Tuesday, 04 October 2016 23:29

Virtual Reality: VR hardware worth US$50+ billion by 2021, driven by gamers


With gaming console-based VR headsets and technology to account for more than 50% of hardware revenues, they’ll interestingly make up only 27% of shipments as smartphone VR will also grow.

The analytical gurus at Juniper Research have released their latest study, finding that "hardware revenues from VR (Virtual Reality) headsets, peripherals and 360-degree cameras will reach over US$50 billion by 2021, up tenfold from an estimated US$5 billion in sales this year".

The researchers explain that this rapid growth "will arise from a widespread adoption of VR by smartphone users, and the high unit prices commanded by headsets for PCs and consoles".

The market will be "triggered by the launch of PlayStation VR this October, and Microsoft’s Project Scorpio in 2017 – offering compatibility with the Oculus Rift. Consoles strike a balance between computing power and cost, providing high-end specs without many of the additional costs unlike PC VR, and offer a better quality experience than smartphone VR.’

Smartphones win on volume, not on loyalty

Juniper’s new research is entitled "Virtual Reality Markets: Hardware, Content & Accessories 2016-2021", and is, as usual, on sale to relevant parties at relevant parties.

The research "projects a low revenue curve for mobile VR with the cost for ‘holder’ headsets (the enablers of smartphone VR), remaining low".

More advanced platforms however, like "Google Daydream", are "projected to produce more moderate revenues in the short term".

On the plus side, Juniper says "low-cost headsets will allow consumers to ‘dip’ into VR, but potentially abandon it if the experience is poor. This could be problematic for smartphone VR software developers, who will be relying on in-app purchases for revenue".

Then there’s console and PC-based VR units. These "can more easily provide high quality experiences, justifying a premium price and upfront software revenue. However, the shape of the early market may already have had an impact on PC-based VR content".

Research author Joe Crabtree remarked: “Some of the most popular VR titles are currently priced much lower than traditional AAA games, sometimes as low as half the price.

“In the several months since the launch of PC-based VR this year, consumer expectations are likely to have changed to expect shorter, cheaper games. When AAA publishers release to PC, they may have trouble selling with traditional AAA prices, while console users have no such habit to break.”

As usual, there is a free whitepaper with more detail to tempt you into buying the full research, which is entitled 'Virtual Reality: Virtually Here.’ 


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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.



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