VRcade: Be the First to Open One in Your Town

The article was originally published on Entrepreneur by Elena Titova. 

Virtual Reality (VR) is becoming more prevalent in our everyday lives. Companies are implementing VR in their training, warehouses and marketing -- as well as featuring VR headsets in commercials. These trends all push VR closer to being a ubiquitous factor in how we interact with content.

During 2016, mainstream venture capitalists invested a record $2.3 billion in virtual and augmented reality startups. According to technology advisers at Digi-Capital, $500 million of that amount came in the third quarter. That’s the ninth consecutive quarter of increased investment in the VR/AR sector.

Video games, entertainment centers and theme parks make up some of VR’s largest market segments. Based in part on growth in these areas, Grand View Research now forecasts the worldwide VR gaming market will reach $45 billion by 2025. The United States and China are the two largest geographic markets. In these and other nations, the proliferation of VR-centered arcades (commonly referred to as VRcades) has risen steadily and is expected to grow.

IMAX theaters announced last year that it would open six IMAX VR Centres before the end of 2017. It’s a natural fit: IMAX is known for widescreen cinematography that produces an image approximately 10 times larger than that from standard 35 mm film. The IMAX Experience Centre is introducing consumers to the realm and possibilities of VR.

It’s not the only big announcement. At January’s Consumer Electronics Show, Viveport President and HTC Senior Vice President Rikard Steiber unveiled HTC’s plans to open more than 5,000 VRcades. The company will start with 1,000 Viveland VRcades in China. Steiber compared this stage of VR’s development to the early days of the internet. Then, the world wide web gained millions of users through internet cafés, which remain popular in many countries.

The parallels create a massive opportunity for entrepreneurs looking to participate in the VR boom. Consumers are hungry to experience VR, but the current cost of home systems is prohibitive for many buyers. There's an undeniable shortage of places where people can experience VR. The IMAX Experience Centre at the Grove in Los Angeles reported more than 5,000 visitors after its opening.

One idea for entrepreneurs to consider: Open a VRcade. It might seem like a daunting task, but -- like any new venture -- it becomes more manageable if you break it down into a few key points.

The basic idea.

Rent a space, invest in VR platforms, and charge per experience. Make the space engaging and comfortable. Use different platforms to provide your customers with a variety of VR experiences. Oculus, HTC, Samsung Gear and Google Daydream are among the biggest manufacturers today. A VR Experience Showroom or VRcade is perfect for birthday parties, company team-building, date night and more.

A plan for success.

Deliver compelling content. The consumer wants to be engaged, and you want your clients to keep coming back. VR is social. Team-based games are an excellent way to involve your audience. Your aim is to deliver the correct content at the correct time to the correct audience.

Appeal to a wide range of demographics. Be sure to cover all the bases, from titles designed for mature gamers to those appropriate for family-friendly fun. “The Brookhaven Experience,” an interactive zombie-shooting thriller, is ideal for adults. Avatarico's latest, “Alice in Wonderland Stories: Crazy Clockwork,” is geared for children. An engaging VRcade has something for everyone.

Location. Remember: location, location, location. There’s a reason it’s the mantra of commercial real estate. Your VRcade must be easy to find, with ample parking and organic foot traffic. Look for a site close to other businesses that people frequent daily.  

Marketing. Capitalize on social media to promote your marketing efforts. Facebook Live, Instagram and SnapChat stories give you the ability to post all those hilarious videos and still images of people enjoying VR experiences. Those clips are nothing short of marketing gold.

Professional resources.

Opening a VRcade is a lot of work. Fortunately, established companies can ease you into the process.

Barcelona-based Avatarico has built a model to help budding VR entrepreneurs launch their own VRcades. To date, Avatarico has facilitated the launch of 64 VRcades worldwide, with an estimated average ROI of around six months. 

Avatarico owns the process from beginning to end -- including scene-writing, programming, selling and promotion. Creating team-oriented games with specific goals, memorable plots and puzzles is a great way to develop buzz around your VRcade.

Early adopters who seize this opportunity will be part of an industry that promises to be huge. Chances are you’ll be the only game in your town. Do the research, and you’ll create a memorable experience that keeps customers returning for more.

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