VR gaming and head mounted displays (HMDs) continue to experience rapid innovation in a stuttering market, amid a range of challenges and a turbulent hype cycle. While the market has been slow to build on early momentum, demand for VR games content is on the rise, with 220% growth expected this year, according to a brace of new reports from Futuresource Consulting’s VR tracking service.
“Mass market uptake is going to be gradual, but it is going to happen,” says Michael Boreham, Senior Market Analyst at Futuresource Consulting, “and as the VR sector moves forward from a relatively low base, content will continue to evolve, the user experience will improve and the investment threshold for consumers will continue to fall. By the end of 2018, VR games content will have achieved a global sales value of $1.3 billion, setting it on a steady course for success.”
Full game sales and downloaded content are expected to dominate the VR games market, with Steam and Oculus leading the way, consolidating their positions in the PC VR space and building out a presence in mobile VR. In the games console space, PlayStation VR is expected to remain the only choice available. Microsoft has reversed its previous decision to bring VR capability to Xbox One and Nintendo has no known plans for VR functionality, despite patents for the Nintendo Switch indicating some provision for VR.
“Mobile VR is the best option for establishing a virtual reality foothold in the mass market,” says Boreham, “and we’ll see it branch into two distinct routes. Google’s Cardboard platform will play a key role in entry-level VR, whereas the introduction of second generation all-in-one HMDs from the likes of Lenovo and HTC, as well as the launch of Oculus Quest in 2019, will bring more immersive VR capability to the mobile VR sector, with each device offering the user a full six degrees of freedom.
“It has not been an easy road for mobile VR so far this year, with some bricks and mortar retailers placing less emphasis on VR product placement and SKU depth in store. Despite this, the tide is turning and the VR hardware community continues to push ahead with new hardware innovations that will provide users with more immersive gameplay.”
Looking to augmented reality (AR), where virtual elements are viewed through a mobile device and layered over the real world, the market has regained momentum during 2018. The launch of ARKit and ARCore in mid-2017 has created a development platform for AR applications for Android and iOS mobile platforms respectively. A resurgent Pokémon Go has captured much public attention, along with a number of similarly-styled AR gaming experiences based on feature film content lifted from Harry Potter, Jurassic World and Ghostbusters. Consequently, the AR gaming market is set to return to growth, with Futuresource forecasting AR gaming sales of more than $0.6 billion in 2018.
“The future of VR and AR gaming is burning bright,” says Boreham. “By 2022, we forecast global sales of HMDs to reach 250 million units, by which time the combined market value for VR and AR games software will be knocking on the door of $13 billion.”
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