FAQs About Opening or Starting a VR Arcade

I’ve been speaking with a lot of people who are looking at opening a VR Arcade and That. Is. Awesome.

The more conversations I have, the more I hear the same questions. When I was coaching people about their “content strategy” they would always say “I don’t know what to write about”. I would tell them, “Write the answers to your Frequently Asked Questions (FAQs). So without further adieu, here are 12 things you need to know…

Experiences

The first thing you need to consider is what sort of VR Arcade will you be opening? Will it just have headsets and allow people to play games on the HTC Vive or will you offer something people can’t get at home like this?

This is a VR Pod from China — 9D VR Experience…Not necessary for opening IMHO

I must admit this is a bit of a trick question in my mind. As it stands today 99+% of the population has neither of these things at home. So for now, either is the right answer. My suggestion is start simple and be prepared to add to it. People will be blown away by what’s available in the Vive today. And with all of the available experiences you can start by opening a smaller arcade and use that money to invest in opening one with fancier technology.

Space

I know you’re busy thinking about the point above. Once you figure that out, you’ll have a better idea on how to answer this. In short, a typical “Vive Booth” requires a minimum of 8 feet by 8 feet (2.5 m x 2.5 m). If you have a little more space, all the better. (Check out this post about VR Arcade Design). You will also need room for some seating, check in and a lobby. So a very small arcade will be at least 800 square feet (250 sq meters). If you want to add the pods like pictured above or get into free roam experiences (see below: computer in a backpack so it’s portable VR) you will need WAY more space.

This is What Fun Looks Like — Standard HTC Vive booths at VR Junkies

Costs

You’re going to have costs associated with the technology (hardware, software, TVs, tablets, cabling, etc.) installation, design and construction of your space, rent, game fees, license fees, furniture, marketing and employees. Sounds fun, right? Some of these costs are 1 time charges and don’t amount to that much. Other charges are ongoing. Game licensing for instance…the more successful your arcade is, the more you will have to pay. Not a horrible problem to have. I’ll tell you what, I’ll write a more detailed post on costs if anyone asks.

When I was researching building out an arcade here in Detroit I had budgeted $70,000 to get the build out, equipment, software and have a bit of a cushion. If I didn’t get any business in the first 45 days, I wouldn’t have to worry about the 3rd month. I would have been closed up. Curious about learning from the other VR Arcade owners. How much did you budget for your opening?

Pricing

I’ve written extensively on the importance of pricing so just click that link to read more. In short, we charge $1.00 a minute and give price breaks for an hour. That post also has a currency converter and a lot of rationale. Check it out.

Marketing

Your single best source of marketing is going to be the people who are in your arcade. Make it easy for them to promote you. Get yourselves listed on all of the cool social media channels. Come up with a short and memorable #. Encourage them to share photos and videos of themselves and their friends playing. Word of mouth is the most effective form of advertising there is. Added bonus…it can be the cheapest. Offer people 5 minutes of free play (on their next visit) for tagging your space. Want more insight on marketing, check out This Post.

Games

There are sooooooo many games. Like just so many. To say there are 1000 is an understatement. What’s even crazier is that for every game that exists there are probably 2 being developed right now. Here’s the truth…some games suck (that’s a technical term). They’re just not worth it. You need to make sure that your customers are offered a great gaming experience so it’s important to have access to some good data. We offer over 70 experiences through our licensing portal and continue to add top shelf experiences every week. Click that link to learn more.

Make sure you have this game at opening — XorteX in the Lab is my fav VR experience.

Licensing

Speaking of licensing, this is a HUGELY important consideration. You can’t just go to steam, buy/download a game and then sell it in your VR Arcade. You have to license it from the developer. Yes, you could go to each and every developer and ask them to license their games to you. Or you could partner with someone who has already done that. See that link above in games 😉

Location

Did you ever see the movie The Field of Dreams? There was a line repeated throughout…”If you build it they will come”. While many VR Arcade owners really want this to be true, that doesn’t mean it will be 🙁

If you’re not going to be in a location that has or is near significant foot traffic, you had better have a tremendous marketing budget. If you don’t have one or the other, this may not be the endeavor for you. Your space will need to be clean, accessible and a place that people will want to come. Think about opening in a mall or partnering with a place that already has lots of foot traffic. Some people are starting off by offering mobile VR Arcades. They’ll bring the gear to you. Maybe that’s a good starting point for you too?

Franchise?

To franchise or not franchise…that is this question. There’s pros and cons of both. A good franchise system will have all of the pieces in place for you to simply copy and paste your way into success. But, you have to follow their rules and do things the way they want them done. This limits the creativity. Maybe that’s perfect if you’re not a creative type. Hmmmm

Here’s the deal, if you have your own brand already you may not want to franchise. If you don’t have one…maybe it will work out better. Check out VR Junkies for starters.

Software

Software can help you automate so many processes that will save you time, energy and staff once you have your grand opening. It would be worth it to research now. We are pretty proud of the software we have built and are continually making improvements. My favorite part is that we handle the game licensing for you. See above.

Mobility

There are a few VR experiences that are mobile. Not like throw the equipment in the van and drive around mobile, but pack it up in a back pack and be able to move around in an Arena Scale version. IF this is what you’re thinking about opening, it is a whole different kettle of virtual fish. In fact, it’s a bit out of my league so I can’t really offer much advice, but am happy to discuss the pros and cons. What I know for sure is it requires much bigger space, more expensive equipment and way more expensive licensing/franchising fees.

Thinking about opening one of these? — Arena Scale VR…Look mom, no strings

Electrical

This is a question that always comes up. I can only speak for electrical here in the U.S. but there isn’t any fancy demands at all. Just typical outlets work fine. You will need a total of 5 outlets per booth. The Vive, The Computer, The TV and 2 Lighthouses. The lighthouses are normally diagonal from each other so you will need to keep that in mind. Get yourself a power strip with a surge protector for the computer, vive and TV and you should be all set.

Didn’t get enough from this post? Check out 5 More Things VR Arcade Owners Must Consider. It’s part 2 of the original post I wrote a few months back. Some of what is in those posts is covered here, but with a different take on it.

Are there questions you have that didn’t get answered? Ask away.

Want to talk to me directly, find me on Skype as trybean or send me an e-mail.

Be sure to check out our Facebook Page for all kinds of VR and a little bit of AR information.

Wow…this was long. Are you still here?

You don’t have to go home, but you can’t stay here 😉

August 23, 2017August 23, 2017

Ideas to Keep Your Business Top of Mind With Your Customers

Do you spend more time courting new customers or adding value to existing ones?

Most B2B (business to business) businesses I know get the mix all wrong. They spend tons of time, energy and money trying to bring in new customers. If they spent 30% of those resources on existing customers, they would be far better off. Why? Because existing clients already know about you so that cuts down the sales time. They are also more likely to refer you new opportunities. And referrals are much easier to close than cold calls. But what does this have to do with your B2C (business to consumer) Family Entertainment Center?

A lot. Think about your advertising. Is it directed to new people or existing clients? Exactly.

What are you doing inside of your center to get people to come back?

Loyalty Program

Sure some of you have or are thinking about a loyalty program, but how is it working? Maybe a better question is how are you working it? The single biggest way loyalty programs fail is because companies don’t tell their customers they have one. Or maybe they tell them about it, but they don’t explain it correctly. The key to a loyalty program is to make sure the customer feels GREAT about being loyal to your business. It should be a big deal. Make sure your staff knows this.

More Loyalty = More $$$ — Start a Customer Loyalty Program

What about a referral program for Customers?

Are you incentifying your existing clients with a reason to come back to your place AND bring someone new? You don’t have to over think this. Make it easy on you and them. It could be as simple as a BOGO (buy one get one) laser tag, a handful of game tokens, 100 redemption tickets or a free hot dog. Test different ideas every month. See how often each one works. Track it. Than offer a standard program moving forward.

Weekly specials or discounts

Pick your slowest night and offer the best specials. It doesn’t matter if it’s on food or on gaming or on something else…just give people a reason to show up. Then watch them do it. Pretty soon your slow nights, become your busiest nights. Be mindful that when choosing a loss leader (fancy term for something you may lose money on to get people in to spend more money elsewhere) that you may lose money on this offering. Don’t ever make these special offers without the fine print.

You can also do things that reach your customers outside of your venue IF you do the right things while they’re there. What are you doing to collect their information? If you have a rewards program you can get their name, e-mail and maybe a phone number or home address. If they have to sign a waiver you can get their name and e-mail at the least. You can ask them straight away if they’d like to sign up for e-mail discounts and coupons. How else can you get their info?

They may not love it, but you'll get new data — Google “Waiver Form” and find one for your Customers to sign

How you reach Customers outside of your space:

Email

This is a pretty easy and consistent way to stay in touch with your clients. Choose a service like mailchimp or constant contact (both offer free accounts for a limited number of subscribers) and begin sending a monthly or bi-monthly newsletter. Note bi-monthly can mean every 2 weeks or every other month. I know content can get tiresome to produce so make it easy on yourself. Set up a template that’s plug and play. Put in a few sections:

Calendar of events: Here you highlight what your upcoming specials, discounts or other big events for the coming month are

Featured game or experience: Pick something every month to showcase *Tip: If you have only a few experiences think about ways people can get more enjoyment out of them

Photo of the month: Take a pic of someone enjoying themselves or even better, ask your customers to upload a pic to your Facebook page and highlight that in your newsletter

FEC Funny: Do a search on Google for Arcade or Fun Center memes and share one in every note. Click to see an example from the search “Laser Tag Funny“.

Direct Mail

You can send surveys, product announcements, special promotions and more. They can be a postcard or a big fancy envelope with lots of info inside. This idea works a LOT better if you have their address. If not, than go the Val Pak route and pop a flyer in the envelope. Don’t like that idea? Find a direct mail firm who can deliver mail based on a zip code and target a few of your neighbors.

Could be a great way to reach new customers near you — We’ve all gotten this piece of mail

Social media

You have started a Facebook page, right? If you haven’t, now wouldn’t be too late to do so. Get your people involved in what’s going on in your world. Give them insight on how to enjoy your space more. Let them know from your perspective how they can work better with you. Add value to them. Always remember that your clients NEED (well, at the very least Want) you to be successful so you can continue servicing them. They are some of your biggest fans. Treat them as such!

You can use this on your facebook page to attract customers — Some centers are so sensitive 😉

Any of these options will work for you. If you did them all, that would work too. The key is to make a choice and then a concerted effort to make it happen. I hope you will implement some of these ideas because I am sure your business will grow.

August 17, 2017August 18, 2017

Pricing Ideas for your VR Arcade

This post is based on one of the most important lessons I’ve shared after years of offering my time and talents as a consultant and coach. Getting your pricing right from the get go can change everything. The challenge is, without some trial and error, it can be really tough. When that is the case, the best advice I can offer is to do some market research and learn what others in your space are charging. Before we get into the specifics, let’s look at the considerations.

What are we measuring?

Can we just use a pricing calculator — We Need to Measure Something

Funny thing about VR experiences is that some of them are fairly static and take a set amount of time. Others are predicated by how well or not well a player does and vary in length based on that. And finally some can be completely skills based and will allow a player to play as long as they can keep going.

So the first consideration is do you want to charge people by time or by the experience?

Why Time Matters for Pricing

Our software has a cool time clock — There has to be a better way to measure time.

Since the biggest factor of VR arcade success is “throughput” (meaning how many people can have pay for your experiences in a given time) you want to choose a consistent measure. Considering that each of these experiences could run from four or five minutes up to 10 or 12 minutes or way longer, it’s really hard to schedule your day. As such, choosing time as your unit of measurement should be a no-brainer.

Bundled time

Pricing made easy — As the clock runs down, the profits go up.

This is a more interesting consideration. If we agree that you should be selling minutes, than doesn’t it makes sense to look at just how many minutes? The majority of experiences (not clips or videos, but actual games or similar) are a minimum of 5 minutes in length. So maybe you should look at blocks of 5 minutes? That could work. Or maybe those blocks should be a bit longer…like 15 minute blocks. Or 30 minutes. What about an hour?

Think this through. From your own VR experience, what is the longest amount of time you’ve spent in the goggles straight? If you’re like most people, it’s less than 30 minutes. So while an hour (or more) may seem like a good plan, that only really works if you allow multiple people to share that hour. Which you can. And likely should consider. I’ve seen some VR arcades say their pricing per hour is only good for two people. Not sure why you would limit it at two. I could see limiting it to four, or maybe six, maybe.

Licensing rates

Aside from making mad stacks of cash with your VR Arcade, your pricing matters because of licensing rates. What are licensing rates you ask? Well, only a few of the VR experiences are free to download and free to play. And as the trend of VR Arcades continue to grow, more and more developers are moving to a “pay per play” or “pay per minute” model. In effect, you are licensing the game.

It’s super important to play by these rules too. If you operate a VR Arcade without paying the game developer, and the next group does that and so do the others, all of a sudden the game developers aren’t making money. What’s the first thing they’re going to stop doing?? Right…making games. So let’s all agree that paying them is of utmost important.

We have negotiated some pretty good rates with game developers across our multiple locations. Those rates are between $.07 and $.20/minute (there are a few experiences like The Lab which are free to play). HERE is a list of games we license.

Currency conversion

So many choices — Pricing in your currency

I live in the Detroit area which is in a state called Michigan in the North almost Central part of the United States of America. As such, when I think about money, I only think in terms of dollars. I understand that some of you are reading this from different parts of the planet (comment where you’re from if you’d like). To make the following paragraph make sense, I’ve included this handy currency converter link: Honestly, I normally just go to Google, but I couldn’t get a link from them.

Pricing at our locations

Our software is in two different types of locations:

VR Junkies locations that we own or operate as stand alone VR Arcades.
Our client’s sites who are typically operating a Family Entertainment Center of some sort and have launched their own VR Arcade inside of it.

For the most part, all 20+ locations share the exact same pricing strategy. It’s really simple. It’s $1.00 a minute. Earlier we talked about “bundled time” and we do that. We give a price break at an hour. We charge $45.00 for 60 minutes as opposed to $60.00.

To be fair, we do have a pretty big name client who has amazing foot traffic, especially in the summer months. They have made the decision to offer 30 minutes at $25.00. That makes some sense to me. It is interesting that they sell four times as many 15 minute blocks than 30 minute blocks. The first possible reason is that people at this location look to enjoy many of the other amenities. So 30 minutes could seem like a long time. The other reason could be that people who haven’t experienced room scale VR are unsure if they’re going to like it. $15 may seem easier to take a flyer on than $25.

Other Numbers to consider

The rest of the numbers looks like this:

Average sale = $21.00

Most frequent sale = $10.00 with a 10 minute add on

Average minutes played per booth per month = 2230 – This number can be misleading as some locations have 6-8 booths. Less booths = higher playtime per booth. Also important to note that while 1 of our locations is over 1 year old, most locations have less than 3 months of existence.

Largest number of minutes played in a location = 48,000. They are in a very popular beach destination. Are open 14 hours a day and have 8 booths.

Average number of booths per location = 3.8

Least amount of booths = 2

Most amount of booths = 8

Speaking of booths, if you’re interested in looking at some cool Booth Designs, click that link.

Curious to hear about your pricing strategy if you have one. Or feel free to bounce ideas off here in the comments and I’ll get back to you. Thanks for taking a look and I hope you found this helpful.

Private Label VR

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