Assessing the Market - Making VR
Assessing the Market – Making VR
Virtual reality is quickly becoming the next big-ticket item in the tech industry, with many interested players and users. Marketing trends indicate that the industry will be valued at over $30 billion by 2025, and with the introduction of console VR through PlayStation VR, the question on every developer’s mind is: “How do I assess this market?”. Market assessment is key for not only identifying areas of profitability but for identifying what kinds of content consumers actually want to see. Let’s start to take a look at some of the statistics that show the projections for the industry.
The information presented in the chart above (from Statista) suggests that in this upcoming year alone we should see about 1.43 million head-mounted displays (HMDs) shipped worldwide. Gartner produced this data in February of 2016, and also outlined how the barriers of VR would affect marketability and sales. Aside from the high price tag of most devices, VR still has a serious lack of long-form entertainment value and tends to move towards short demo-like experiences that don’t really push the boundaries of what the technology is capable of. It is also hard to estimate the actual headset sales for giants like Oculus and HTC since both companies have been very vague about their figures. Speculation suggests that they are both at around 100,000 units in sales each. As a Canadian independent studio, we believe that to make an impact on the market, it is necessary to consider the size of the HMD owners’ market and take risks with content. Consumers of VR are concerned with more than just hardware; there is also the issue of content. Globally, where is VR content doing the best?
If we are to trust the chart above, it appears that Europe is currently leading the way in terms of content sales. This could simply be due to factors such as consumer buying preferences and desires for VR. As Newzoo found earlier this year, Spain had the greatest desire across the countries they sampled for VR. With large video game markets such as the UK, Germany, Spain, and France all looking for ways to cash in on the market it should be no shock really that overall Europe is seeing higher revenue than North America. We must however also recognize that this is represents forecasted data, and is thus inconclusive of the actual performance this year. With games such as Raw Data racking up $1 million in sales within its first month, there is strong evidence to support that players are looking for greater polished content to use with their hardware. Currently, as one looks at the storefronts like Steam, there is a growing number of titles under VR but many of those experiences are extremely short and are better surmised as tech demos or VR experiences instead of games. Considering the amount of money that players invest into buying VR hardware there is a growing demand for more full-length content that makes them feel as though the purchase was valid and in the process reduces their buyer’s remorse. What will be interesting to see is how PlayStation VR fares with both launch content and other titles that are currently being developed for the platform. One market research firm, Superdata, has even higher expectations for virtual reality and expects that by 2020 we will see content sales growth that greatly outpaces hardware.
In the End
VR is a rapidly emerging market with lots of potential for commercial success for developers, but we must not forget the challenges that exist when looking at newer technology. At this time, there is a lack of solid information as it relates to the true size of the market, as much of it is speculative. Currently, it appears as though mobile VR is the easiest entry point, followed by console, but it is unclear whether entry point will determine long-term success, Consumers’ preferences and tastes for VR content have not been set or refined yet. There is enormous potential for experiences and games that could never have existed on the traditional console and PC market. Taking that into consideration, developers need to be willing to take risks with content, because consumers are calling for games that feel like games and not like tech demos.