03-20-2017 04:34 PM - edited 03-20-2017 04:43 PM
Hey @Radek, you make some excellent points and I appreciate the continued discussion!
Wanted to cover a few things. You're absolutely right that VR over time will become less and less 'new', but I hope that we're going to see more and more innovation in software, so that Vive will continue to stand out and be different thanks to (we'd argue) the best room-scale setup around. Right now we're seeing a lot of similar titles in some specific fields (wave shooters anyone?) but over time, I think we'll see 'best in class' emerge and become definitive experiences. At that point, as it tends to do, the market will move forward and we'll see innovation building on previous innovations. (See, for example, the progression from Wolfenstein to Doom to Quake to Half-Life.)
You're also right that profits will come from players who want to spend a lot of time in VR, who make repeat visits and so on. That's why we're trying to push that 'repeat play loop' with developers who are interested in creating VR content that's arcade focused, and we're trying to get content into arcade that encourages people to come back again and again; whether it's to have the experience again (perhaps multiplayer?) or to continue in something they previously started (ie, a project in VR).
It's important to note, regarding subscriptions vs arcade, that while there may be crossover between the two we can't guarantee that every title available will be available in both places. Some titles may be available for purchase only, some may be subscription/purchase only, some may be arcade only, or any combination of the three. It's unlikely that a title available in the arcades won't be available for purchase, but in some cases, that could be true.
Setting aside for a moment the fact that our terms of service regarding subscriptions won't allow you to 'publicly exhibit' (in the same way a Netflix sub doesn't allow you to show content from there and charge admittance), there are limitations on subs that might not suit an arcade owner. In your example of the arcade owner just having the hardware, you'd fall right into the 'public exhibition' problem.
If you chose to buy subscriptions for an arcade rather than opt into the platform - which again is against the terms of service, but just as an example - then you'd still have issues. You'd only have access to five titles per month, per subscription. Granted you could buy a lot of subscriptions, but you would have to juggle a lot of accounts. In addition you'd be fixed on a per account basis. Say for example you had ten subs, and you had Stonehenge VR on all ten - what if an eleventh person walks in and wants to experience it? You can't do it.
With arcade, you have access to a lot of titles, and any of them can be used for as long as you want without restrictions, except time.
(I realize re-reading your comment you may not have been aware how subscription works. In a nutshell, that's it. Access to five titles per month; you choose which five, from a selection available to you. So it's clearly limited in choice vs arcade.)
03-21-2017 08:01 AM - edited 03-21-2017 08:06 AM
@Rockjaw Hmm... I send my answer about 1 hour ago, it was visible, even I edited it little bit to correct some misspeling... and it disspaear just now, do you have any idea what could happen?
Also, I guess, you have this post in your emial, as it is attached to forum new post notification, so if possible coudl you send it to me, so I can send it again, without rewriting everything? Aalos if anyone else has this post in email notification, please forward it to me.
Thank you in advance!
03-21-2017 11:05 AM
Hello @Rockjaw, thank you very much once again for help with my lost post recovery and also again thank you for your previous answer. I repost my previosu post again bellow.
You’re right, I didn’t notice that individual subscription is only 5 titles per month. Good news for VRcades. I have one more question about details, am I right that 10eur/hour is price without VAT, so actually it is going to be for example in Spain, 10eur + 21% VAT / hour so 12,10eur/hour?
I also wanted to make one thing clear. When I was writing about arcade operator who just rent hardware and place, not software I really mean that. What if customer come and just login to his own account on Steam and play the game he has on his own account? For sure it is not “public exhibit” (especially in VR, quite private experience), he just rent a place and play his own game. If compare with Netflix, is like situation when I’m in hotel room and there is TV with Netflix software, they can’t use “hotel subscription” but they can just put TV with Netflix, and if only I have my own account I can login and watch movies. With games, in some cases, it is quite natural, for example Elite Dangerous, it is great game without VR, but even greater in VR. I can easy imagine someone who spend hours in not VR version in home, would like to test how it is to fly his spaceship in VR and using own account is only way.
And continuing about private vs commercial subscription, even if private is only 5 titles a month, still if someone want to spend in VR for example 1 hour and he has a choice, pay for example 15eur/hour for renting hardware and place plus 12,10eur/ hour for software (together 27,10eur/hour) or he just can pay 15eur/hour plus 6,99eur …. Even if he spends just 1 hour, it still only 21,99eur, so over 5 eur less, but what if he wants to spend more than just 1 hour a month? What if he shares his account with any of his friends? Also, let’s forget about private subscription, with this price, if someone want to “master” any game and play it more than just once, more than 1-2 hour in lifetime, it would be better for this person to buy this game on Steam and come to VRcade with his own copy, than pay additional 12,10 eur/hour. The point is, that I didn’t mean to use private subscription by arcade owner (of course it would be illegal), I mean with this high commercial price even if each customer has his own private subscription and use it just for 1 hour play, still the price is better.
You know, I have a feeling that somewhere during all prices calculation someone forget about end customers who are going to pay all costs and how much maximum they can pay. When you check prices in different VRcades in European Union, it seems that the average price is 20-25eur/hour, let’s be optimistic and use 25eur/hour. This is VAT included (in EU average is 21%) so 20,66eur/hour left.
Now basic monthly cost calculation. VR needs space if we want high quality experience, minimum 9m2 for 1 station, lets imagine not very small not very big, 8 station VRcade. It needs 72m2 just for play area, but you need corridors, walls, you need waiting area, you need toilets and usually the dimensions do not fit perfectly your needs (especially when you need to take care of laser licking problem) so to have 8 stations, you need about 150m2 place. In big city in Spain, in not perfect, but fairly good location such place costs about 2500-3000 eur/month . You need stuff, 8 stations, I believe minimum 3 persons would be necessary to make things fluent. About 1500 each (included insurance, taxes and other things like that). Together it is 4500 eur/month. Now some additional expenses like electricity, internet, water, security alarm, insurance, accountant… let’s say all together about 1500 eur/month so we have 8500 eur/months optimistic basic costs.
Continuing… the initial investment, again quite optimistic. For sure local needs some refurbishing, adjustments plus to start activity in entertainment area you need some special projects and some special adjustments to get license (like for example toilet for handicapped). Let’s be optimistic and say those costs 25000 eur. You need hardware, it spouses to be something not the basic one, something in the middle, to give people better experience but still have good price, and do not change it in few months. With HTC Vive Business I guess 3000 eur/station, so 24000 eur for 8 stations. Initial costs together are about 49000 euro.
Now let continue with profits, you have 8 stations, open 28 days a month, and again be optimistic, lets say you sell each day 4h on each station, so 28x8x4x20,55eur=18412,80 eur but licenses in subscription costs 28x8x4x10= 8960,00 eur so only 9452,80 eur to pay monthly costs 8500 eur so lucky you still have profit almost 1000 euro… with this profit in 4 years you will get back your initial costs (49k euro) or you don’t? Because even if you invest in ferly good hardware you need to change all in about 2 years (or even faster, when new better version of HTC Vive will be on the market) and I guess during 4 years you need to refurbish your place…
And all those calculations were without unexpected costs which for sure happen, how often something break? I guess in such intensive use, when people sweat a lot, HTC Vive may have problems… and how about other incidences. How for example about expenses for advertisement? How about other expenses I probably forget here?
Anyway, as you can see there is no chance to keep current popular price 25 eur/hour and use HTC commercial subscription as a main source of license. Of course, prices may rise, but customers will vote with their wallets and just not come, there is a reason why now the price is about 25 eur/hour and will drop down probably in the future. If it was possible to charge more, for sure people would charge.
But this license price 10eur/hour is just too much, in this calculation, each station license costs about 1100 eur/month. Is any game worth it? I think currently the most expensive commercial license for 1 tittle (Raw Data in Deluxe Arcade Version) costs about 100 eur/month (or even less if their price drop downs), so 10 time less… OK, it is just one tittle, but in 1 minute 1 customer play only 1 tittle, so ok, I could imagine that it would cost for example 200 eur/month for station, double the most expensive license cost, but 10 times more… it is too much.
As I wrote before I hope someone will reconsider prices, I guess not before official start, but at least fairly son, when you see how people vote with their wallets. The idea to charge for time is very nice, it could help the business grow, it could help smaller developer to get some income if they create something interesting, but with those prices it does not change anything. Now it seems average Steam commercial price is about 40 eur/month, so if arcade owner expecting to sell more than 4 hours of play/station, it is better to use Steam, and really, I’m sure top, popular tittle will sell more hours than just 4, and those less popular… who care, they not have to be in the offer.
The solution could be one additional subscription option, for example 200 eur/month/station flat rate without time limit, it could give quite nice money for HTC and for each developer to share according to used minutes, and same time final price for end customer could be on acceptable level.
07-19-2017 05:05 AM
Hi Stephen @Rockjaw, is the Viveport arcade forum open yet... would like to add some comments which I don't want public. We've been running thevrhub.co.uk for a few months now and can give some insight into pricing. I think we've got out pricing about right as I worked out what other activities like bowling, going to the cinema or paintballing cost on a per person per hour cost and our £15/hour per rig base price is about right if you consider you can share it and take turns. We can lower pricing from this if a group comes in and takes 2 or more rigs as we can take less staff time explaining the kit, and 1 staff member can supervise both rigs in a room instead of having 1 per rig.
These prices are sustainable even with Steams's quite pricey license fees as long as we keep the number of titles per rig down. If we had to pay €10 per hour per rig on Viveport, that's €20 of our £25 mulitplayer session fee gone. Thats £17.69 at current exchange rates - assuming we don't get the usual $1=£1 conversion Thats a non starter for me. Having only about 7 titles on a rig isn't a problem for customers - even those with the shortest attention spans are finding the mix we've created more than enough to keep them busy and we're now starting to get repeat customers.
07-19-2017 05:17 AM
To add 1 more thing.. we're getting group bookings now for up to 2 hours. We currently quote people £40 on a 2 hour 2 rigs party booking for up to 6 in the small room as it would be an exact 2 hours - not the usual 1h15 as people do "have enough" at around that length of time. Even when swapping in and out to take turns. With 2 rigs for 2 hours we'd be lookng at €40 of Viveport fees, leaving nothing to cover Rent and other overheads. With Steam licensing we'd be running a profit if we can fill all our weekend slots. But with viveport pricing we'd have a massive loss. That should ring some alarm bells.
07-19-2017 05:15 PM - edited 07-19-2017 05:17 PM
I'd also like to be added to the arcade forum. Thank you,
I feel that @Radek hit the nail on the head with this, particularly in his last paragraph "The solution could be one additional subscription option, for example 200 eur/month/station flat rate without time limit, it could give quite nice money for HTC and for each developer to share according to used minutes, and same time final price for end customer could be on acceptable level."
From thoes I have contacted in the VR industry about commercial use it seems almost every one of them is doing a small flat monthly fee. In fact 90% of them are doing $100 per month per unit. while they are doing equipment and not the games it seems that that is what the industry is paying. it's very simple that something is only worth what someone is willing to pay for it.
at $200 per unit per month assuming an arcade is using 10 vives thats $2,000 a month in fees. This would be a normal and reasonable business expense.
Going by the $10/hr route, assuming the same place is using each station for 5 hours a day for 30 days in a month that equates to $15,000 a month in fees.
Going by that model its a no brainer to go with Steam when I've frequently seen people post that they are spending upwards of $6,000 a month in fees to them.(and to be honest they are actively trying to get out of that)
Now lets flip this around as a plus side for your business aspect,
say the same place has a horrible month. they only sold 20 hours of game play for the month. thats only $200 to you VS having a flat steady income regardless of hours used