As VR arcades begin to spread in certain parts of the world, questions have naturally arisen about viability of those arcades. Will they be temporary novelties or will they become sustainable businesses? One way to gauge the potential of these arcades is to analyze models that are working, or could work in the short term. One of the most compelling models for VR arcades is being developed by Ctrl V in Waterloo, ON, Canada.
Ctrl V has developed a multifaceted business approach that involves extensive testing of VR games and experiences, pooling of resources with an educational institution, judicious expansion into such new markets as movie theaters, creation of a healthier facility and the development of a convincing internal user interface. Ctrl V's attention to details in its operation speaks to its commitment to developing a first-class, robust business.
Kevin Williams, founder of out-of- home interactive entertainment consultancy KWP (London), contends, "Ctrl V has nailed down a brand and presentation that [hopes] to set a model that a franchise can be built on. They have embodied the approach of early LAN center developments, with the audience renting time within one of the arcade's 16 custom built VR stations. The company has undertaken to create [its] own unique delivery system for game content, establishing licenses with each content provider to gain a cut of the revenue generated."
In addition to Waterloo, Ctrl V operates a VR arcade in Guelph, ON, and plans to open eight more over the next year in Alberta, Saskatchewan and British Columbia. The company chose the Vive immersion system for its facilities because of its "much larger selection of content, elimination of latency problems, and built-in features preventing users from running into real walls," explained Ctrl V chief executive Ryan Brooks.
Ctrl V offers 30 game titles at its arcades. They include Job Simulator, Space Pirate Trainer, Smash Box Arena and Universe Sandbox. Job Simulator and Smash Box Arena have been among the most popular titles, and the multiplayer games have been particularly popular, Brooks reported. The arcade has attracted a steady stream of customers. According to the Ctrl V chief, "over 13,000 unique customers have visited the Waterloo arcade." Customers are charged $25 an hour (Canadian) to play games in the arcade.
ON LOCATION: Ctrl V is a network of physical virtual reality stations, shown here at the operation's Waterloo, ON, location. The custom-designed VR stations feature HTC Vive gear and systems to create high-end immersive experiences in different games.
Unlike most arcades, Ctrl V doesn't license content on a monthly basis because of its "lack of economic viability" and belief that it doesn't ultimately serve content developers well. Rather, the company "licenses content per minute of play" to improve cost efficiency at its arcades and reward developers of better performing content.
Surprisingly, Ctrl V's customers are older than expected. About 45% are over 26 years old and just 20% are between 18 and 25 years, Brooks reported.
The company has made a major move in Canadian movie theaters through partnerships with Landmark Cinemas and Cineplex. The company ran a three-month pilot with four VR game stations at Landmark's Waterloo theater in the fourth quarter of 2016. Ctrl V has also added VR game stations at Cineplex's Rec Room across from its theater in Edmonton. According to Brooks, movie theaters have become greatly dissatisfied with declining revenues from "older arcade games," and are seeking newer, more exciting games "to include in their venues." He added that most movie theater chains in Canada are exploring ways of integrating VR into their facilities.
The company is exploring presenting immersive films at its arcades, but Brooks doesn't see many compelling opportunities for such films in arcades at the moment.
Ctrl V is making a special effort to expand its content beyond games, especially through a partnership with the University of Waterloo to research new non-entertainment applications and equipment, such as "preplanning architectural projects, concussion research and prototyping new hardware peripherals" to generate key customer feedback about that equipment and those applications, Brooks said.
Although it's too early to judge the long-term success of Ctrl V's arcades, the company is carving out an intriguing business model that has strong implications for the future of VR arcades and amusement operators.
VR arcades are spreading more rapidly in Asia, particularly in China. Viveport, a VR hardware company, and Alibaba, an e-commerce giant, are reportedly opening VR arcades in Asia. That continent has historically been more receptive to games featuring new immersive technologies, so demand for VR arcades is high. On the other hand, VR arcade activity in North America has been much more limited. In that context, Ctrl V has been a pioneer.
MICHAEL MASCIONI is a freelance writer on digital entertainment and other topics for such publications as Inter Park, Technical.ly and Innovation & Tech Today. He also does market research on digital media and digital out-of-home interactive entertainment; clients include Triotech, Imax Corp. and Thinkwell Group. He is coauthor of The Out-of-Home Immersive Entertainment Frontier. He also is co-chairman of the 2017 Future of Immersive Leisure conference.