After experiencing the “first year of development†in 2016, the domestic VR (virtual reality) industry encountered the “pre-heat and post-cold†in the capital market. Market progress was less than expected, and some entrepreneurial enterprises were in deep trouble. Experts believe that although the satisfaction and maturity of VR products still need to be improved, consumer demand for VR is real and is being stimulated. In 2017, it will become the year of VR development and revenue generation in China.
VR industry encounters "capital winter"?
VR, as a major “domestic†in the domestic capital market in recent years, has attracted attention and sought after from all walks of life. 2016 is also considered to be the "first year of development" for China's VR industry. Driven by the VR boom, China is rapidly becoming one of the most promising VR manufacturing bases and one of the important consumer markets. A large number of VR products from technology giants and startups are also competing for listing. However, not long afterwards, due to the development of the VR hardware market, many entrepreneurial companies collapsed, which in turn led to the emergence of the so-called “cold capital of VR†in the near future.
Research firm Canalys recently released a report showing that in the first quarter of 2017, US consumers contributed 40% of global VR market sales, Japan rose to second place, reaching 14%, and China’s market share dropped to 11%. Retreated to third place. Canalys believes that Chinese consumers seem to be indifferent to VR. "China has a different game culture and users are not willing to pay for content including VR."
A year or two ago, the venture capitalists rushed to compete for various VR projects. The concept of VR was "hot and hot," and there was no shortage of bubbles. However, as venture capital investment tends to be more cautious for VR, many entrepreneurial enterprises that rely on investment support are in a dilemma. For example, in the domestic VR helmet market, according to incomplete statistics of the industry, there were hundreds of helmet manufacturers at the peak, but so far, about 90% of startup companies have closed down.
According to IDC China analysts, before the second quarter of 2016, the major domestic VR manufacturers were local companies, and most of them were start-up companies. Later, as HTC, Samsung, Sony and other companies VR products have been shipped in the Chinese market one after another, many large companies such as Xiaomi and Huawei have also announced their entry into the VR market, leaving space for startup companies to narrow their VR hardware, and even some startup companies. It has already closed down without shipping. In this situation, the risk of entering the hardware startup market for capital is too high, thus leading to the so-called VR "capital winter."
The research institute GFK recently released a research report, pointing out that based on the development of the industry itself, the degree of attention of VR will decrease this year, and the growth rate of the market may also decline compared to last year. The VR market will be slightly cold, but the potential energy will continue to gather. Whether hardware or software technology will continue to upgrade, VR has a bright future, but it will take time.
Short content and application highlights
In the opinion of experts, the current VR capital's cautious attitude is only at the hardware level. The lack of content and applications restricts consumers' enthusiasm for purchasing VR hardware. At present, VR movies, games, and other content urgently need to be enriched and improved. The market is also eagerly looking forward to the “explosive models†of video and game content.
Wu Yufeng, director of SMG's strategic investment department, said that the development of the VR industry mainly includes two aspects, one is technology and the other is content. In the past few years, VR technology has made rapid progress, but the development of content still lags behind. In 2016, the VR industry solved the problem of allowing interested parties to look at content through VR hardware; but on the other hand, the industry has not been able to solve the problem with VR. Insufficient content has become a major bottleneck restricting the development of the industry. Due to this, some companies are forced to withdraw from the market, but there are still many VR content companies still insisting.
“The VR industry still needs to wait for the explosion of video content.†Wu Yufeng said that interactivity is an important difference between VR video and other videos, and VR video content to pursue the ultimate visual, requires a lot of tempering to create. It is expected that the content of domestic VR film and television will come to the right moment in time. For the industry, the current need to control the pace of technology and creative rhythm to better meet the advent of VR era.
Fang Fang, CEO of Jaunt China, a virtual reality company, said that VR will bring more development opportunities to China's film and television content industry. In the process of VR content growth, the key is experience and story. Now the industry must pay attention to how to dig good stories and display them in VR.
Xu Wei, head of Youku VR, believes that the current development of VR hardware terminals is on the whole. This helps content creators to do a good job of content and provide users with a better VR experience. It is expected that users will have VR in 2017. The experience will be significantly better than in 2016. At present, the VR content accepted by users is more visually significant. Second, traditional well-known IP (copyright content).
The VR market is undergoing rational adjustment
Although the development of VR is less than expected, investment tends to be cautious, but in the industry's view, the VR industry is undergoing rational adjustment after biding farewell to the earlier blindly following trends and conceptual hype. From the hardware to the content, it is being accelerated and improved. The needs are also being inspired step by step.
“The winter of investors is not necessarily the industrial winter, but the best period for industrial adjustment and survival of the fittest is the opposite.†Zhang Liping, chief strategy officer of VR helmet manufacturer Da Peng, said in an interview with reporters, from the perspective of big friends, 2016 Sales revenue is more than six times that of 2015, and the VR industry is steadily moving forward. “It is a good thing for everyone to look at VR development rationally.â€
Zhang Li stated that whether it is a VR machine or a PC
VR, from low-end customers to high-end customers, the current market demand is very positive. There are two indexes that can reflect current market demand trends: first, the Baidu index of the VR keyword, and second, the Tmall index of VR glasses. From 2016 to 2017, the VR Baidu search index is declining. On the one hand, it caters to the so-called "everyone's decline" in VR. Another level also reflects that VR has been accepted by more people and is no longer a new word.
And more importantly, the Tmall Spec Index has risen in a straight line, while the Tmall Index mainly reflects the actual purchase demand. It also has two meanings: First, VR awareness has been fully improved; Second, investors feel that this area is cold, but the user's actual purchase demand for VR has been inspired.
According to a market survey conducted by Da Peng and a third party organization, more than 70% of users will purchase VR products in the next six months and two years; 48% of users of VR Xiaobai users (having not purchased VR products) will purchase the VR products. The rest is likely to be purchased in the future.
“Although the satisfaction and maturity of VR products still need to be improved, consumer confidence and demand for VR are real. It is expected that the consumer potential will be fully demonstrated in the next two years.†Zhang Li stated that 2017 will become China. The year of VR development and income generation. First of all, the supply chain began to consider the needs of the VR industry, components that have been customized for VR devices, such as the VR version of the processor, higher-resolution smaller screens for VR, etc., signals on these supply chains all indicate the market. Has been promoted. Second, the software ecosystem is more mature. Recently, Google, Microsoft and others have all launched VR platforms, allowing more manufacturers to join their VR ecosystem. In addition, VR+ industry applications have already landed in China. For example, at present, Big Friend VR has successful cooperation cases in many fields such as industry, education, and real estate. Moreover, VR from hardware standards to content platform construction, the Ministry of Industry and other departments are also introducing relevant policies to regulate.
IDC believes that 2017 will be a year in which China’s VR industry is full of opportunities, but it is a big one. The content of VR is becoming more and more abundant, the business model is more diversified, and the word “winter†is overstated. The “early spring†of Chinese VR market is worth looking forward to.
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