Newly launched premium devices from Oculus, HTC and Sony will account for 77 per cent of the value of global virtual reality headset revenues in 2016, according to Strategy Analytics, which it has forecast will reach US$895 million
Despite this, the three brands will account for only 13 per cent of volumes, with lower-priced smartphone-based devices to dominate share of the 12.8 million unit virtual reality headset market.
“The analyst firm sees 2016 as a pivotal year for virtual reality given a confluence of factors, and also one where managing expectations will be paramount given a dearth of available content and the technical limitations of entry-level virtual reality,” Strategy states.
Strategy has forecast that state-of-the-art virtual reality headsets tethered to PCs and game consoles will barely exceed 1.7 million devices shipped globally this year due to prohibitively high pricing, however awareness is poised to “build rapidly” amid new product releases.
Strategy analysts believe that smartphone-based virtual reality can act as an introduction to the technology, with the potential to upsell users to higher quality virtual reality experiences at a future point.
“Consumers will soon be exposed to an incredible diversity of virtual reality options, ranging from ultra-low-cost to super-premium,” Cliff Raskind, Strategy Wearable Device Ecosystems service director, commented.
“While we expect smartphone-based viewers to take the lion’s share of VR headset volumes in 2016 at 87 per cent of shipments, PC and game console-powered headsets will absolutely dominate value share, commanding 77 per cent of revenues.
“Additionally, we believe VR has the potential to fuel a new tech spec race in hardware areas such as display resolution, GPUs, storage and 360° cameras.”
David Watkins, Strategy Connected Home Devices service director, noted that adoption of the more expensive devices “will be limited to a subset of early adopter enthusiasts and hardcore gamers”, with high prices acting “as a significant barrier to more widespread uptake”.
“The PC and console-powered virtual reality market is entering the classic chicken and egg phase, whereby the major games publishers are waiting on the sidelines until there are enough VR headsets and users in the market for it to make financial sense for them to build a VR library of content,” Watkins commented.
“This is providing independent and niche developers the chance to make a name for themselves before the big boys arrive.”
