Throughout the previous couple of years, we've seen an array of news posts about how virtual reality was about to save the classic arcade. The idea goes that the VR indoor playground equipment is too expensive for home users, therefore it creates an opportunity for operators to pony up the big bucks to buy it and then make their money back by charging per match to play with it. Much Nolan Bushnell, the inventor of Pong, is trying to hype the technology as the industry's savior.
"While many high-end headsets were released last year that can bring virtual-reality adventures to your living room, adoption of this technology is still in its first days for a bunch of reasons--it's still bulky, pricey, and there is not all that far to do as soon as you've got it on your face. More than two million cans were shipped worldwide in 2016, according to an estimate from market researcher Canalys, but this figure pales in comparison to the popularity of, say, video game consoles (sales of their leading one, Sony's PS4, topped six million throughout the 2016 holiday season ). Consumer virtual reality will probably catch on as prices come down and headsets improve. Meanwhile, though, a number of companies are betting that consumers may be happy to pay a much smaller amount to try out the tech with their buddies at, say, an arcade, theme park, or even bowling alley"
It is tempting to fall into this snare, but from an operator's standpoint VR is a terrible thing. Operators are being asked to pay top dollar for technology that is all but guaranteed to plummet in value within the very short term. Aside from buying a brand new vehicle 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 have the ability to get for it down the street.
Another limitation for operators is that while you may have the ability to supply a room for VR people to wander around in today, as fresh VR tech is unveiled, we're going to see the stage expanded from 100 square feet to the whole world. Instead of viewing just the games in your headset, you'll realize the true world with sport play overlayed. As the technology allows more actual world places to be explored, it's going to make a cramped arcade look fairly feeble in comparison.
VR is heading for mass market acceptance, but it's demand is not being pushed by players who wish to pay big buck to play with video games, but such as the BETAMAX that came before it, by individuals who wish to watch pornography in their houses.
Even when an operator can make a little bit of money to the next few decades, once VR achieves critical mass, then it is going to crush whatever revenue stream that operators are dreaming of. Do not believe me? Just check out what is happening in China.
A year later 22,000 of these have closed.
This is an unbelievable failure rate over such a short period of time and one that should serve as a sharp warning to anyone considering investing in the VR games. Perhaps Dave and Busters can afford to take losses on the games longer than Chinese startup arcades, but I doubt most North American operators are going to fare far better using the tech in their game rooms and will just wind up in debt at the end of the day.
The problem essentially boils down to consumers not being prepared to pay a premium for the encounter. Tech In Asia, clarifies the problem perfectly in their own article, on that the Chinese VR boom and bust.

"Enterprising shop owners jumped into VR are finding it impossible to charge fees akin to cinemas or bowling alleys for a VR experience. 1 VR arcade proprietor told iHeima that he saw eager queues when charging US$1.50 for a 30-minute session, but everybody vanished as it rose to US$5. By that sort of revenue it's not possible to pay the lease."
Even if the game was sold out daily, at $1.50 a half hour they're only earning $30 a day.
The real world data flowing in from China must serve as a canary in the quarter plantations of North America. Operators who spend considerable amounts of money on fancy VR setups will probably find their small VR rooms being replaced by the entire world as a stage. As the installations get more expensive, smaller and more portable, the digital arcades will seem more expensive, bulky and restricted.