July 2018

8 9 OPENING LINES STATE OF THE VR ARCADE INDUSTRY: AN OPEN LETTER FROM SPRINGBOARDVR CO-FOUNDER, WILL STACKABLE T he modern VR Arcade industry (out- side of Asia) is just over two years old. It is still a baby industry. And for such a new industry, it is doing pretty well. Based on the largest industry survey to date, nearly two-thirds of VR Arcades are at break even or better right now. Great news! That said, many VR Arcades are struggling to find the right combination of price point, over- head, customer experience, and content to be truly profitable. Some VR Arcades are seeing high utilization rates and growing profit mar- gins and are expanding into multiple locations, while others are still struggling to find the sweet spot. I talk to arcade oper- ators every week and I’m blown away by how hard everyone is work- ing to figure it all out. Part of the challenge is that in such a new industry, there is a seri- ous lack of proven business models and very little real data. Most VR Arcades are making decisions based on guesses and by looking at pricing and business models of other VR Ar- cades.We experienced that firsthand.When we started one of the first arcades back in No- vember of 2016 much of our business model was pure guessing. In a brand new industry, no good data existed. It took us months of losing money to START figuring out what we were doing wrong. The struggle is real. This is a new technology, a new industry, and a new business model. It has become common knowledge that in order to stay relevant (and to stay ahead of falling in-home prices), VR Arcades are going to have to innovate and offer more immersive and exciting experiences. Between our platform data, surveys, and talking to industry experts, I’m optimistic that VR Arcades can do quite well and have a place in the “immersive eco- system”-both now and for years to come. In the next 3–5 years, I imagine we’ll see high-end out-of-home immersive experiences like Nomadic, Dreams- cape, and The Void con- tinue to develop, and of course better and more affordable immersive experiences for the home. The question then is. . . is there space for a “middle slice” of immer- sive experience that VR Arcades could own? Take the movie industry as an example. Thousands of movie screens worldwide that can all play the same content at a higher-lev- el of quality than customers can experience at home. The standard technology “unit” that makes this $39 billion dollar industry work is a projector, a giant screen, high-end audio and comfortable seats. What would a standard “unit of VR” look like