Exterior shot of DisneyQuest at Disney Springs at night.

Image source: Disney.

Disney (NYSE:DIS) is pulling the plug on its once-state-of-the-art arcade. Disney announced on Monday that it will be closing DisneyQuest -- a five-level video game attraction at its Disney Springs shopping, dining, and entertainment complex -- on July 3. It will eventually be replaced by The NBA Experience, giving Disney World guests an immersive basketball experience complete with a signature restaurant and retail store. 

Fans of the interactive attraction knew that it was on borrowed time. It's been 18 months since Disney originally announced that it would be replacing DisneyQuest with an NBA-themed venue. It's also been years since Disney invested in cutting-edge gaming experiences. 

In its prime, DisneyQuest was a high-tech playground offering interactive experiences, virtual reality, and simulators along with hundreds of modern and throwback video arcade games. DisneyQuest opened in 1998, and a year later, a second location opened in Chicago. Philadelphia was next on the expansion map, but Disney abruptly scrapped the project. Chicago's DisneyQuest closed in 2001.

It's a missed opportunity 

Location-based entertainment seemed as if it would be a hit, and DisneyQuest seemed to be a Disney-fied cross between Chuck E. Cheese and Dave & Buster's (NASDAQ:PLAY). The market's still kind to the niche. Reports surfaced two weeks ago that Chuck E. Cheese was eyeing a 2017 IPO. It was taken private three years ago in a $1.3 billion deal.

Dave & Buster's has thrived in its second act as a public company. It's one of the few food and entertainment concepts that has posted consistently positive comps through what some have called a restaurant recession. Dave & Buster's stock has more than tripled since returning as a public company with its 2014 IPO.

DisneyQuest could've been so much more than the nostalgic rubble it will become in a few months. The stiff cover charge likely got in its way. Unlike the "pay as you go" realms of Dave & Buster's, GameWorks, and Chuck E. Cheese that are free to enter, guests have to pay $45 to see what DisneyQuest's five floors of interactive adventures have to offer. The games are free once inside, but it's hard to pack the house when you're at the mercy of folks paying that kind of money just to enter the establishment. Admission used to be included with premium annual passes and some resort ticket packages, but annual passes stopped including DisneyQuest last year. 

We'll never know if DisneyQuest could've survived as a concept outside of Disney with a kinder pricing policy. With so much at Disney riding on ESPN at a time when it's backing away from video game development, turning the neglected arcade into an homage to basketball makes strategic sense. However, with e-sports popularity outpacing NBA ratings one has to wonder if Disney's making the right call for the long run. This could've been the testing grounds for theme park tech and the launchpad for the virtual reality boom. Instead, like a batter trying to get ahead of a pitcher's blazing fastball, DisneyQuest swung early and missed the ball. DisneyQuest done right, priced competitively, and maintained correctly could've been something special. 

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Dave and Buster's Entertainment. The Motley Fool has a disclosure policy.