Someone ran a VR arcade of 2 HTC Vive units at my local suburban shopping center during the last school holidays. They charged $15 per game, and while there weren't long queues, there was lots of interest. So I sat at a cafe next door and started counting players - they were doing somewhere between $200 - $300 an hour in revenue, and that was during a slightly off-peak time too.

They disappeared after a couple of weeks (it was only ever a popup shop), so I don't know if interest trailed off or not. (I never got around to playing it myself either.) But considering many of the VR games sell for just $5, it made me feel the money right now is in running the VR arcade, not developing the software for it!

This seems like a quick no - brick and mortar retail (what I take your title's "locations" to mean) exists only because sufficient information can't always be gathered online.

Many people go to retail locations only to confirm details for later online purchases. This is already happening and has a name - "showrooming".

VR will close this gap by bringing the retail location TO the home.

For example: I don't buy clothes online because it's important to see how they fit on me specifically before pulling the trigger. VR that could do this sufficiently well would totally end my shopping at physical retail locations.

Rephrased as "VR shopping will be a larger market than living room entertainment", it's a more plausible/even discussion and I don't have as strong an opinion.

The more impactful debate, for me, is VR vs AR.

Really hoping the Magic Leap augmented reality experience matches the hype.

I bet people occasionally said the same thing about video games in the late 70s; and, in fact, for quite a while, arcades were "the thing": but, now?... the idea of an arcade is almost more of an item of nostalgia. Sure: while VR is expensive and content is limited and peoples' living areas are still designed around heavy couches pointed at media centers, the "VR Arcade" at your local retail location is going to be a big deal (and I am even thinking of setting one up at my office, not for any hope of a profit, but to get more opportunities with users to hone VR use cases; I am located in a dense college town and while doing some demos with a Vive people have actually already asked me about setting up a location they could rent), but in the long term (and the real question here is not "if" but "when", as "long term" might only be a couple years: I doubt there will be a similar twenty year lag as we saw with early video games) people are going to have cheap, portable, quality VR experiences at home; and, if VR is ever actually popular, over time the notion of a living/family room will transition to have the property of "is easily cleared to allow for room-scale VR". (I mean, for a trivial example of this happening: DDR was one of the final things that kept old-school arcades alive, but portable DDR mats and later the Kinect combined with increasing general interest in this class of game, and now the big market for this is at home, not at retail locations, even despite that being able to play the game with random interested strangers whom you later got to know in real life would have seemed to me to be a major drawing point :/. Many of my friends now have their couches and televisions set up with enough room to let them play dancing games or team music games, which would have sounded way too involved before these games became popular, the equipment cheaper, and the concepts simpler.)

What do you mean retail locations? Do you mean stores or do you mean VR theater/arcade type services?

consumer headsets (Oculus Rift, HTC Vive, Playstation VR) will represent a bigger market at first but then it will stall, allowing location-based VR centers to surpass it and maintain their lead