As the playground games and LP’s played by Generation X merged into the video games and arcades enjoyed by millennials, so too is VR set to become the next craze for the up-and-coming generations. With unlimited potential and solid backing from companies like Facebook, Google and Apple, both AR and VR will be the cornerstone of entertainment in the coming few decades.
This leaves you with some choices to make…
Whether you’re a location-based VR (LBVR) provider or you’re an entrepreneur in one of the many industries that VR is set to disrupt, there are both threats and opportunities. Taking advantage of the opportunities before mass-market adoption can make a huge difference to the position you’re in in a few years’ time.
LBVR is expected to grow into a 12.3 billion dollar industry by 2027 according to TMR. This would mean a substantial growth rate, which makes now the perfect time to get your foot in the door.
Types of LBVR
There are multiple types of LBVR to choose from, each with its own advantages and disadvantages. Considering which type of LBVR you should leverage for your business is the first step to choosing an LBVR product!
- Free-roam LBVR/Warehouse-scale free-roam VR
Free-roam LBVR games do a great job of transporting the player into a game, both physically and mentally. It involves lots of trackers that make it possible for the player to experience the game with their entire body.
One of the first companies to provide a warehouse-scale VR solution was Zero Latency, which mostly comprises shooting games for eight players per 200 square meter area.
Even though these games are immersive since you’re it involves whole body, it requires a lot of space to set up. The whole reason we call these games warehouse-scale VR is because of the space it takes up.
Setting up a warehouse-scale VR business will set you back over half a million dollars. This is one of the reasons why not many entrepreneurs go that route.
Room-scale VR is somewhat the same, but a lot more space-efficient. One of the main downsides that comes with room-scale VR is that it requires a lot more staff monitoring due to the hazard of people tripping up over each other or running into obstacles.
If you’re considering a room-scale VR solution, then there are a few good options.
The first is Hologate, which provides shooting games with a capacity of 4 players in an area of 270 square feet. The investment to set it up would be around the $95k mark.
A second option you have is Virtual room, which makes VR escape games for 4 players too. This option is significantly less-expensive to set up, at roughly $40k.
A third good option is Avatarico which offers a VR escape game for 6 players for a 370 sq.ft area. The startup cost is around €22k, making it one of the most accessible options in this segment.
There are also companies that offer revenue-share/pay-per-play options. Exit VR, Ubisoft and many others are included in this list.
Pay-per-play solutions give a superb opportunity for entrepreneurs to test the waters without having to make a considerable investment up-front. At the same time a one-time purchase allows you to save on costs and get pure profit after the payback period.
- Hyper reality
If you’re looking to provide your customers with the most immersive experience possible, nothing beats hyper-reality VR games. Hyper-reality VR games merge the virtual world and real world together to create an experience that looks and feels as realistic as possible.
The physical elements that come with hyper-reality VR games make the experience just like the real thing. For any wall you touch or gun you pick up in the game, you do the same thing with your body, promoting a total immersion into the game.
Even though these VR games create such phenomenal experiences, they’re far more expensive to set up compared to the other forms of VR games. Expect to shell out millions of dollars to have a hyper-reality VR game created.
Ken Bretschneider, CEO of The Void, invested $13 million of his own money to have his hyper-reality VR game created. This game requires about 1000 square feet of space, making it one of the least space-efficient VR games around.
Sandbox VR is a hyper-reality VR game that’s way more space-efficient. However, franchise costs seem to be around $700.000 and there’s a waiting list which goes to show the demand there is from other entrepreneurs for hyper-reality VR games.
If you’re dead-set on getting a hyper-reality VR game set up for your business, then there are two other options:
– Have one developed yourself
Development costs for a hyper-reality VR game will be over $200.000, and can rise quickly depending on how complex you’d like the game to be. There are various companies like Tick Tock Unlock that are a great example of this.
– Ready-made solution
Companies like Entermission provide VR escape games with special effects like wind and scent. Costs for a ready-made solution like this are around $90k, but they are somewhat limited compared to the full-blown hyper-reality games like the one mentioned from The Void.
- Seated VR
Last but certainly not least is seated VR. Even though the experience is somewhat limited when it comes to your range of motion, this same limiting factor is what makes it so appealing to both business owners and customers alike.
Passive experiences are popular, and when you look at the figures of the number of people the go to theme parks and movies, they far surpass games like paintball and other more active games.
VR pods with 7D movies and VR simulators make for great experiences without all the hassle that many other VR solutions come with. It also makes it easier for game developers to create games which helps improve diversity.
One of the main drawbacks of seated VR is that it’s often focused on just two players. Per simulator or pod, you’re often looking at an investment of about $8k which adds up when you want to create a VR arcade for example.
With the most space-efficient option, you can fit 6 players in 270 square feet. In Europe and Asia, Avatarico is one of the best-known providers of such seated VR escape games. The start-up costs are only about €22k too which makes it very cost-effective.
In the US, Canada, Mexico and Australia, Entermission is a great option.
- VR development
Developing your own VR game is challenging, especially if you’re more of a business owner than a developer. In this case, it may be better to outsource the work to ensure a high standard is maintained and to save you time putting together a team for it.
To develop a VR game, expect to pay at least €250 000 — €450 000. It will also take a good six to eight months before you have a finished game you can use.
Considering this option makes sense if you can sell your game to many locations.
This is only advised if you will be selling the game on, and isn’t ideal for solely your own business unless you have multiple locations, or have a large customer-base already.
Choosing an LBVR product
When choosing an LBVR product, there are a few important things to consider. This is what we’re going to get into next.
- Your audience
Thinking about your target audience is vital to the success of a project like this.
- If your target audience is males between the ages of 25 and 35, then warehouse-scale shooter VR games are the way forwards.
- For teenagers, a VR arcade can be a great solution. Unless you serve a very wide audience, it can help to target a specific niche to set yourself apart.
- For a broader audience, escape games like real-life escape rooms and VR escape games are great.
- Group sizes
Where arcade games are great for solo-players and couples, it’s difficult to get larger groups on board. Escape games and shooting games are far more suitable for larger groups, and these are also better for longer sessions, often taking up an hour or more of a player’s time.
When working with groups, it’s important that the games you provide them with involve teamwork, or at the very least allows for some interactivity between players.
- Size restrictions
The total size you have as well as how efficient the games are will impact your bottom line and the maximum number of people you can cater to at one given time.
Both Avatarico and Entermission provide space-efficient solutions that require only 270 square feet for 6 players. There are other companies that offer solutions for 4 players in 375 square feet of space.
Here is a comparison of the different options in terms of capacity.
|seated VR escape game||4||24|
|room-scale free-roam VR game||3||18|
|warehouse-scale free-roam VR game||1||8|
* Total space is 100 sq. m
- How space-efficient it is
One of the main reasons Sandbox VR received such strong backing from investors is because of how easy the business is to scale. Equipment costs are low and so is the space that it takes up. This makes expanding into new locations very easy.
You can use revenue per square meter to assess your space efficiency. Below is an example:
|Space||# of players||Monthly revenue*|
|seated VR escape game||25 sq. m||6||€432 per sq.m|
|room-scale free-roam VR game||35 sq.m||4||€205 per sq.m|
|warehouse-scale free-roam VR game||100 sq. m||8||€144 per sq.m|
* Based on 90 sessions per month & €20 per player
Since most of your clients will be new, or at least fairly new to VR games, it’s important that the onboarding process is as easy as possible.
Hand tracking games, like Avatarico and Entermission have the most intuitive controls. Since you use your hands, there’s no need to learn any controls, and it’s very easy for newcomers to get started.
- The experience
It’s a fantastic feeling when you try something new, and this is the exact feeling your customers should walk away with after using VR.
The games should offer you the opportunity to experience things you’ve never done before. For example, games offered by Avatarico allow you to fly in zero gravity and shoot fireballs as if you were doing it in real life.
- Guiding players
There’s only one thing worse than clients getting stuck, and that’s when the game operator doesn’t know how to help them.
It’s important to check what features and extra service VR game providers offer to ensure that there’s a game operator that can guide players when necessary.
- Unique content & content exclusivity
By securing deals that provide you with exclusivity to a region within your country, you can be sure that no other VR arcade in your area will have the same games. This enables you to set yourself apart from the other providers.
- Extra support
Any company can create a game and sell it, but when your provider offers marketing support and tech support, you’ll be in a much better position for your business to thrive.
Look for success stories they’ve had with their other partners, the number of games they have and the reviews. How long a company has been active in the VR market and what their general reputation is are also important things to keep an eye on.
Choosing an LBVR product is an important decision, and one that could shape your business for quite some time to come. There’s no better time to get into VR/AR than now, and the skills you learn will be beneficial in a range of different industries in the future. By keeping an eye on the points listed in this article, you should be able to make a decision that will benefit your business in the long run.
Anton Zaitsev, Avatarico CEO, AR / VR developer. His company was the first to develop a VR escape game for location-based entertainment. He has been dealing with VR technology for more than 6 years. He likes to share his experience in that sphere providing some useful tips for VR business success. He is always ready to help with any questions related to VR technology. You can contact him at firstname.lastname@example.org.