Estimating shipments of products in new areas of IT is a bit like being the only lighthouse in view above banks of thick fog. It’s the only light you can see, so you’ve nothing to lose heading for it. We’ve been there with pocket PCs, Smartphones and Tablets. And while the fog has cleared for these products, the true state of the market for the much anticipated Virtual Reality headsets is still shrouded in mist.
At CONTEXT, as part of the work with our VR Research Group made up of major PC, HMD, and software vendors, our first predictions estimating the total number of VR headsets shipped in 2016 are conservative compared to some estimations from this time last year. If the basic HMDs are included, the lowest possible total global shipped units start at 8.5m, with true figures probably being closer to 12m+ once the plethora of minor Chinese brands are included. Theo Valich of global consortium VR First commented: “While we are seeing that the adoption of VR is waiting on content, the growth of VR in the emerging markets in Asia-Pacific is not being properly covered. The number of VR start-ups on both the hardware and software side is almost exponential.” The shipped units for the high-end headsets such as the HTC Vive, PSVR, and Oculus Rift CV1 are <15% of the total market, but to get a true picture of what has happened in 2016 and will develop in 2017, it is important that all types of headsets are included.
There are many factors to be considered when attempting to get a handle on the true state of the VR headset market. For a start, 2016 was never going to be about mass adoption for companies such as HTC and Oculus and here are several reasons why: in terms of the headsets designed for use with a PC, a very powerful machine is required and that rules out all but the most dedicated gamers and developers. Awareness of the category is only just starting to become widespread, and even for those with the required hardware, there is a lack of major hit AAA titles to drive sales.
In a recent survey, CONTEXT showed that only 10.5% of members of the general public in the EU had heard anything significant about VR, compared to 79.9% of gamers, with 26.5% of people having not heard anything at all. The issue facing the VR industry right now is that there is a transformative effect of trying it out that needs to happen; simply describing the experience is akin to attempting to explain the taste of Cola to a Martian. As a result, even the cheaper headsets – and yes, we are including the Google Cardboard – can make a profound impact on consumers. In 2016 anyone with a Smart Phone was able to experience VR for the first time, and thanks to Google and others there is a wealth of apps to demonstrate what VR can do. In the early stages of VR, such products are vital to raise awareness. Taking the analogy to the extreme, why would anyone spend $1000 on a sound system when they’ve never heard music on a transistor radio?
In summary, CONTEXT expect VR headset shipments to increase in 2017 for all types of VR headsets, with new industry verticals opening up. We’re seeing more and more VR technologies going through the ICT sales channels into a huge variety of sectors, including healthcare, education, elderly care, military, as well as major public entertainments. With current VR price points, the democratisation – and therefore unit shipments – can only increase, and all types of headsets will continue play a significant role, not just premium products.