The global VR content market is expected to grow at a CAGR of close to 128% through 2020, according to a new market study from Technavio.
The research report – titled Global Virtual Reality (VR) Content Market 2016-2020 – categorizes the global VR content market into three major segments based on device:
1. Mobile devices
The VR content market by mobile devices is likely to experience the fastest growth during the forecast period. The integration of VR technology into mobile devices and related games is one of the latest trends witnessed in the market.
Samsung Electronics and Google are some of the leading vendors that have integrated VR technology in their smartphones. The mobile gaming segment is one of the fastest-growing segments in the global gaming market. It accounted for more than 30% of the global gaming market in 2015. According to Technavio, the global mobile gaming market is likely to post a CAGR of nearly 20% during the forecast period.
The declining cost of mobile devices and the growing spending capability of the population will further support the growth of the mobile device segment during the forecast period, said Ujjwal Doshi, a lead analyst at Technavio for media and entertainment services research. “As a result of the increase in adoption of mobile devices and growing number of mobile games, many vendors are encouraged to launch VR content and accessories that are compatible with these devices.”
In 2015, when the overall VR content market generated a revenue of $221.2 million, the PC segment alone accounted for more than $95 million. The segment is likely to experience significant growth during the forecast period, Doshi said. “One of the major reasons for the exponential rise in growth of the PC segment is the mesmerizing gaming experience offered by PC-based gaming integrated with VR.”
For instance, the game Elite Dangerous on Oculus Rift requires players to wear a head-mounted device (HMD). It allows them to experience, interact, and control the actions in the virtual world with the help of virtual controllers.
However, as the VR market experiences a challenge with low bandwidth, wireless technologies get eliminated, which limits players to their PCs. In addition, 1080p resolution HMDs are not very impressive in terms of clarity and have a lower impact on users that play virtual games on PCs.
3. Gaming consoles
The console gaming segment accounted for the second-largest revenue share of over 29% in 2015. Technavio expects the market share to increase during the forecast period to reach approximately 30% by 2020.
The revenue share of this segment is expected to increase owing to the launch of a wide range of virtual accessories to support console games. For instance, Sony, which introduced PlayStation, is coming up with PlayStation VR at a price of $399. The PlayStation VR headset, which is expected to be preloaded with 50 games at launch, will be compatible only with PlayStation 4. In June 2015, Microsoft partnered with Oculus to make Xbox One controller compatible with every Oculus Rift, thus allowing players to stream Xbox One games to VR headsets.
One of the major drawbacks of these headsets is that they are expensive, ranging between $500 and $900. This can pose a barrier to the growth of the VR headset market as gamers are reluctant to invest in expensive console-specific accessories because they spend high amounts on the gaming consoles.