How to Make More Money from VR Arcade Games
Virtual reality games are the latest trend in family entertainment centers and arcades. The location-based VR market is extremely complex. Most operators are taking an overly simplistic view of it. This worked in 2016 when segmenting the VR attractions market was fairly simple. There was free roam VR, like Zero Latency and The VOID, and there was room-scale VR like you see in VR Arcades running mostly consumer games and renting the booths out by the half-hour.
As virtual reality display technology gets integrated into more types of amusement games, it’s become more confusing. We now have rides, arcade games, VR esport products, hyper-reality systems, and more, each vying for operator dollars.
I can see this confusion playing out in how VR arcade games are being under-utilized by operators. Hologate is a great example. And the most recent version of this is the new Star Wars: Lightsaber Dojo game from ILMxLAB and VRsenal.
There are 3 basic things that a VR arcade game can do for your business. Below I rank these from highest direct revenue impact to lowest (though the quality of experience can have a massive impact on revenue through increase visitation frequency and referrals. It’s just harder to measure).
- Attract new customers
- Increase spend from existing customers
- Increase the overall quality of experience for all customers
Ideally you want something that ticks all three boxes. This post we focus on attracting new customers.
Attract New Customers
To bring in new customers, you need a VR attraction. Something dramatic enough to get people off the couch, into the car (or bus or train), and through the threshold of your business. You probably already have things you consider attractions. Maybe you have bowling lanes, or karting, or laser tag (which is less of an attraction today than 30 years ago when I launched Laser Storm). I call these anchor attractions. It’s the reason people show up at your door. There are some VR attractions that do this. Virtuix Omni Arena is proving to be an attraction – stats show 40% of players attended an FEC just to play it.
Here is a new interview with Brad Mark from Pole Position Raceway in Las Vegas, talking about how it’s become a massive draw for him and increased his park-wide revenue by 53% (I know I did a double take too).
VR Arcade Games vs a VR Attraction?
Is it something worth getting in a car and driving for? Do I want to go to the trouble of gathering friends or family and coordinating an occasion? Is this the primary reason for the visit? Or is it something that someone stumbles across and decides to play more impulsively?
Arcade games have always been casual, impulsive entertainment. Sure companies are trying to build mechanics in like collectibles to drive more repeat play. But they’re not really working. Some arcade games like Golden Tee Golf and Big Buck Hunter have built massive tournaments around them. That works, but it requires serious effort on the part of the developer.
Here’s one way to visualize it. VR arcade games convert existing customers. But attractions bring in new customers. One of the dirty little secrets in our industry is how we measure earnings and return on investment. If I put a new game on the floor, is it really earning $1000 a week? How much of that is being shifted from other games in my arcade? What percentage of my “profit” is really cannibalization? It’s really hard to measure, because of other variables to weekly revenue. Things like seasonality, competition, weather, school schedules, you name it. We have variables galore.
Another thing to consider: “Is it a game, or an experience?” If it’s an experience, people are less likely to do it over and over again. But if it’s a great game, people want to improve their performance, climb up and hold onto their place on the leaderboard. So ideally you want to be on the top right of the chart above. You want a great game that’s also an attraction. Virtuix Omni Arena seems to have nailed this position.
Now a disclaimer: this is just one way to look at things. It’s not the only one, or the best one. But it’s the one that helps tell the story I am telling right now. There are as many models as there are people who can dream them up. And one more thing. Just because a product is in the bottom left doesn’t mean it’s not a great product. VR Rabbids is an amazing product. I have called it, along with Beat Saber, no-brainer VR purchases an FEC operator could make. But if you, or LAI Games, could figure out how to move that into the top right corner, that would make it even better.
How to Turn Your VR Arcade Games Into Attractions?
Next, let’s talk about how to reposition two of the most popular VR arcade games, Hologate, and Star Wars: Lightsaber Dojo from VRsenal, from games into attractions. (Jump to How To Launch Star Wars VR)
The Hologate VIP Lounge
One of the hallmarks of an attraction is it has a sense of presence. The Omni Arena looks like a spaceship landed in the middle of an FEC. Hologate is mostly air. It uses block truss, and you can see right through it. Which is great for sightlines, but the lack of mass means it needs some help to really pop. It’s also black which can tend to disappear in a dark arcade.
Most operators successful with Hologate give it a front-center location in their arcade where it cannot be missed. And they staff it with well-trained, enthusiastic employees who know how to convert spectators to paying customers. This makes it look like an attraction. If you put Hologate in the back corner of your arcade, and make people find an employee to help them, it just doesn’t scream “This is worth your attention!” to your customers. So don’t do that.
Another way to position Hologate as an attraction is to change the way you package it to your customers. Most operators price per game per person like an arcade game. $5 gets you one round of Zombyte. But one 5 minute VR arcade game does not an attraction make.
Make It A VIP Experience
A few savvy operators have added comfortable lounge seating to their Hologate arena and started selling it by the hour. They think of it as a lane rental in bowling. You can buy one game of bowling which is 10 frames and a max of 21 rolls (if you never throw a strike). Or you can book the lane for you and your friends for an hour or two. Roll as much or as little as you like.
Why not do the same with your Hologate? Offer an all-you-can-play session by the hour. Get some velvet ropes and a “Private VIP Party” sign. My guess is you can easily get $150-250 per hour depending on your market. Don’t just price based on the number of games they can play in the allotted time. Remember it’s a VIP experience. They’ll pay for the exclusivity. A fifth of Vodka gets 16 shots, maybe $320 total across the bar. The same bottle is over $1000 at a VIP table.
You’ll also save on labor. Since it’s booked in advance you know how to schedule for it. And you won’t need to staff beyond an orientation, as it’s super easy to use once you show them how. Certainly no harder than operating a bowling scoring system. An hour of unlimited VR arcade games in a private “booth” with a comfy couch and a large library of games? That’s an attraction. And you’ll also increase your F&B spending.
I spoke to Hologate’s founder and CEO, Leif Peterson, during the height of COVID, asking if he’d seen this operating model increase due to social distancing requirements. With all the fear around headsets, offering a family bubble VR experience was an obvious opportunity. He told me that was always what he envisioned; Hologate as a shared social experience where people play for longer periods.
So what happened? Why did a product envisioned as an attraction end up being positioned as a VR arcade game? I see two reasons. When it launched in 2016 at IAAPA, VR was so new that most people, myself included, didn’t understand how to best utilize it.
Don’t Fall Prey to the Dollar Mindset
The second reason I call the “dollar mindset.” Operators see an arcade with more than 100 games. They sell an unlimited play pass for $25. After all, these games are mostly priced around $1 per play.
Many of them cannot see how it’s possible to get $200 for a single attraction. This is a limiting belief. Couples routinely drop $200 at a VIP theater for bad food, a bottle of wine, and a movie they could see in another auditorium in the same location for 1/10th the cost. But they are willing to pay for a premium VIP experience.
A private session with friends, behind a velvet rope, with food and drinks, socializing while they play an entire library of VR games, is a potential VIP experience. The good news is you don’t need to dive into the deep end of the pool to try this strategy. All you need to do is pick a night, rearrange some furniture, and promote it at Hologate VIP night. Spiff your sales team, or your managers, and test the market. What do you have to lose?
Star Wars VR: A $40 Billion Movie License for $50K
WARNING: This blog post suggests strategies and ideas to promote your officially-licensed Star Wars arcade product. Please be careful using content or merchandise that may be unlicensed in the execution of any of these or other strategies you come up. Disney is very protective of their IP, and rightly so. If you have any doubts or questions, get professional counsel. And when in doubt leave it out.
How can you leverage one of the world’s most valuable IPs, Star Wars, and turn what most operators view as a VR arcade game into a world-class attraction? Let’s start by talking about the first hit game from VRsenal, Beat Saber, and contrast two similar-looking products.
UPDATED: VRsenal’s Beat Saber Is the Best VR Arcade Game, but…
VRsenal’s Star Wars Lightsaber Dojo license expired and the product is out of production forever. If you’re interested I occasionally come across used units for sale. Just send me a message and I will let you know when one comes available. VRsenal also has a new music rhythm game called Synthriders coming soon. It’s an arcade version of the #2 PS4 game of 2021, and ranks higher on metacritic than Beat Saber. Check out my first look review here.
Both Beat Saber and Star Wars: Lightsaber Dojo utilize essentially the same hardware cabinet from VRsenal. But that’s where the similarities end.
Beat Saber is a great video game. It came out of nowhere as an indie game. I first saw it in 2017 as an early demo at the Microsoft booth at VRLA, a virtual reality trade show in Los Angeles. I played it and immediately knew it would be an amazing VR arcade game. Light Sabers meet Guitar Hero – a guaranteed hit. And it was.
VRsenal had a smash VR arcade game with Beat Saber. Unfortunately, Facebook canceled all new licenses of Beat Saber after they acquired Beat Games in 2020. Those visionary operators who purchased what turned out to be a limited edition are thanking their lucky stars. Beat Saber was a great arcade game. It had very high repeat play, appealed to all demographics, and drawing a crowd converted existing customers to a higher price point game. Higher price point purchases increase total arcade revenue in most locations.
But as much as I love Beat Saber, it isn’t an attraction. It does a great job of getting existing customers to part with more money. Many operators charge $5-7 per game. But it doesn’t bring masses of people into your business. It has no real name recognition outside of the small VR gamer community. Sure it was on the Tonight Show where Jimmy Fallon took on Brie Larson, but that’s not enough to get people off the couch and into an arcade.
Dave and Buster’s Brilliant IP-based Media Playbook
As a follow-up to Beat Saber in October last year, VRsenal announced a partnership with ILMxLAB and Nomadic to launch the first Star Wars virtual reality arcade game.
Dave and Buster’s was the first to purchase Star Wars: Lightsaber Dojo, committing in early 2020 to roll it out at all 150+ locations. Their strategy was to leverage the Star Wars brand into a national summer TV campaign to drive traffic. That’s been a hallmark of D&B for more than a decade. Use buying power to negotiate an exclusive and then advertise in mass media that you can find the game “Only at D&B!”
They executed this strategy with success using Halo: Fireteam Raven from Raw Thrills and 323 Studios. They spent millions on TV ads during prime time viewing slots including NFL games and UFC fights. When you have a massive IP that people recognize, the strategy makes sense. Yet the Halo IP is only 10% as valuable as Star Wars.
The plan was to use the same strategy with Star Wars. I understand they were working on a TV ad with Lucasfilm. Unfortunately, and my heart goes out to Kevin Bachus and his team, nobody saw COVID-19 coming at the time, and their strategy was gutted by the pandemic-driven lockdowns. It made no sense to advertise while most of their locations were shuttered. And by the time things started opening their exclusive had run its course. But their strategy was sound. And you can steal from their playbook.
Put Star Wars to Work For You
Star Wars is one of the biggest Hollywood franchises of all time. Star Wars has generated $41 BILLION in the global box office, not including other related licensing revenue estimated at over $1 billion per year. One in three internet users (your customers) profess to be Star Wars fanatics. I hear operators talking about wanting IP all the time. There is no bigger IP than Star Wars.
Electronic Arts recently disclosed in their Feb 2021 earnings call that they’ve earned over $3 billion on Star Wars video games. Star Wars: Vader Immortal, the game on which Lightsaber Dojo is based, is one of Oculus Quest’s top 5 games, along with Beat Saber and Angry Birds, both arcade hits on multiple platforms. People love playing Star Wars games.
Dave and Buster’s understood the appeal of a Star Wars VR Arcade game and the impact it can have as an attraction. During the launch of Star Wars Battle Pod in 2015, people drove from miles away to play it. They told their friends. They even wrote newspaper articles about it. And blogs. And Instagram posts. This is the nature of an attraction…people talk about it.
5 Ideas To Kickstart Your Star Wars VR Strategy
Star Wars: Lightsaber Dojo is the cheapest way to leverage the $40 billion Star Wars license for your location. It’s an E-ticket ride for the price of a VR arcade game. So now let’s look at some specific strategies on how to really leverage the Star Wars IP and get the most bang for your $50K bucks.
No, you don’t have to advertise on broadcast television. But you CAN, and SHOULD, advertise. On social media, direct mail, outdoor, and maybe even digital or cable TV where you can really target audience. One in three internet users in the United States identifies as a Star Wars fan! And every one of them has at some point dreamed of wielding a lightsaber in battle. Come on, haven’t you ever taken an empty roll of wrapping paper, and swung it in front of you making that whooooooosh sound? I know I have.
And once those Star Wars fans come in the door, they cannot feel like victims of bait and switch. You need to have the game at the entrance. Uplight it with some spotlights. Get a red carpet on the floor leading up to it, with rope stanchions around it. Get a life-sized Darth Vader for selfies. You can go all out and get a 3D model for between $2-5K on eBay, or go the el-cheapo route and get a realistic cardboard cutout.
Strike Bowling in Melbourne, where Star Wars: Lightsaber Dojo immediately became their number one game, surpassing the weekly collections of their former top earner in 3-days, has themed out their redemption center and cranes with Star Wars merch.
Activate Star Wars Fans in your Market
Hold a Star Wars-themed launch party. Give away prizes for the best-dressed characters. Get everyone to sign waivers, and bring in a videographer (a pro – you can find them on Thumbtack.com). Take videos and photos of players in costumes playing the game. Now you have a library of content for your social media for the next year.
There are Star Wars, Sci-Fi, and pop-culture communities in every city. Offer to host their next event, and put the game on free play for them. Run a contest for the highest score and give away a rare Star Wars collectible. You can find them all over eBay. I did a quick search on meetup.com for Sci-Fi groups in Oklahoma City and found one with over 1000 members.
Use Local News Media
The press eats this stuff up! It’s hard to get a TV news crew out for a new video game, but a Star Wars VR arcade game coordinated with a party full of costumed characters will be hard for local TV to resist. The imagery will be fantastic for the local paper too. If you’re struggling to get traction, you can always see if a remote live broadcast with the local radio station is a possibility.
Las Vegas NBC TV affiliate KSNV-3 TV ran this story in about all the ways locals can celebrate May the 4th. It featured a local donut shop, a local bar, and a toy store.
Enlist the Rebel Legion in a Fundraiser
The Rebel Legion is a 9000 member group of Star Wars cosplay fans who gather to promote charity and volunteerism while celebrating their love of Star Wars costumes. Below is the Las Vegas chapter collecting Star Wars POPS to deliver to kids in the hospital.
Disney+ Parties and More…
There is a constant stream of new Star Wars content coming to Disney+ streaming service. In 2022 the next 18-months there are 5 new series live-action series, including The Mandalorian Season 3, The Book of Boba Fett, and Obi-Wan Kenobi.
You can have launch parties, after parties, and maybe even figure out a way to have BYOD watch parties, where guests bring their own mobile devices and stream the show while you offer Star Wars-themed food and beverages. And a Lightsaber Dojo competition with amazing Star Wars prizes of course.
Get your team together and brainstorm ideas. These are just a few to kickstart your creativity. Create a Star Wars marketing and event strategy to keep the momentum post-launch. There’s no shortage of ideas. But don’t wait too long. Your competition is reading this blog post right now.
If you need help with your strategic launch plan, drop me a line. I’d love to help you come up with the most amazing launch event for your VR arcade game, attraction, or any product.