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Unleashing VR’s Potential: The Integrated VR Arcade

The Integrated VR Arcade

One of the biggest challenges facing VR in family entertainment centers is that operators treat these products like arcade games. They’re pricing them like arcade games, placing them on the floor like arcade games, and marketing them like arcade games.

The problem is that VR games are way more expensive than arcade games. And they provide a way better experience than arcade games. But I routinely see VR games scattered around the game floor, buried amongst games 10 or more years old. What kind of message does this send to customers?

There are two primary reasons this happened. In 2017, when VR became popular, operators saw it as a checkbox on their equipment shopping list. I can’t count the number of times I heard operators ask me, “I need a VR. What should I buy?” They started with one game, added another the following year, and suddenly had four, five or six games scattered on their floor.

The other reason is technical. Many early VR games used HTC VIVE headsets with Lighthouse tracking. These units often interfered with each other, so they needed to be spaced apart. With most new games leveraging headsets like the VIVE Focus 3 with inside-out tracking, this is no longer a problem.

Grouping all your VR games into one area will create a “VR arcade” inside your arcade. That opens all kinds of possibilities. You can market your VR arcade as an attraction, like bowling, laser tag, or miniature golf. VR fans will see all the VR, tell their friends, potentially increasing business. You can even theme the area to create cohesiveness. You can train dedicated VR staff to increase customer engagement and satisfaction. And most importantly, you can develop different pricing strategies for your VR games to increase pricing.

Most operators put their VR games on the arcade game play card. Some have priced their games at a premium, which runs the risk of early card value depletion and a pissed-off parent. Others are starting to reduce the price of the games to protect the overall value to customers, which stretches out the perceived ROI.

Virtual reality creates a premium experience and should demand a premium price. Bundling your VR games and attractions as an entitlement changes the financial game and opens upsell opportunities within your arcade, increasing per-cap spending. But we must talk about the elephant in the room—perceived return on investment (PROI).

I continuously see operators claim, and manufacturers and distributors supporting, the illusion that they get their money back on a game in XX weeks. They divide the purchase price of the game by the weekly cash box. If a game costs $10K and earns $1K weekly, they claim a 10-week ROI. But is perception reality?

Attributing ROI to a single game added to an arcade with 50, 100, or more games is nearly impossible. No way can you tell how much revenue is cannibalized from existing games. Multiple variable factors impact arcade revenue week to week. But if you bundle your VR games and create a different currency or entitlement, you can measure exactly how it affects overall spending.

The downside is that there might be less money in the cashbox for any VR game each week. But you’ll know that the money there is real, not virtual. This brings me to the next point about ROI.

Nobody expects laser tag to pay for itself in three months—or bowling lanes. But because VR is a video
game, operators expect them to have the same ROI as other arcade games. To further cloud things, some VR games even look like arcade cabinets.

Maximizing your return on investment in VR requires treating these games as the high-tech and high-impact attractions they are. Start experimenting with grouping your VR and working on pricing bundles. Your collection sheet will change, but your bottom line will likely improve.

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