The Capabilities Required to Operate a Profitable VR Attraction
Last week I wrote about the different categories of attractions; from single and multiplayer arcade to arena-scale, and multi-sensory free-roam systems, there’s a wide selection of products in a limitless range of prices. It can be overwhelming to decide what products to consider, and impossible to land on the one that makes the most sense for your business. Having traveled the world for the last three years trying almost every VR system imaginable, and talking to hundreds of operators, I’ve come up with a framework to help you evaluate not only the attraction but how it fits you, your location, and your target customer.
This is the fourth email in a 10-part series of blog posts designed to help you select the perfect VR attraction for your venue. Whether you operate an FEC, a bowling center, a skating rink, a movie theater, a restaurant or even a shopping center, this series will give you a diagnostic framework you can use to wade through the noisy location-based VR landscape and find the right product for any situation.
This week we explore the intersection of the Operator and the Attraction. What matters here is your capability. Given unlimited time, energy, and money, we are infinitely capable. In the world of operating a retail business, those are finite resources. It’s best to find an attraction that fits within your capabilities.
Single Player Arcade Systems
Arcade systems are like the San Onofre Surf Beach of VR attractions, a great place to learn. These require the least effort and know-how. A single-player VR arcade game will plop down in your arcade just like any other game. Most operators are putting them within easy view of the redemption center so their staff can keep an eye on them. VR is new to consumers; over 80% have never tried VR before. They might need assistance with the headset. Maximizing earnings and customer satisfaction will often require employee intervention.
You can’t operate a single player VR attraction profitably with a dedicated attendant. My key metric is a 4:1 ratio of players to attendants. Any less than that eats into your profit margins.
Most of the VR arcade games use HTC Vive headsets and tracking. These can be flaky and require manual intervention occasionally. If you don’t have a good game tech on the floor all the time, and the sight of a game out of order pisses you off, VR might not be for you yet.
If you’ve been a spectator watching VR happen around you, hesitant to get into the water, a single player VR Arcade game might be an excellent place to start.
Multiplayer Arcade Systems
Multiplayer Arcade systems are like a fun point break. They require more attention and a little more capability. Two things seem to drive the earnings of these systems: the location in your arcade and the engagement of your employees.
VR is new, and there is a high curiosity factor with consumers. Converting that curiosity to ticket sales requires that customers see it, and your employees sell it. Don’t put VR in the back of the arcade thinking it will draw people back there. Most systems won’t do that. This category of product is still a mode of casual and impulsive entertainment.
Turning spectators into ticket buyers is the biggest challenge with multiplayer VR arcade systems. Many operators find that as soon as people start playing, a crowd forms. An engaged staff member can convert that crowd to players. Figuring out how to jump-start that virtuous cycle is essential. One way is to have highly engaged, extroverted employees.
If you are not fully committed to staffing the attraction, think twice about buying it. If you monitor labor rates like Ebenezer Scrooge, a multiplayer VR Arcade system might not be for you. It would be best if you had employees encouraging people to try VR. Some of the most successful arcades took their best party hosts and made them VR guides, actively selling the VR experience to their guests. That means staffing it when nobody is playing, which is the investment required to succeed. You’re playing the long game, building a base of players who will share their experience with their friends and come back to play again.
An excellent spectator experience is another piece of the puzzle. Look for attractions that have created amazing spectator modes. First person viewpoints of what players see in their headsets projected onto a monitor are not good enough. Ideally, you want a mixed reality composition of the player inside the virtual experience to create the context for the spectator to get a sense of what to expect.
Arena Scale Systems
Arena scale systems are more like a reef break, requiring a high level of skill and preparation. The successful operation of these attractions require all the capabilities of the multiplayer arcade systems and then some.
These attractions come with higher ticket prices, so converting curiosity to commerce takes a better sales pitch and closing skills from your employees. You also need to invest in on-site point-of-sale material like video trailers of customer testimonials and strong imagery to support the sales process. Unlike with the Arcade systems, you cannot rely on live viewing alone. Most of these attractions are in closed rooms, so spectators don’t have visibility. The higher price also leads to more dark times where nobody is playing. I have used a one-minute video trailer of the experience on an iPad to convert people sitting at a bar into a $250 VR sale.
You also need to be proficient at groups sales. A robust corporate training and team-building business is an essential pillar of profitability among the best operators. Creating a training curriculum is a crucial driver of group sales. Just saying you have a team building game will get some groups to bite, but backing it up with a well-designed facilitation process will get you access to corporate learning and development dollars which are 10X higher than entertainment budgets.
Birthday parties are also critical to success. Building this business can be a challenge with the smaller Arena Scale systems that allow only 4, 6, or even eight players. If your average birthday party is 10 or more, the potential solutions narrow significantly.
The most successful arena-scale VR attractions sell a large portion of their tickets online in advance. If you don’t have a robust digital marketing capability and a high-conversion website, you will need to hire talent or find a talented agency. Facebook, Google, YouTube, and Instagram marketing campaigns have proven successful when run by professional digital marketers with great creative. If you try it yourself and it hasn’t worked, I suggest giving the right agency a go before suggesting that digital advertising doesn’t work.
Multisensory VR Systems
Multi-sensory attractions are the big wave surfing of VR and come with the highest level of risk and capability requirement. They’re the most capital intensive, costing many hundreds of thousands of dollars. Most of these solutions incorporate sophisticated motion control and special effects. If your technical prowess isn’t top notch, these probably are not for you.
Your marketing also needs to be spot-on. The ticket price has to be 2-3X higher per minute for these attractions over the Arcade versions to yield a return on investment, so every transaction has elevated stakes. To sell a $30 ticket for a 10-minute session, you need to understand how to market an evocative experience. It’s not about VR; it’s about where this experience will take them emotionally. It’s a very different type of marketing than what most amusement operators are familiar with.
It would be best if you also made these attractions part of your anchor attraction marketing mix. You can’t just rely on walk-by traffic from your facility. These are destination attractions, but quite-short in duration, which makes them challenging to market. There’s an inherent contradiction in a short duration high-priced entertainment experience as a destination. Getting people off their ass and into a car to drive across town to spend 15 minutes doing anything is hard. Moreover, getting people to pay $30 as an impulse purchase in a facility that might offer 2 hours of entertainment for $20 comes with its challenges. If you don’t have a strategy to deal with this, proceed slowly.
Multi-sensory attractions are for the most sophisticated operators committed to offering the absolute best experiences for their customers. You must be willing to pay the price not just in dollars invested, but in building capabilities you don’t possess.
By taking a hard look at your capabilities, you can narrow down your selection process to the best category of attraction for you. Next week we will talk about your location, and what type of concepts might make the most sense.
If you’ll be at Bowl Expo this week looking for a VR attraction, just reply with this link and we can walk the show together and figure out exactly what makes sense.