The phenomenon of virtual reality kiosks or cafés are taking over the Chinese market like wildfire, or so a report via Business Insider suggests. Several companies are putting up brick and mortar arcades for people to get a quickie VR experience for as little as 50 yuan, the equivalent of $7.50.
According to the report, one company called Emax is among several that are driving the consumer VR market this way, creating what they call “VR Experience Rooms” all over the country. Headquartered in Shenzen, the startup has already opened 179 such cafés in China, Hong Kong and Taiwan, and now employs 75 people including those who operate these kiosks. The company has also raised approximately $6.7 million in funding from venture capitalists so far, showing the extent that investors are willing to support this growing trend.
So far there are only around 300 such facilities around China but that number is growing. The interesting difference between the VR markets of China and the United States seems to be that Chinese consumers prefer a pay-per-use model rather than having to shell out hundreds of dollars for their own VR gear. And then there’s the additional cost of a VR-capable PC or laptop that makes the whole deal prohibitively expensive for most people.
In the United States, VR headsets are considered toys for those who can afford them, which is a much higher percentage of the whole population. And that’s the problem every American company faces when it enters emerging markets. The percentage of premium customers is much smaller almost anywhere else expect some European nations, parts of the Middle East and perhaps Japan. Every consumer product company in the United States that has ever been overseas knows this.
As such, these VR cafés offer all the benefits of the virtual reality experience without the high cost of owning the equipment. Taking a page from Chinese karaoke bars or karaoke lounges, these VR lounges provide interfaces similar to digitally selecting a song. But instead of songs, users pick the type of VR experience they want to have, which range from amusement park themes to games and more.
The phenomenon of the VR café will go a long way in this market. Consumers are lapping it up and the number of facilities is continually expanding, as are the types of VR experiences on offer.
This type of entertainment could actually work well in the United States. There was a rumor around two years ago that an entrepreneur called Nick Lee would open the world’s first Oculus Rift café in Boston, but we’re not sure if anything came out of that. In fact, he even started a Kickstarter campaign for this, but only managed to collect about $400 in funding, surprisingly. Perhaps it was too early for it then, but now would be the perfect time.
The initial investment might be a little high, but no more expensive than setting up video game arcades were back in the 80s – remember PacMan? Just like video game arcades were popular in the 80s, VR cafés could easily become a lucrative niche within social entertainment. In fact, it would be a great PR exercise for Microsoft, Facebook, Google or any of the tech majors to get into. The investment would practically be peanuts, but how much value can put on the massive exposure they could get for their virtual reality projects.
Goodbye nightclubs, here I come VR cafés!
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