How to choose an LBVR product?

This article was originally published at Skarred Ghost's blog.

VR just passed the thorough of disillusionment and is here to stay thanks to investments in the AR/VR market by Facebook, Google and Apple. VR is a place for the next generations to have fun together at. Millennials did the same with video games. And a VR center owner can get kids familiar with the technology so they could return once they will grow up. And they will come back even if the mass adoption will take a few years.

Because unlike the arcades, Location-based VR (LBVR) provides the exclusive content and experiences you can’t have at home with your friends. The point is to go out together, and that will go with the tides for good.

LBVR is considered worth $12,324.7 Mn by 2027 and 2019 seems to be the second wind with Sandbox VR raising $68 million from Andreessen Horowitz and other investors. The Void also got got $20 million from James Murdoch, son of Rupert Murdoch, a billionaire.

And VR expertise has its value right now. Jorge Torales, CEO at Torch VR, a VR park in Prague, the Czech Republic says: “I was hired by the Institute of Documentary Film to consult with several teams trying to implement game mechanics into their applications. Most notably, Spencer Hunt from Skydance Media, a company co-producing films with Paramount Pictures. The difference in between the design and operation of what was essentially a story-driven interactive-experience and what we in the LBE VR industry need to provide for our guest is enormous.”

LB VR types

Hyper-reality

Hyper-reality or mixed reality means creating a world around, it’s the merging of real and virtual worlds, where physical and digital objects interact with each other in real-time. So when a player walks in VR he walks in the physical world and when he picks a gun in VR, he does the same in our reality, the same with touching a wall.

The Void parks provide physical feedback with physical walls built, special effects made with fans, mist machines, and heat lamps, as well as prop guns and torches and other items to be used. These physical elements are being seen and can be touched in VR, making the immersion deeper.

You will need millions of dollars to build something like this. The Void CEO Ken Bretschneider has invested $13 million of his own money to make it happen. The space required for such an experience is about 1000 square feets. Unfortunately, you can’t buy a franchise, since The Void had the deal with Disney closed.

Sandbox VR (ex-Glostation) is another hyper-reality project and it is way more space-efficient. However, a request for a franchise will lead you to the the waiting list. From the public information the franchise cost seems to be around $700,000.

What you can do is to create a hyper-reality experience by yourself taking as a reference an escape room company called Tick Tock Unlock. The development cost of the project isn’t public, but it’s not less than $200k according to the rates and terms that are common for the market.

Another option is to get a ready-made solution. For example, Entermission provides VR escape games with special effects such as scent, wind and temperature. The cost appears to be around $90k in the US, Canada, Mexico and Australia.

Free-roam: warehouse and room-scale

Free-roam transfers a player to the virtual world as much as possible. The full-body tracking brings the idea to the maximum. There is a lot of trackers all over the player’s body, and she can see her arms and legs in VR. She can hold a gun, walk and shoot, and that’s it. The ability to step inside another world and be able to roam freely is the main wow-factor.

VR backpacks or wireless adapters and a lot of space are required.

That’s why the products with such requirements are called warehouse-scale VR. You need a big footprint so your players can walk with no obstacles and your game operators can monitor the game more easily.

Image Credit: TripAdvisor, Zero Latency Madrid

Zero Latency was the first to provide such experience. Mostly it has shooting games for 8 players in 200 sq.m. The flagman title is Zombie Outbreak.

An entry fee for warehouse-scale VR is around $600k.

Room-scale VR is way more space-efficient. The downside is that players may stumble upon walls, other players and other obstacles, so a game operator should pay more attention while he’s monitoring them.

Hologate provides sporty shooting games. Capacity is 4 players, and the space required is 270 square feets. The price will be probably around $95k.

Virtual room makes VR escape games for 4 players. The pricing is about $40k.

Avatarico presents a VR escape game for 6 players in 370 sq.ft. The startup cost is €22k.

Exit VR, Ubisoft, and others use pay per play or revenue share model for their VR escape games. They can be played by teams of 4 players in 370 sq.ft.

Pay per play model looks very attractive for newcomers that aren’t sure about their future success. But after one year of successful operations you will pay a solid chunk of your income on a monthly basis. The same time you’ll need to return your investments if you’ll go with upfront payment model. In that case, you’ll need to make sure that you’ll able to succeed. And you should do that anyway.

The cheapest way to start a VR business is a VR arcade. You’ll be able to use pay per play model. You’ll have hundreds of games accessible on Steam, SpringboardVR or Viveport. But none of them will be exclusive. And there is a lot of VR arcades opening every day with the same roster of products.

Seated VR: hand tracking games, movies and simulators

Seated VR gets you entertained. Any amusement park has people flying, riding and driving. They scream, yell and laugh. And they sit. Paintball, laser-tag and other free-roam attractions are niche products if you compare them to roller coasters, bump cars and the rest.

VR pods with 7D movies is rather passive experience.

VR simulators are more interactive. You can drive a racing car, fly, control a robot or a spaceship. And it could be fun to watch people playing, for example using a VR swing. Such simulators are quite popular in Asia.

The downside is that it’s dedicated to one or two players. And the average pricing for a simulator or a pod is about $8k.

Avatarico in Europe and Asia, and Entermission in the US, Canada, Mexico and Australia provide seated VR escape games (you can also call it hand tracking VR).

It’s the most space efficient product in the market since you place 6 players in 270 sq.ft. The startup cost will be €22k.

Hand tracking VR allows players to interact with objects in VR with their hands. They don’t hold any controllers. That leads to a few key points about that type of games.

Players see their hands for the first time and say ‘wow’. It’s exciting to touch objects, use them to fly or shoot fireballs.
It’s natural to use your hands, it’s the most intuitive control.
It’s not a video game anymore. It’s something better.

VR development

Considering this option makes sense if you can sell your game to hundreds of locations.

So you need to have a crucial advantage. You should answer these questions: Will the business model differ somehow? What about technology? How space efficient it is? What audience does it appeal to? Is it repeatable?

Paying developer €30 per hour, you’ll need a budget of €250 000 — €450 000, and you’ll get a game in 6-8 months. It’ll be good to have 20+ deals closed at least break even depending on your payment model and pricing.

The team should include a game designer, a concept artist, an environmental artist, a 3d-modeler, a coder and a Q&A specialist. Also you can consider hiring a company providing outsource development services like Avatarico.

Checklist of choice

Your audience

What is your audience? If it’s male audience age 25-35, then you should go warehouse-scale VR with shooting games, if it’s teenagers, then go arcade VR, if you want broader audience, go escape games. Real-life escape rooms appeal to broader audience, and VR escape games do as well.

If you can host family holidays and corporate parties and if you’re welcoming elders and kids, and all the genders, then your business will grow. It’s crucial to target your center at everyone, not just geeks and gamers.

Will a team of moms beat the game and have fun? Can your customers do a hen party at your place? Or a kids birthday? Maybe an anniversary of an elderly couple?

Groups or individuals

Do you want to attract group sessions? Or will you rely on individuals and couples?

For arcade games, it’s about a few minutes of playing per game per player, and it’s a challenge to upsell the customers to play more than 30 minutes and invite more people.

If you sell group sessions (with escape or shooting games), you can sell one-hour sessions, and if you charge per team, it’s even easier to get traction.

If you rely on groups, check cooperation and social aspects of the game. Can be the game complete with one player? Do you need to cooperate with your teammates?

Let people talk to each other via voice chat. Let them see their names during the play in order to recognize each other.

How many people you can host

Configuration of 4-8 people in 2000 square feets means you can’t have more people than that in this space. The space efficiency affects your total capacity.

Avatarico and Entermission provide space-efficient experiences requiring only 270 square feet for 6 players. And there are solutions for 4 players in 375 square feet from other companies as well.

Here is the comparison of different types of products in terms of capacity.

How much will you get from the space

One of the main reasons Andreessen Horowitz invested $68 million in Sandbox VR was easiness of scaling this business. The experience doesn’t require a lot of space, there is no high-cost equipment, so it’s easier to open a new location.

Use revenue per square meter as a metric to assess your space efficiency.

Products

Easy onboarding

Most of your customers are newcomers. They don’t want to learn a lot about the technology.

Some of them right after they saw the controllers will say ‘Oh, I don’t want to play a video game and mess with all these buttons!’

Hand tracking games Avatarico and Entermission are the most intuitive in terms of controls because you act with bare hands, there is nothing in the world more natural than that.

Arcade games have a great success focusing on easy start in terms of gameplay. No long instructions, just turn it on and go.

And if the games require some instructions before playing make them fun and effective.

Experience

Why should I use VR if it doesn’t offer something I can’t experience in real life? You shouldn’t. If your players don’t say ‘wow’ during the session, something is wrong.

Hand tracking games from Avatarico make you fly in zero gravity and shoot fireballs with bare hands. Virtual room is like time traveling.

Guiding players

You need a game operator to give hints and complete puzzles or levels with one click of a button. He should talk to the customers during the game and make photos.

So check the features of a game operator app provided.

Content exclusivity

VR arcades have non-exclusive content, so there is a lot of them. If a content provider gives you exclusivity for a region, and you can be the only location in the city with this experience it’s a big advantage at the start.

What company you’re working with

Purchasing the product is not that hard. You should check what support your future partner provides, both tech and marketing. How many games does he have? Do they have success stories among their partners? What do people say about their games? Check the reviews. Do they provide some statistics like Net Promoter Score? How long they work in the market. All that is important.