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Regardless, the idea is silly to begin with. Regardless of what room, or how much space you can devote, inevitably there will be obstructions in the way; specifically furniture. And while I'm sure many will do the best they can to clear room, encroachment into something is bound to happen. Nothing like stubbing your toe on a chair leg to end the night.

So far, the best solution seems to be the Virtuix Omni, or a similar product like it.

Standing on a Virtuix Omni. :P http://www.virtuix.com/ (No I don't work for them in any capacity.)

So, the problem with first-person shooters is that you're running or crouching or jumping in the game but not in the real world

Yeah, we know you're just trying to sell these.

1. 1. Omni motion "trackpad" -- $500 (or similar product)
2. 2. Oculus rift headset -- $350 (devkit2 pricing)
3. 3. Razer Hydra or similar -- $140 (priced from here)
4. 4. playstation move motion controller -- $70
5. 5. at least commodity laptop worth of components to power it all -- $450 (based on middle tier notebook here)
6. 6. At least basic surround sound or decent headphones -- $90 (here and here)
7. 7. A decent gaming computer ~$1500

So that brings the overall price to ~$3,100 if you don't already have a gaming box and ~$1,600 if you do. Plus the const of your living room. This is totally in price for a lot of people. It's all available in hardware form now (to varying degrees of "done").

The major problem is what you pointed out: it will eat your living room/den. These costs and tech are also only for one player and you might get interference/tracking issues with more than on person in the same room. Only people who have solo/networked gaming as their primary form of entertainment will be willing to to make this trade off (that still is a lot of people). BUT, it's super affordable from a business aspect. Take a building, divide it into sound-proofed closets. Put one of these units into each of said closets. Have a desirable set of games (could even be one a la LaserQuest) that people want to play (or with telepresence bots: virtual tourism! (project tango?)) and it's really something to get in on. You could also see it used easily in therapies, spas (walk through a beautiful garden), military training (not as good as the real thing, but decent),and whole lot more.

That said, businesses won't be willing to invest in this without content Just like 3D movies and TVs, the life and death of an entertainment technology depends on the content available to it. There are a lot of companies jumping on the VR bandwagon right now. I think there will be a good set of initial IP that launches with these products or it will integrate with previous games (Skyrim, etc.), but there has to be something that makes you throw your money at them.

Overall, it's getting cheaper, faster and better. I think within 5 years everyone will know someone who has VR in their house.

That would be this:

http://www.virtuix.com/

But as soon as you press the W key and start walking forward, there's something no hardware can fix happening. Your eyes see forward motion, your inner ear doesn't.

I wonder if adding in the mechanics of moving (e.g. an Omni) might help matters.