You don't need a ton of space for the HTC Vive, but it's nice to have.
Few Virtual Reality experiences are as incredible as the ones where you take a step in the real world and that step happens in the virtual world as well. This is what is most commonly known as room scale VR, and it enables some incredible experiences. You can dodge projectiles, walk around puzzles to find better ways to solve them, and use your entire room as a painting canvas.
The HTC Vive enables a lot of these experiences out of the box, but with that comes a lot of questions about how much space you need to fully appreciate this VR experience. Most people don't have an entire room to dedicate to VR in their house, and HTC is not only fully aware of this but made sure the experience could scale to fit just about everyone's needs.
When sitting up the HTC Vive for the first time, you'll see a pair of options — Room Scale and Standing Room Only. The images next to these options make it pretty clear what your choices are. You go with Room Scale if you have the space to walk around and do things, and Standing Room Only if you can't take more than a step in any direction without there being problems. These are good general options, but don't offer a ton of detail. In this situation, detail is important.
Most of the games currently available in Steam VR work almost identically in Standing Room Only.
Standing Room Only, for example, still needs room for you to hold your arms fully extended without hitting anyone or anything. When you enable this mode, you'll see a small circle on the ground in the headset, and that's where you're supposed to plant your feet. You can still lean in every direction without problems, and you can still reach with your arms and interact with the world around you. Most of the games currently available in Steam VR work almost identically in Standing Room Only when compared to Room Scale mode, because you still have a lot of body motion in this mode.
You obviously get a more complete experience in Room Scale Mode, but you still need to know how much space you need to do everything. HTC's set up video for the Vive suggests you can just move furniture out of the way in your living room and be completely ready. For most games this is true, especially if you remember that most games work with Standing Room Only mode just fine. Some games have more detailed requirements than simply Room Scale mode, and those physical requirements need to be met in order to play those games. One example is Unseen Diplomacy, which allows you to crawl around and solve puzzles in a large virtual building. Before you can even launch this game, your play area needs to be at least 4 meters by 3 meters, which is a lot of free space to ask for .
Steam does a great job making these requirements clear before you hit the purchase button, but if you're looking to map out space for VR in your house before you set money down on the HTC Vive, this should help you choose the right space. There's a lot of fun to be had no matter what set up choice you make, so make sure you outline that space clearly before setting up your Vive and have a good time!