So, You Want to Start a VR Arcade…

… and how to keep VR game developers happy

With the growth of VR over the past 16 months, we’ve also seen the growth of VR Arcades. Places where people can go, pay some cash and rent a VR Headset for set amount of time and play a library of games — hearkening back decades to the arcades of old. They’re still young and growing, but there is promise for VR Arcades.

(If you’re looking for information about VR Arcade Hardware, Headsets and how to get it all, check out the next part of this articles series!)

So, if you’re the type of person who wants to jump in on the VR arcade ownership action, this is a quick run down for you. Developers! Read this too, as there are things you should be doing too! It will not cover what types of games to put in your arcade — that is for you, the arcade owner to decide. This will however, go over things that you may not know, or things that you should absolutely do if you’re an arcade owner and want to properly use games with your arcade.

An Update on the Arcade Landscape

Psst. Hi! Future(ish) me here. As of writing this section, it’s March 5, 2018. Things have changed in the VR Arcade licensing landscape and I felt that this article was in need of an update. I’m going to leave the information here as it is (Ok, I made a bunch of edits, but it’s all still mostly the same), as it’s good to know, but there’s been a change in how best to manage software at your arcade — and that is: Getting someone else to do it for you.

In the past 6+ months (wow, I wrote this article that long ago?) there’s has been a big growth in VR Arcade “operating systems” — that is, a basically an existing library that you can pull titles from to play locally at your arcade. These systems handle all the licensing and payment info that I list below for you, and provide a nice back-end for your library collection.

Of the systems that are out there, I recommend looking at SpringboardVR, Viveport Arcade and Steam. I mention Steam directly below in the “Steam Site License” section. Viveport Arcade has an hourly fee, SpringboardVR charges you with a pay-per-minute fee set by the developers. I highly, highly suggest looking at these systems for your arcade, as it cuts down on legal overhead, paperwork and headaches with developers. You can read more about Arcade Operating systems in the “*NEW* Arcade Operating Systems” section below.

Ok, back to the regularly schedule article. I highly suggest that you keep reading as there is more information that is still relevant in todays VR Arcade landscape. I also talk about the per-hour and per-minute payment methods, that Viveport an SpringboardVR both use. You should know how they work before you use them, and decide which one is best for your start up! Reach out to me on twitter if you have questions. Bye!

— Joe

Licensing

If you see a game you want to include in your arcade library on Steam or Oculus home, you shouldn’t just immediately buy it and start sharing it with your customers! This is against the Home and Steam Terms of Service and can get your arcade accounts punished! Punishment can be at worst, permanently banned with no refunds!

Yes, buying a game off Steam (or even Oculus Home!) doesn’t mean you can use the game commercially. You need the developers permission. From the Steam Subscriber Agreement:

Regular versions of the game (which are all versions on Steam unless otherwise stated) do not allow for commercial use of the game. We’ll get to that in a minute. But you absolutely need to get in contact with the developer and ask about licensing their title before using their game — you can do this through twitter, facebook, email whatever. Do whatever you can — if you can’t hear back from them though, you can not use their game. There is one exception which I’ll again get to in a minute.

One plus side of contacting developers is if you’re starting an arcade and want to use our (our being general all VR game developers) game — we will help create an arcade ready version of the game — something that is easier for your users and more conducive to an arcade environment. We may even tell you that there is an already pre-licensed version of the game that you can use via SpringboardVR, Viveport Arcade or another similar arcade “Operating System.”

Developers: You should on your steam page, game/companies twitter and game/companies Facebook have contact information clearly listed. People DO want to contact you — make sure they can do so easily. If you want to avoid bots getting your email, present your email as <email name> at <email provided> dot com. So, for example our companies would be “EerieBearGames at gmail dot com” — this confuses bots so they don’t start spamming you.

Additionally, you should check out the aforementioned systems, SpringboardVR or Viveport Arcade and see if you can get your game set up there. I’m personally a fan of SpringboardVR, but I also haven’t really tried Viveport Arcade. Do your research.

Getting Proper permission

Once you’ve made contact and begun a conversation with a developer, you next need to get permission to commercially use the product(s) they created. The most preferred way to do this is to offer the developer a licensing agreement. Essentially, it’s a legal document that the developer will sign that gives you certain rights to the product, in return for some monetary fee.

If you come to the developer with the paperwork, we’re much more likely to accept the agreement, than if you come to us without paperwork. Many (if any) developer teams don’t have licensing agreement paperwork handy, so coming to us with your own, is just better. We’ll negotiate from there.

Now, I did mention that there is usually a fee tied to using a game commercially. For arcade owners, there’s a few types of things you can offer to a developer.

*NEW* Arcade Operating Systems

Arcade operating systems are something that have popped up in the past few months. They work by contacting developers, setting up licensing agreements with them, then allowing you, the arcade owners, to pick a library of games to play at your arcade. SpringboardVR and Viveport Arcade are the two big ones I know of. There are others, but those are the two I know of and like. Technically Steam is one too, with their Commercial Licensing options, but they aren’t VR Arcade specific, so I’m not fully including them. I talk about the Steam licensing system a bit more later on.

These systems will track the games playtime, they will tell you how much you’re paying the developer, then will even manage payments for you! It’s stupid easy and saves you a bunch of time and hassle. Don’t need to handle any legal paperwork or contact developers!

Each arcade system has different ways of providing financial compensation. Most use Pay-Per-Minute-Per-Month (PPMPM) which is one of many different types of compensation that arcade owers/systems can use. If you’re not using an Arcade Operating System, then I’ll next list options you have for paying developers to use their title.

Financial Compensation

There’s a few different ways for a developer to get paid for use of their game in your arcade. I’m going to outline the major ones below, in order of most preferred, to least preferred

Steam Site License (Formally a Cafe License)

Again, like I said earlier— buying a regular version of a game off Steam is not the one you should be using for commercial use and is against the Steam Subscriber Agreement. Games that have commercial licenses available through the Steam Site Licensing program, will have a second option, similar to the one below — this is what we use for Light Repair Team #4.

On the top, you have the regular license. That is what you’d buy to play at your home. Below that, is our commercial license. On Steam, this is a monthly recurring cost that allows you to use the licensed game in your arcade per seat — which is usually one HMD at a time.

Developers love this because it brings us the most cash. Normally, the license is twice the usual cost of the game (like above), but the price of the commercial license is set by the developer. This can, though, be costly for VR arcades. If you have 10 stations, that 150 dollars a month, for a single game.

The plus side of this is you don’t really need to contact the developer when you use the commercial license. You still should though, so that we know you’re legit. We can’t see who or where our commercial licenses go to. If you buy a commercial license, drop a line to the developer saying “Hey, we’re using your game via the Steam Site Commercial License. Our Arcade is ____” this just lets us know that you’re not using our game without permission. It’s just common respect and saves everyone some headaches down the line.

Developers: You can sign your game up for the Steam Site Licensing Program by contacting Valve directly. More info on that here.

Monthly License Fee (outside steam)

Sometimes, you can negotiate a different price for a monthly license. Again, you’d do this once you contacted the developer. Most of the time though, don’t be surprised if they tell you just to use the Steam license.

Pay Per Minute Played Per month (PPMPPM)

This is one of the more common payment methods that I’m seeing Arcades use. The arcade would have a system in place to track how long a title was played across all the arcades machines, in minutes. They then pay you some rate based on minutes played over a month period (or whatever negotiated period). So, for example, if a game was played for 1,000 minutes across all machines at an arcade in a whole month, at a rate of $.04 per minute, thats $40 you’d pay to the developer at the end of the month. Yes, it’s not a lot of money to the dev, but it’s cheaper for you the arcade owner.

For best results (and by that I mean, you should do this) — the arcade tracks the amount of time played, and again, comes forward with the licensing agreement paperwork. DO NOT ask developers to friend your arcades Steam Accounts, then keep track of the hours played themselves. Thats a VERY easy way for us to not agree to working with your arcade. We’re busy enough as is trying to make games and do other work, we don’t have time to keep track of your arcade.

I know some developers who don’t like this method (because it isn’t a lot of cash to devs) — so again don’t be surprised if you get pushed to use the Steam Commercial license they have set up.

Lifetime Licenses

Don’t ask for these. Ever. Every developer I know who gets emails asking for a lifetime licenses, immediately deletes the email with no response. They make you look unknowledgable, greedy and frankly pretty dang stupid. Don’t ever offer a lifetime license. Ever.

Developers: Don’t ever accept these. Period.

Post Edit: It’s been pointed out to me that managing multiple licenses can be expensive on the legal side of things. Especially if you are selling your arcade to another owner, etc. etc. Before creating your own licensing agreement, you should consider this!

After Agreement

No matter what you’re agreement is — you should stay in contact with your developers. Report any feedback that customers might have, or how well the game is doing at the arcade. We LOVE to hear this type of stuff. If you keep track of how long the game is played — definitely tell the developer that too. You should do that anyways if you’re doing a pay-per-minute-played-per-month licensing agreement.

Don’t go silent. We want to know whats going on! Seriously, it makes things easier for us.

Closing thoughts

If you’re planning to open an arcade, know that you’re going to need to pay the developers of the games you’re using. If you can’t get in contact with them — don’t use their game. It’s that simple. It’s against the Steam Subscriber agreement and could probably have some action taken against your accounts. See if their game is on an Arcade Operating System like SpringboardVR, Viveport Arcade or Steam Commercial Licensing, and get it through that. Devs talk to each other, we know which arcades are not paying their developers and using games without permission. Not doing it properly, only creates a bad reputation for you. It’s not healthy for the VR industry either.

If you have questions about how manage developer relations while hosting an arcade, you’re free to DM me on twitter or email me question. I want to see VR Arcades succeed, but only if they’re doing things properly. Arcades are meant to be fun places to go and relax. Don’t make it stressful for yourself!

You can follow me around on twitter @fr0z3nR for other game and VR development shenanigans.