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?
Why Time Matters for Pricing
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.
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.