Over the last couple of years, we have seen a plethora of news articles about the way virtual reality was going to conserve the timeless arcade. The idea goes that the VR equipment is too expensive for home users, so it creates an opportunity for operators to pony up the big dollars to buy it and then make their money back by charging per game to play with it. In the MIT Technology Review.
"While several high-end cans were released last year that can bring virtual-reality experiences to your living space, adoption of the technology remains in its earliest days to get a bunch of reasons--it's still bulky, pricey, and there is not all that much to do once you've got it on your face. Over two million headsets were sent worldwide in 2016, according to a quote from market researcher Canalys, yet this figure pales compared to the popularity of, say, video game consoles (earnings of their leading one, Sony's PS4, topped six million during the 2016 holiday season ). Consumer virtual reality will likely catch on as costs come down and headsets improve. In the meantime, though, a variety of businesses are betting that customers may be pleased to pay a much smaller sum to try the technology with their buddies at, say, an arcade, theme park, or bowling alley."
It is tempting to dive into this snare, but from an operator's standpoint VR is a terrible deal. Operators are being requested to pay top dollar for technology that is all but guaranteed to plummet in value over the very short term. Other than purchasing a brand new vehicle and driving it a time, I can't think about a way that you could eliminate money faster between what you pay and what you'll be able to get for it down the street.
Another limit for most operators is that while you may be able to supply a space for VR people to roam around in today, as new VR technology is introduced, we're likely to find the point expanded from 100 square feet to the entire world. Rather than viewing just the games in your headset, you will see the real world with game play overlayed. As the tech allows more real world places to be explored, it is going to earn a cramped arcade seem pretty lame in comparison.
VR is heading for mass market acceptance, however it's demand isn't being pushed by gamers who want to pay big buck to play video games, but like the BETAMAX that came before it, by people who wish to watch porn in their houses.
Even when an operator can make a bit of money for the upcoming few years, after VR achieves critical mass, then it will crush whatever earnings flow that operators're dreaming of. Don't believe me? Just check out what is happening in China.
Last year, an eye popping 35,000 virtual reality arcades opened in China. A year later 22,000 of these have closed.
This is an unbelievable failure rate over such a brief time period and one which should function as a sharp warning to anyone contemplating investing in the VR games. Maybe Dave and Busters can afford to take losses on the games more than Chinese startup arcades, but I doubt most North American operators will fare much better using the technology in their game rooms and will only end up in debt at the close of the day.
The issue basically boils down to customers not being prepared to pay a premium to the encounter. Tech In Asia, clarifies the issue perfectly in their own article, on that the Chinese arcade.9d vr boom and bust.

"Enterprising store owners leaping into VR are finding it impossible to bill fees akin to cinemas or bowling alleys to get a VR experience. One VR arcade proprietor told iHeima he saw eager queues when charging US$1.50 to get a 30-minute session, but everybody vanished as it rose to US$5. By that sort of revenue it is impossible to pay the lease."
Even if the match was sold out all day, at $1.50 per half hour they're just earning $30 per day. With retail rents in North America running $1 -- $2 a square foot, there's no way to make the math work, even in the event that you assume that Americans will pay more to play the games.
The actual world data flowing in from China must serve as a canary in the quarter plantations of North America. Operators who invest considerable amounts of money on fancy VR setups will soon find their small VR rooms being replaced by the whole world for a stage. As the setups get cheaper, smaller and more portable, the digital arcades will look more expensive, bulky and limited. I'd love to be proven wrong on this one, but I feel the arcade VR trend is more hype than hope.