How To Start A VR Escape Room
A step-by-step guide for how you can create a business plan and implement it to get your VR Escape Room up and running from scratch.
- Are you passionate about VR or Escape Games?
- Does Location Based Entertainment (LBE) business appeal to you?
Passion matters, but by itself it will not equip you to start your very own VR Escape Room from the ground up. We can help.
We have simplified the process into logical steps to help you start your VR Escape Room business.
First, you need to understand the projected market...consider what growth potential the VR Escape Room business has over the next few years.
Why should you go for a VR Escape Room at all?
Technavio research predicts that the Virtual Reality gaming industry will grow by an additional $1.48 billion by 2023.
However, this rosy growth projection is not reason enough to invest in a VR Escape Room as these are a niche within the VR gaming market. So, we need to look at the interest people are showing in VR Escape Rooms.
Google searches for ‘Escape Room VR’ have been growing in the United States as well as globally, which means that awareness and demand is increasing for Virtual Reality Escape Rooms.
VR Escape Rooms are an exciting evolution of an existing, lucrative, and expanding business model, traditional Escape Rooms.
Traditional Escape Rooms grew in number from 22 in 2014 to 2300 in 2019; over 100x growth. And that’s just in America. Globally, that number is estimated at around 10,000.
That, coupled with the immense popularity of VR gaming, indicates that Virtual Reality Escape Rooms have the potential for huge growth over the next few years.
If you are convinced, here is our comprehensive 5-step process to start your own VR Escape Room, divided into 2 parts.
Part 1: Planning - You will draw up an entire plan of how you’re going to get your entire VR Escape Game business up and running from scratch.
Part 2: Execution - You will implement your plan in a systematic way.
Part 1 - Creating a business plan
Creating a business plan is always the first step in starting any business, including a VR Escape Room.
So, what goes into a business plan? How should one go about creating a business plan?
A business plan is meant to be a bird’s eye view of your entire business.
- When you review your finished business plan, you should be able to spot anything you may have overlooked
- If you’re thinking of asking investors or a bank for capital, they’ll want to see your business plan to study your business idea and decide whether it is viable.
- A business plan is indispensable for reviewing your business in case of a setback or if you want to expand
A business plan must include
- The potential market for the
- VR Gaming industry (the general industry); and
- The VR Escape Games industry (your particular niche) in brief
This will help you keep track of market trends and ensure your business plan is comprehensive.
- Your overall strategy
- Target location
- Target demographics - gamers, people looking for VR experiences, corporate bookings etc.
- VR Escape Games you want - tethered or free roam; arcades, VR-only or hybrid
- Brand Image - What kind of impression do you want your premises to project and how you want to design them?
- A startup budget - the time and money required to build your VR Escape Room
- Your operational plan - an idea of how you plan on running your Escape Room day to day
- Your staffing plan
- Game masters - remember, game masters in VR Escape Rooms must be familiar with the use of a computer and running and managing software.
- Receptionist
- Customer service reps - who will field calls and online inquiries, handle bookings and take care of any non-Escape Room requirement of your players at your venue
- Marketing team - who will create your marketing plan and handle your day-to-day marketing (email, social media, website etc.)
- Management team - who will oversee the running of the Escape Room?. At the startup stage, the management team will likely be only you and your co-founders
- Ancillary staff - like Janitors
- An operational budget - an estimate of what amount of money will be required for the day-to-day operations of your VR Escape Room.
- A fundraising plan - common funding sources for a VR Escape Room startup would be
- Your own money
- Loans from family and friends
- Loan from a bank
- Funding from angel investors - private individuals looking to invest in profitable ventures
- Revenue and expenditure - Projections based on expected utilization and ticket price
- Financial Timelines - An approximate timeline of how soon you think you can
- Break even
- Pay back your loans
- Return your investors’ money
- Be able to expand
Now that we know what to plan for, let us see how one can plan systematically.
Step 1 - Study your competition
Whether you want to do it their way or your way comes later.
If your competitors have been around for some time - that could indicate that their business model works. So, study them for clues as to what they’re doing right and look for areas where they are not as successful as they could be.
Who will ultimately be more successful will depend on your skills as an entrepreneur and on your luck vis-a-vis theirs.
Step 2 - Selecting the kind of VR Escape Room you want to open
There are 3 major formats.
VR Arcade
The phrase ‘arcade game’ typically refers to games that are publicly available and operate in a ‘pay to play’ format, which means that you pay a certain amount to rent the gaming booth or console for a set period of time during which you can play any game available in your booth.
An arcade concept does not include any need to pay for any game in particular; the player pays to rent a booth for a set period of time and not a specific game (in most cases).
In the VR Escape Game context, the setup is that you have multiple VR stations, all of which offer your entire VR game library.
People pay you to rent a station for themselves and they can play whatever they want. Generally, these kinds of VR games can be licensed either directly from developers like vrCAVE or Ubisoft or from distributors like Steam, SpringboardVR, or Synthesis VR.
Your customers will most likely be people who don’t have VR equipment at home but you may also attract some VR aficionados as customers so you will need to get a variety of very popular VR games and unique location-based games for your VR Arcade.
VR arcades are in some ways following the path of the video game arcades of the 1980s. And, just like the video games arcades of the past, VR Arcades often explore multiple revenue streams by opening other gaming activities like laser tag and/or adding food and beverage options.
Many arcades are located in places with high foot traffic, like malls, to get walk-in players.
Finally, Arcade VR Escape Games franchises like Entermission are available, if you’re thinking of starting as a franchisee instead of as an independent business.
Pros
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VR Arcades are very economical space-wise. You can set up multiple VR stations within a short distance of each other because people remain at their own stations
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VR Arcades are very economical space-wise. You can set up multiple VR stations within a short distance of each other because people remain at their own stations
-
VR Arcades are very economical space-wise. You can set up multiple VR stations within a short distance of each other because people remain at their own stations
Cons
-
VR Arcades are very economical space-wise. You can set up multiple VR stations within a short distance of each other because people remain at their own stations
-
VR Arcades are very economical space-wise. You can set up multiple VR stations within a short distance of each other because people remain at their own stations
VR-only Escape Rooms
VR Escape Rooms like that of Bane Escape and Ubisoft are more like a traditional Escape Rooms.Teams pay to rent out an entire room.
Each room may have a single VR Escape Game or a menu of games but in this case teams don’t rent one VR station in a large area; they rent an entire room.
Typically, these kinds of Escape Games are designed to accommodate a maximum number of players at a time, just like a traditional Escape Room.
However, this is where the similarities with a traditional Escape Room end.
Whereas a traditional Escape Room would contain a real-life game space with real physical objects and puzzles, a VR-only Escape Room has only chairs for the players to sit on, VR headsets, controllers and headphones and the escape elements exist only in the virtual worlds.
Pros
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Physical haptics, environmental effects like wind, heat, and smell make this format more immersive than VR Arcade Escape Games (Not all VR Escape Rooms are able to offer this)
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It may allow for more complex interactive games that require real time communication between players.
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Because teams have the entire room to themselves and they are in shared experiences, team communication and team bonding is enhanced in VR-only Escape Rooms
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It will appeal to both people looking to play in immersive VR experiences as well as more experienced Escape Room players
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VR Escape Rooms by nature require smaller space to setup games, however Entermission VR Escape Rooms can be setup in 1/4th the space that is required by normal VR Escape Rooms.
Cons
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As with all things technology, there can be functionality issues from time to time, which may require you to keep a technician on standby
Hybrid VR Escape Games
These are still VR Escape Games, but enhanced. These Hybrid VR Escape Rooms take immersion a step further by adding real world aspects into the gameplay.
For example, if the game has players experiencing an explosion, their gaming chairs can rumble with the inclusion of physical haptic devices and they can feel the wind and heat on their faces. They can even smell realistic scents in the air, such as gunpowder or smoke.
The players are still in the virtual world, wearing their headsets but the real-world input boosts immersion immensely because it activates their senses.
Typically, these Escape Games (like Bane Escape), would embrace the ‘free roam’ concept - the equipment is completely wireless and the players can roam the room freely, further boosting the immersion.
This kind of VR Escape Game can be described ‘multi-sensory’ since it tries to engage multiple senses of the player; they are also called ‘hyper reality’ by The VOID.
Pros
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The immersion is of the highest level
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The possibilities for game design are the widest, players can fly, solve interactive puzzles, explore amazing worlds
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Even with cheaper equipment, the chance of this being replicated in a home setting is remote - because of the extensive space you need.
Cons
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It is still a developing concept. Most people have not experienced good VR, so they may not realize the immersion potential of Hybrid VR Escape Games.
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Typically, the rooms required are larger (Bane Escape, Ubisoft, Escape Virtuality etc) to enable players to take full advantage of the ‘free roam’. In other words, you need to give players more room to walk around in. This isn’t the case with VR Escape Rooms like Entermission that require as little as 170 sq ft, to setup a 6 player game.
Step 3 - Selecting a location
One of the first considerations is determining where you’re going to locate your VR Escape Room.
What factors should you consider when selecting a location:
What kind of foot traffic does it have?
In an area with existing, high foot traffic, you can expect a high percentage of walk-ins. This is particularly important for VR Arcades.
A high foot traffic area could also lead to more brand awareness.
It’s also more likely that there are a lot of public transportation options that players can use to reach you.
What kind of facilities does it have?
Common public facilities are great assets to help any business attract customers.
The facilities you should consider are
- Ample car parking options
- An elevator, if you’re not on the ground floor (as unlike physical escape rooms, VR Escape Room options like Entermission which offer a sit-and-play option can cater to people with disabilities)
- Accessible to local area, proximity to main roads
- Wheelchair-friendly access
Is it an area with a lot of offices and corporations?
Having a lot of offices and corporations near you could work be good to bad.
- On the plus side, the people working in those offices may be candidates for booking a company event or a team building event
- On the negative side, rents are likely to be higher in such an area
PRO TIP
When you are looking at rents, make sure that you compare it with your expected profit per sqm/sq ft. More on this later.
Is it near a university that teaches, programming and/or marketing?
If you set up shop near such a university, look into whether you could offer internships to students
- The students get a paying gig and real-world work experience
Who knows, some of them might end up becoming great future employees.
Is it an area with other entertainment centers?
Once again, this can work both ways.
- On the plus side, you may be able to network with the owners of the other entertainment centers, developing an arrangement to refer customers to each other or cross promote your businesses
- On the negative side, you would be competing with these entertainment centers to attract the same customers.
Can the site house your VR Escape Room equipment?
For a VR Escape Room you will need to account for having adequate dedicated space to house a bunch of electronic equipment (like VR headsets and backpacks) and high end computers/servers.
This hardware will need to run smoothly and you need to protect it from getting overheated. So, you need to consider ventilation when selecting your location. Or you may need to run a cooling system constantly.
Will you be able to expand?
Sooner or later you may want to expand your VR Escape Room. You may want to add more games; or increase capacity; or add other facilities, depending on consumer response and feedback.
This is something you should plan for in advance, right when you are selecting your location so that you don’t find yourself quickly outgrowing your premises.
Finally, look for these features to cut costs
There are some features that a VR Escape Room does not need and a location without them could cost less.
- Few to no windows - you don’t want your game rooms to have windows
- Basement - there is nothing wrong with having a basement Escape Room; in fact, if you have a horror or thriller theme, you can make your basement location a part of your appeal
- In need of refurbishment - you’re going to decorate it anyway to fit your theme so you may as well look for a barebones location to drive costs down
Step 4 - Selecting your VR Escape Room games
Which VR experiences are best for a VR Escape Game business?
The answer depends on what kind of customer you are expecting:
- One demographic will be players who have had little to no VR experience. They would likely be happy with any VR content you provide.
- The other kind would be the Escape Room aficionados who would be very picky about the kind of game they play
As VR headsets and other equipment becomes affordable over time,you may need to continue to innovate to provide something better or different from what people can do with their home VR setup.
Escape Room enthusiasts may find a typical zombie VR game bland is it doesn’t include puzzle-solving and creative collaboration among team members.
Do you want to consider licensing or franchising?
The fundamental difference is that you can acquire individual games and develop a unique theme for your own VR Escape Room on license; if you go for a franchise, however, you need to follow the often strict guidelines required by the franchisor.
There are a lot of legal differences between the two and that can vary according to jurisdiction.
Typically, a franchisor may assist you in a number of areas, including technical help, training for your employees, site selection and rent negotiation, marketing and so on.
A licensee on the other hand will mostly concentrate on technical assistance.
The primary question you need to ask yourself is this: how much assistance would you want or need in setting up your Escape Room?
If you have business experience; or if you’re very independent and want to launch something that’s completely yours, you should go for licensing.
On the other hand, if you want extensive guidance through the process of setting up your very first Multiplayer VR Escape Room, you should explore franchising.
PRO TIP
Just like with any other entertainment center, you need to offer games that absolutely enthrall players and make a very compelling case for them to return to and refer your VR Escape Room to their friends.
Demographic factors and adding new games
You also need to appeal to various demographics from newbies to veterans, from group of college kids to corporate groups, as well as attracting a range of ages if you can.
Finally, try to connect up with a VR game developer who keeps releasing new games on a regular basis.
One of the biggest advantages of having a Virtual Reality escape room is that you can introduce a new game simply by installing the game on your VR equipment. You will not need to get new hardware every time you introduce a new game.
If your game developer keeps releasing new games periodically, you can choose which ones to include at your VR Escape Room.
The barrier to entry in the VR gaming industry getting lower, so unless you can offer fresh content periodically your VR Escape Room will not maintain the competitive edge it needs to defend against your competitors.
Game developers are going to great lengths to create compelling content
A game called Keep talking and nobody explodes has a scenario in which players need to defuse a time bomb The catch? Only the player handling the bomb can see it. However, players with the manual on how to defuse the bomb can’t see what the bomb guy is doing.
Now, you might think most people would get frustrated a few minutes into the game because they can’t see what the guy defusing the bomb is doing. Or you might think that this is just a gimmick with no content value.
However it is that very nature of the game - it is highly social and collaborative and provides a chance for players to create strong memories because they need to maintain clear communication while remaining calm - which makes it immensely popular with a lot of players.
This gives you some idea of the demand for creative, compelling content.
Step 5 - Plan your premises
Your marketing is not limited to paid advertisements
Marketing occurs at every point where the player interfaces with your Escape Room.
The entire Escape Room premises - beginning from the reception area and ending where the players emerge victorious from their escape game - is an Escape Room-player interface, which means you need to plan your entire decoration carefully.
You can easily hire painters to splash some paint on the walls.
- But, do the walls set the tone for your Escape Games?
- Do you think they will set the mood for an exciting VR Escape Game?
- Does it convince waiting players that your Escape Games are worth waiting for?
All of these are considerations for planning your VR Escape Room premises to maximize player immersion.
There are some technical considerations
If you’re going for free-roam VR, meaning the players can walk freely around untethered to the hardware, you need to make sure that the walls of your rooms are padded so that players can’t hurt themselves if they collide with a wall
If you’re going for an arcade format, make sure that each team is separated from the ones on each side. That will boost the player experience.
In the arcade format, you also need to ensure that there is no interference from the tracking equipment (base station) at the individual VR stations.
Step 6 - Plan your finances and fundraising
As with any startup business, you will face two kinds of expenses in getting your VR Escape Room up and running:
One time costs like:
- The cost of obtaining whatever permits you need for your establishment
- The cost of acquiring the games - whether you buy a license or run a franchise, you may need to make an upfront lump sum payment
- The cost of building and decorating your VR Escape Room
Running expenses like:
- Rent
- Utilities
- Payroll
- Recurring license or franchise fees
- Insurance premium - Workers’ compensation insurance is mandatory in many jurisdictions
One of the things you need to decide here is whether you’re going to license games of your choice or whether it’ll be better to open a franchise VR Escape Room.
When you decide ticket price, you need to consider:
- Expected number of players per game - your games provider will give you an estimate of how many players can fit in what area, for example, Entermission’s games allow 6 players to play in 170 sq ft.
- Whether you want to incorporate any discounts - some discounts like military/veterans’ discounts are very popular and can boost your brand image
- Your projected cost of running the operation
As far as options for raising startup funds are concerned you have 4 options:
Your own money:
Your own money may not be sufficient to start a VR Escape Room, however it is still important to invest some of your own money because:
- It’s NSA (No Strings Attached)
- It’s a sweetener for other investors; they’d be comforted to know that you have your own “skin in the game”
Loans from family and friends:
Typically, these would be informal ‘soft’ loans.
Generally speaking, these share the features of your own money - NSA and sweeteners for other investors - although you may offer joint ownership or a partnership in exchange for the money.
Bank loans:
Banks provide both startup loans and working capital loans. The former is for when you’re building your Escape Room and the latter is for when you need financing for the day-to-day operations.
Banks will need to see extensive business plans and have a detailed discussion with you on your business model before they approve your loan.
Angel investors:
These are private individuals looking to invest their own money in ventures they think are worthwhile.
While banks, generally speaking, look for profit and risk projections, angel investors might be investing with more goals in mind - having a stake in a VR/gaming business,- rather than just profit and risk.
It will be good if you can gauge their angle (why they are interested) and pitch your business accordingly.
PRO TIP
If you are thinking of raising funds from banks or investors, you should create a professional business plan that they can review.
Score, a resource partner of the US Small Business Administration, has a business plan template that you can use to draw up a formal business plan that meets current professional standards.
Step 7 - Your marketing plan
You may get some marketing assistance from your games provider, however, you should keep the following things in mind when planning your marketing:
You need to target specific segments
- You can target VR enthusiasts
- You can target traditional Escape Room fans by stressing how immersion is taken to a whole new level with VR; the kinds of puzzles and tasks they will face are much more varied.
- You can target people just looking for a VR experience by revealing the range of virtual activities they can do - whether it’s shooting mythical weapons or flying in space.
- Finally, you can target groups looking to organize a team building session by emphasizing how Escape Rooms promote teamwork and communication.
You need to sell an emotion
If you’ve marketed an Escape Room before - whether a traditional one or a VR one - you know that the expectation of an awesome experience is what clinches a booking.
So, make sure that the reactions of players while playing and after finishing figures prominently in your marketing.
You need to explain how VR expands the player’s abilities
- One, in VR people are able to do spectacular things - like spacewalk or shoot fire from their hands - that they can’t do in real life.
- Two, with VR, someone in a wheelchair or someone with limited vision or hearing may be able to take part in the experience.
Remember digital marketing
This is much more than just having a website. You will need to consider planning for - seo, paid traffic acquisition, social media management, email marketing, content marketing and reputation management. This is where firms like SEO ORB can come in handy.
You will need to ensure that your existing marketing team is prepared for this activity or you may need to consider expanding your marketing resources to address the new opportunities.
Part 2: Execution
The planning completed, it’s time to implement it and set up your VR Escape Room.
Step 1: Register your business
You need to register yourself as a legal business entity.
You should consult an attorney for this, in order to review the different options for business entities for your new endeavour, such as becoming an LLC (Limited Liability Company).
You may also need to apply for a business identification number to the revenue authorities. For example, in the United States, you need to apply for an Employment Identification Number with the IRS.
Step 2: Negotiate with a VR Escape Games developer/distributor
Why does this come so early on in the execution process?
Because, generally speaking, developers and distributors provide some help with setting up your Escape Room.
- If you sign up as a franchisee, you get extensive help with your premises, marketing, staff training etc
- If you acquire games on license, you will mostly be eligible for marketing and games-related staff training
It is better to know early on, exactly what kind of help you can expect from the developer/distributor.
Step 3: Sign a rental agreement and obtain the various permits you need for your buildout
Licenses, permits and legal requirements for an entertainment center will vary from jurisdiction to jurisdiction. You may require some assistance to understand what you need.
Nevertheless, you need to deal with it and fulfil all your legal obligations.
Step 4: Build your VR Escape Room
You may choose to hire a designer for this but you need to remain in charge, since you likely have very specific design requirements..
You should also have an idea of your hardware and electrical requirements so the required wiring can be planned.
Make sure you remember the technical requirements like accounting for the walls to have padding so that players won’t get hurt.
Step 5: Set up the games
It’s time to set up the games.
Bring in the hardware. Some may be provided by the developer/distributor but you will need to acquire other hardware yourself (a checklist can be obtained from the devs). Typically, per game you will need
- One base/central PC for the game master
- One backpack (depends on what types of games you choose), one headset and set of controllers per player
You will also require one main server.
Next, the games will have to be uploaded onto your systems and you will have to understand how to operate the entire setup.
If this sounds confusing or daunting, don’t worry, your developer/distributor should take their time to explain everything to you.
PRO TIP
At this stage, you should remember to ask the developer/distributor if there are any restrictions on who can’t play the games.
Generally speaking
- Pregnant women can play VR Escape Games.
- For people with epilepsy - it depends on the game
- As far as age limits are concerned, children who are 10 and older should be allowed. Limitations on maximum age would be game-specific.
- People in wheelchairs should be able to take part in these games.
- People wearing glasses may experience some problems since thick glasses may not fit inside the VR headsets (and glasses can scratch the inside lenses of VR headsets)
PRO TIP
The VR backpacks weigh around 7lbs and they are designed to minimize the load on the player’s back.
Step 6: Hire your staff
You can contract out some services like cleaning and maintenance.
However, as far as core staff like game masters, customer service reps, receptionist etc are concerned, you should hire them directly.
Games Masters
- For an arcade setup - You should start with 2-3 game masters depending on your location size and increase as per your requirement
- For a VR-only setup - You should start off with one game master per game. And then, depending on how it works out, you can allocate more than one game per game master.
- For a hybrid setup - One game master per game is optimum
Also, please ensure that your game masters can
- Provide timely hints on request.
- Enable the player to skip a part of the game if they request.
As far as hints are concerned, they can be built into your VR Escape Game.
Typically, with inbuilt hints, and games masters able to move players into different sections of the game via a computer, each games master can look after multiple games.
Receptionist
They need to welcome players into your Escape Room premises, sign them in and usher them into the waiting area from where the game master will take over.
The receptionist must be a “people person”, able to maintain a smile and not lose their temper easily. They are the front line for your business and they are there at the start and end of a player’s experience, so they are crucial to their happiness and your success.
Customer service representatives
They should be able to
- Field calls
- Answer online inquiries
- Handle booking requests
- Craft and send emails to players if necessary
Fluency in English and Spanish, proficiency in MS Word, MS Excel, Google Drive, email would be the kind of skills that could come in handy here.
Marketing team
The marketing team should be responsible for:
- Creating a marketing policy
- Designing and maintaining your website
- Creating and handling your social media profiles
- Running your day-to-day marketing
- Reaching out to
- Companies for corporate bookings
- Investors (if you want)
- Online and offline media to feature your firm
- Drafting press releases
- Handling the marketing budget
Step 7: Train your staff and work on your facilities
You will need to maintain certain facilities within your VR Escape Room, such as:
- A game master’s override which would allow them to adjust or stop the game if necessary (for example, stop the game immediately if a player\experiences discomfort or any medical concerns).
- UV cleansing wand and cleansing spray / wipes to clean the headsets - hygiene is critical
- Back-up face foam for VR headsets, equipment and cabling to replace items that are damaged by customers or due to wear and tear
Your staff will need to be trained
- How to make players feel welcome, how to field phone calls and so on.
- How to respond to an emergency like a player falling ill or an electrical blackout.
- How to deal with players who arrive ‘under the influence’
- The game masters need to be trained in handling the VR games - normally the developer/distributor arranges for this training, at least initially
Step 8: Set up your website, social media profiles and your online booking system
Whether you are the one setting up your website, social media profiles etc or it’s your marketing team who does it, they need to be up and running before you can formally launch your VR Escape Room.
If it’s your marketing team that’s handling website design, have a sit-down with them to draw up a blueprint and design plans for the website.
Next, it’s time to choose an online booking system.
Some of booking systems we like are
- Escape Assist
- Peek
- Bookeo
- Resova
- Nowescape
- Zozi
- SimplyBook
- BookingBug
- Xola
And Finally: Go for a test run
Once your VR Escape Room is up and running it is time to set up for a test run, starting from booking.
Invite your family, your friends and your investors (if any) to book escapes and play the games at your new VR Escape Room.
Observe carefully to spot any deficiency/weakness and also ask them for feedback.
And, finally, you are ready to launch your very own Virtual Reality Escape Room!