Over the previous few years, we've seen a plethora of news posts about the way virtual reality was about to save the classic arcade. The theory goes that the VR gear is too expensive for home users, therefore it creates an chance for operators to pony up the big dollars to purchase it and then make their money back by charging per match to play it. Much Nolan Bushnell, the inventor of Pong, is attempting to hype the tech since the industry's savior. In the MIT Technology Review.
"While several high-end headsets were released annually which can bring virtual-reality experiences to your living space, adoption of the technology is still in its earliest days for a bunch of reasons--it is still bulky, expensive, and there isn't all that much to do as soon as you've got it on your face. Over two million cans were shipped globally in 2016, according to a quote from market researcher Canalys, but this figure pales compared to the popularity of, say, video game consoles (earnings of their top one, Sony's PS4, topped six million during the 2016 holiday season ). Consumer virtual reality will likely catch on as prices come down and cans improve. Meanwhile, though, a number of businesses are betting that customers could possibly be pleased to pay a much smaller sum to try out the technology with their friends at, say, an arcade, theme park, or even bowling alley"
It is tempting to dive into this snare, but in the operator's standpoint VR is a terrible deal. Aside from buying a brand-new car and driving it a mile, I can't think of a way you could eliminate money quicker between what you pay and what you'll be able to get for it down the road.
Another limit for most operators is that while you may be able to supply a space for VR individuals to roam around in now, as fresh VR tech is unveiled, we are going to see the stage expanded from 100 square feet to the whole world. Instead of viewing just the games from your headset, you'll see the true world with sport play overlayed. Children can go to the park and relive the knights of the round table or parking garages to take aliens. As the tech allows more actual world places to be explored, it's going to make a cramped arcade seem pretty feeble in comparison.
VR is heading for mass market acceptance, however it is demand isn't being driven by players who wish to pay big buck to play with video games, but like the BETAMAX that came before it, by individuals who want to watch porn in their houses.
Even when an operator can create a little bit of money to the upcoming few years, once VR achieves critical mass, it will crush whatever earnings flow that operators are dreaming of. Don't believe me? Just check out what's going on in China.
Last year, an eye popping 35,000 virtual reality arcades opened in China. A year later 22,000 of them have closed.
That is an incredible failure rate over this short period of time and one which should serve as a sharp warning to anyone considering investing in the vr game games. Perhaps Dave and Busters is able to take losses over the games more than Chinese startup arcades, however I doubt most North American operators are going to fare much better with the tech in their game rooms and will only wind up in debt at the end of the day.
The issue essentially boils down to customers not being prepared to pay a premium for the encounter. Tech In Asia, describes the issue perfectly in their own article, on the Chinese VR boom and bust.

"Enterprising store owners jumped into VR are finding it impossible to charge fees akin to cinemas or bowling alleys to get a VR experience. One VR arcade proprietor told iHeima he saw excited queues when charging US$1.50 to get a 30-minute session, but everyone disappeared as it rose to US$5. From that kind of revenue it is not possible to cover the rent."
Even if the game was sold out daily, at $1.50 per half hour they're just earning $30 a 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 with the matches.
The real world information streaming in from China should function as a canary in the quarter mines of North America. Operators who invest considerable amounts of money on fancy VR setups will probably find their little VR rooms being substituted by the entire world as a stage. Since the setups get cheaper, smaller and more mobile, the virtual arcades will look more costly, bulky and restricted.