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07
Mar
2019

Virtual Reality – Content Revenues Key to VR Market Success

POSTED BY Sam Barker
Developments in sensor technologies, processing power and form factors have progressed the VR (Virtual Reality) market and the inclusion of VR in smartphones; a device that is almost ubiquitous in developed countries. Additionally, serveral platforms have come to prominence in the development of content and accessories to expand the value proposition for the end user. Although initial VR use cases centred on the multimedia and games industries, the technologies now being developed have the ability to have a mass market impact in other industries, including education, training and healthcare in the future.

Due to the nascent state of the market, Juniper Research believes that revenue from hardware sales will generate the majority of revenues throughout the forecast period. The lack of content creation in the market will continue to plague the industry; if this trend continues then the value proposition of a headset will only diminish.

Juniper estimates that around 42% of revenues in the market will be attributable to headset sales. Efforts to mitigate the lack of content creation have been attempted by hardware vendors with a limited degree of success. Juniper anticipates revenues from VR content to exceed VR headset sales revenues for the first time in 2023.

Given the various industries that VR is anticipated to permeate, Juniper believes that any future strategies to encourage content creation cannot be ‘one-size-fits-all’ solutions. For example, the mobile ecosystem is able to leverage exisiting APIs and app stores as an immediate platform for third party development, where as content development is hindered by a fragmented ecosystem involving a high degree of specialist service providers.

Revenues from VR-specific games will reach $8.2 billion by 2023, rising from an expected $1.2 billion in 2019. The development of smartphone VR content is essential to increase consumer confidence in VR across all platforms, following a disappointing year of hardware sales in 2018.

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