Worse than expected sales: why VR thunder and rain

The development of the virtual reality (VR) industry is becoming more and more invisible.

When many capitals and start-ups shouted slogans into the VR industry and more and more topics revolved around VR, VR terminal products were not much to be seen by the Chinese market and consumers. So what exactly is the industry? "The emperor's new clothes", there are still too many people in the seedlings to help?

According to the market adjustment company Canalys data, a total of 300,000 headset VR devices were sold in the Chinese market last year, and China became the world’s second largest market with a global share of 15%. Compared to the smart phone market, these two data are quite embarrassing. According to IDC data, the total sales volume of global smart phones last year was 1.47 billion, of which 470 million were smart phone shipments in the Chinese market. Obviously, the sales volume of head-mounted VR devices and smartphones was not an order of magnitude last year.

Despite this, many market research organizations are still optimistic about the prospects of China's VR market. IDC predicts that with the growth of mobile VR products, the recovery of VR startups and more VR content entering this market, it is expected that the Chinese VR market will achieve 441.2% growth in the new year.

Sales are lower than expected

Although countless capital and start-up teams are very optimistic about the development of the VR market, but from the data of a number of survey agencies at home and abroad, the actual sales data is generally less than expected, which is rather embarrassing for the VR industry.

In terms of revenue, foreign research institute SuperData Research had expected 2016 VR device revenue to reach 2.65 billion euros, and actual income was only 1.72 billion euros, only 65% ​​of expected revenue. Among them, the VR host's actual income (390 million euros) is seriously lower than expected (1.14 billion euros), the biggest accident; followed by PC-side VR devices, a difference of 270 million euros; and the actual income of mobile VR devices (6.5 billion euros ) slightly higher than expected (5.7 billion euros).

SuperData Research also monitored the sales data of four typical VR devices. The actual sales volume of the Samsung Gear VR (4.15 million units) was significantly higher than expected (3.5 million units), and the HTC Vive is expected (400,000 units) and actual sales (42%). 10,000 units were basically the same, but actual sales of Oculus Rift and Sony Playstation VR were far lower than expected. The gap between the latter was the most obvious, and the difference reached 1.85 million units.

From SuperData's research data, it is found that the weak sales of VR consoles are the main reason for the lower than expected actual sales data of VR devices in 2016, and VR mobile devices have become the growth pole of VR devices. It is worth noting that Samsung Gear VR achieved higher sales in 2016 and continued it into the first quarter of 2017. According to the latest research data from SuperData Research, Samsung Gear VR sales reached 375,000 units in the first quarter of 2017, which is much higher than Google Daydream and HTC Vive. This is mainly due to the low price of the product (only about 690 yuan), compatible with Samsung smart phones, and regular free gifts and other promotional activities.

Although HTC Vive and Oculus Rift are the two most powerful products in the VR hardware market, both of these products need to be used together with high-performance PCs to enjoy the ultimate VR experience. This means that the price is high and the VR devices have not become Before the essential consumer products like mobile phones and computers, many players have been discouraged.

Three major bottlenecks to be broken

In addition to the price issue, the main reason for the current impact on the sales of VR products is the quality of the product itself, so that early users can taste it.

When many domestic industry experts interviewed by the "Communications Industry News" reporter, VR products are generally considered to be three-point insufficiency and need to be solved in later stages of research and development.

The first is that the interaction capabilities of VR devices need to be improved. At present, the interaction capability of most VR devices is still in a relatively simple stage. It can only achieve the ability to watch and input simple physical movements. The perfect VR device needs the capabilities of integrity, flexibility, and convenience. The wholeness lies in that VR devices need to make the user a whole as an activity, allowing users to have physical interaction capabilities in the virtual world. The flexibility lies in that VR devices need to add new interactive support options and gradually transition from simple limb movements such as walking, running, jumping, and sitting to any work that supports the human body, so that the sensory and visual synchronization of the body can be ensured. The real sense of "sinking." Convenience is that it allows users to input text information quickly and easily. After all, in a virtual world, in addition to language, literal expression is also indispensable, but most current external devices are handles, and it is almost impossible to achieve smooth text input. may.

Second, there is no dedicated operating system for VR devices. Currently, almost all VR devices are equipped with Windows or Android operating systems. Currently, these systems are mainly used in PCs, tablet PCs, and mobile phones. They are not applicable to VR devices. As a result, current VR devices are only available to users. Providing simple menu options in the virtual world guides users into related applications, while other services are not well supported in existing VR devices and operating systems. Therefore, a dedicated operating system needs to be designed for the VR device to implement all the interaction capabilities applicable to the VR device.

Finally, the application scenario needs to be further expanded. What VR devices can bring to users? This is a topic that the industry has been discussing. However, from the perspective of the current development trend, VR devices only have a large application in a few areas such as games, entertainment, and education. According to the latest research report from GFK, 59% of the plan providers involved in entertainment/games, and 35% of planners involved in education; while in the surveyed industry users, the entertainment/games and education fields The users accounted for 18% and 17% respectively. All respondents agreed that the development of VR applications in the entertainment/games, education, and other industries will significantly accelerate over the next two years. Obviously, if the VR device is only limited to a few industries such as entertainment/games and education, then it would be too violent. Therefore, the VR industry chain needs to expand its application scenario in exchange for greater market development space.

Also need to burn three more money?

Although VR is almost a splendid industry that every tech person is obsessed with, the cruel reality is that the industry is still in its infancy. The VR industry's venture capital is still dominated by early-stage financing projects, and the industry has seen seeds since 2012. Investment and ABC three rounds of financing have so far remained the same, and few VR projects have moved towards D-round financing. According to the report of the market research agency BOM, the real outbreak of the industry may have to wait until 2020.

According to the BOM report, in terms of hardware, sales of head-mounted VR/AR equipment in the world will reach 12.9 million units in 2017. By 2020, the sales of such equipment will increase to 42.9 million units; in 2021 sales will double to 82.5 million units; On the other hand, global VR/AR software revenue in 20176 will reach 2.7 billion euros, and by 2020, it will increase to 24.3 billion euros. Obviously, the outbreak of VR/AR software is ahead of hardware.

Therefore, before the actual outbreak of the market, VR industry chain companies must continue to invest, sustain this painful growth period, perhaps there will be some companies and developers are eliminated, another group of companies and developers are acquired by larger companies. According to a report from Digi-Capital, the investment in VR/AR industry in the past 12 months was US$1.5 billion, while the amount of M&A in the same period was only US$600 million. This type of investment that exceeds mergers and acquisitions is very typical in the early stages of the technology market. All transactions at this time are investment growth, which has nothing to do with the integration of advantages or costs. However, with the continuous expansion of the VR/AR market, the liquidity of M&A transactions is increasing.

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