

small performance hit
How big the performance hit is depends on the game. If the game logic itself is CPU-heavy, the performance hit will be big. If the game spends most of the CPU time in system-supplied libraries or isn’t CPU-heavy to begin with, it’s gonna be small.
The good news is that many VR titles aren’t CPU-heavy.
I don’t know if there are direct USB-C to PS/2 adapters, but assuming not: USB-C to USB-A adapter followed by USB-A to PS/2.