VR business partnership: Dos and Don’ts

This article was originally published by Anton Zaitsev at Affinity VR

It’s hard to deny the fast-growing popularity of virtual reality technology. More and more people use it both in the habitual and specific spheres of their lives (industry, medicine, aviation, etc,). Such a wide field of application makes VR a highly multifunctional achievement of science and technology. Obviously, mass adoption is on its way, that’s why it won’t be surprising to see the VR boom hit a wall in at least ten years. 

At the same, LB VR is relevant as ever. The first wave of VR was represented by experiences within customers’ homes in a community space. And the next wave (which is LB VR) really has enormous potential and value, furthermore, it seems to be just the beginning of something bigger to come up.

2018 was the year when virtual reality reached a certain point of crisis. Home use headsets didn’t quite pay off for a lot of the developers, though there were some good and successful projects like Beat Saber. 

However, every cloud has its silver lining – no dumb money was invested further. The virtual reality market became steady due to the usage of VR training in the enterprise segment and LB VR arcades in the sphere of entertainment.

Thanks to the location-based entertainment market many VR game developers have been having their key source of money in the last few years. Before that Unity CEO John Riccitiello mentioned that developers need to find a way to survive, and in this case, home use would be a failure. 

Oculus Quest hopes to present more casual VR, but LBE is all about what almost all of us want – to go out and have fun with friends.

This year Andreessen Horowitz decided to invest $65 million in SandboxVR. Thus it may change the whole business situation, for it’s the first great investment in virtual reality for a while, which may also emphasize the rebirth of LBE VR. 

Without a doubt, today is the best time to put your investments in location-based VR. The question is: how you could do it right?

The choice of a business model

Different issues may be taken into account while choosing a certain business model. It can be the questions of the space needed, content provided, or the technology used. 

Here we offer you to consider the following variants:

VR Arcades

If you’ve never heard of VR arcades before, let’s start with a definition. A VR arcade is a space where anyone can become closer to the understanding of the value of VR and AR gaming and, of course, experience it. In other words, it’s sort of a cyber-café, only with VR.

VR arcade involves games and experiences which are available for the usage at home, thus there is a lot of single-player content and a few multiplayer experiences with no precise duration. 

Also, VR arcades presume you’ve played games before, which leads to the conclusion that they aren’t suitable for corporate events or family holidays. 

The examples of the companies which use VR arcades in their business are Emergent VR EncounterYokey PokeyVirtualities

Free-roam VR 

Free-roam VR or warehouse-scale VR needs a lot of space. It requires an arena of 100-to-200 square meters. Plus, there’s a need to provide multiple players with certain equipment (including backpacks and guns). 

The games are of quite high quality being LBE-exclusive and designed to be played by groups. Usually, the plot centers around such games as zombie shootings (like Zero Latency’s Zombie Outbreak), but other types do exist as well (Sandbox VR with its pirate adventure). 

In terms of profitability, LBE wins since it has a high indicator of space efficiency (comparing the revenue per square meter).

VR Escape Games

VR escapes don’t require much space. They allow up to 6-8 players to participate in a game simultaneously. Practically anyone can navigate inside these VR experiences. 

For instance, Avatarico is the creator of VR escapes which require only 25-30 sq m (or 270-to-320 sq ft). 

The aim is to adapt the games for cooperative and easy usage, so it will be satisfying for both family and corporate events. 

Ubisoft company recently stepped in the market bringing visually remarkable titles, although potentially more PC audience-oriented gaming.

While choosing a suitable business model, you are to think through the following points:

1) Target audience

The audience you consider mass is nothing like a niche one. And when you decide what games to provide to general audiences, you`d better leverage the ones that are easy to play, filled with intriguing actions and familiar themes.

In 2014, we launched a real-life (not VR) escape game chain with approximately 10 games of various genres. The first room was a kind of cyberpunk style. We`ve chosen our target audience to be geeks, who just love tech and difficult puzzles. However, everything changed with the opening of our second escape room. There we deployed a fairy tale setting. Surprisingly, bookings grew drastically. More people wanted to come and play. These things made us realize that no one interested in puzzles but action-packed games with a low barrier for entry – to let people immerse themselves in a fantasy world.

Best choice: VR escape while others tend to be more geek-like.

2) LBE VR as a perfect match for event management

Managing to operate a real-life escape business, we quite soon started to get requests for birthdays, corporate events and parties. That’s how we learned these are the crucial factors of our growth and development. Besides, it helped us to find our model suitable for the entertainment sphere. Our events are scheduled making us closer to a stadium than an arcade.

Best choice: any of them can go as the best business model; however, VR escape rooms and free-roam are commonly better for the management of different events, since the content is adaptable.

3) LB VR space-efficiency

Your top financial priority as an entertainment facility is to raise revenue per square feet. In terms of profitability, LBE wins since one experience allows up to 6-8 players to enter. Also, mind its space efficiency (the revenue per sq ft).

Best choice: VR escapes and arcades.

4) Games and rooms needed

It isn’t easy to thrive with only one opened room. Starting your business, try to get two rooms as a minimum. This will give you a chance to raise the flexibility (which means you can offer more experience to your customers) and also make the bookings grow.

If you have an opportunity to open three rooms with three games at once – go for it!

Best choice: VR escapes and arcades are the winners – they allow you to have 4 rooms with VR escape games or just one room for free-roam VR – all in the same space.

5) Capacity

One of the important questions that you should ask yourself is how many players you plan to accommodate. 

Well, when we opened our place, the traditional escape room in our city contained 2-4 players. Then it turned up to 6. But it didn’t help much – we opened a room for 10 players and found ourselves on top.

You may think that such big groups don’t even exist. We’ve also heard that a lot. The thing is people confuse cause and effect. They would come – but how if there’s no such option available? 

Try to make games for the bigger companies and things will differ. As time passed we were able to host up to 40 and more people.

Your own experience will grow as you host more and more events. You will find out about different stuff, including the limitations on the number of people who can play simultaneously. You may wonder: what’s the limit, for example, for a corporate party? 100? 1000? Well, it’s quite unlikely that you’ll be able to afford it at the start.

If you feel like capacity could become an obstacle for you, decide on the exact amount of games you can put in your place. Think of your expansion (will it be at the same building or?). Mind mobility so that you may bring certain events right to the clients.

Best choice: VR escape room as it allows accommodating up to 6 people and free-roam VR hosting up to 8 players (mind the whole center may include fewer people).

Conclusion

Whichever business model you focus on your biggest income will come from the corporate events. Bonus services would be of great help – feel free to provide your customers with different food and beverages, a photo zone or even actors hired to make their experience more entertaining.

Raise the prices – it will make your product seem valuable. Create a ‘boxed’ solutions – it can be different packages including basic, optimum and VIP experiences. Be more than just a VR center.

After all, the choice of any LB VR model is closely connected to your needs and scale. 

For instance, you may have an amusement park, you may not care much about the profit which certain attraction brings you, but rather about its image – here you enrich it with other experiences (a warehouse-scale VR may come tempting). 

Of course, you can go the other way and create a VR park. If you have an opportunity for a big-budget-stuff, then you may enclose a warehouse-scale VR and a VR escape. 

Wishing to open a lifestyle-business? VR arcades will come handy. Remember that VR escapes are allowing a diversity of wonderful and intriguing games that require less physical space. 

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