VR hardware to hit $50bn by 2021

©Jozef Polc via 123RF

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

The new research, Virtual reality markets: hardware, content and accessories 2016-2021, 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 the Google Daydream, are projected to produce more moderate revenues in the short term. On the plus side, 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.

Console and PC-based VR units 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.

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

The whitepaper, 'Virtual reality: virtually here', is available to download from the Juniper website together with further details of the complete research.