who owns six Zero Latency locations under the MeetspaceVR brand in the UK, also runs Hero Zone in all of them. It increases his operation’s game variety and capacity with only a small incremental investment and space.

Free-roam is the future of VR for location-based entertainment. Room-scale games are too easy to replicate at home, and fewer developers are building single-player games for arcades as the home market becomes more lucrative. Free-roam games from indie developers are proliferating, and platforms like Hero Zone and Springboard make them easy to operate.

If you’re in the VR arcade industry, it’s time to roam free or die.

In Memoriam: Bob Chado

While writing this guide, I learned that Bob Chado passed away in Denver at the ripe old age of 95.

Bob was a skating rink proprietor who envisioned a mall filled with entertainment. FunPlex was born from his imagination. It was the prototype of the modern family entertainment center. He had a wonderful smile and a sense of humor to go with it. Bob played a significant role in my life and career. He was a mentor before I knew what that meant. He took me under his wing and helped Laser Storm get off the ground. I’m unsure we would have made it without his support, generosity, and guidance.

I will always remember him with gratitude and fondness.