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Researcher downbeat on VR for TV and film in 2016

Researcher downbeat on VR for TV and film in 2016

Virtual Reality (VR) will have its first billion-dollar year in 2016, with about $700 million in hardware sales, and the remainder from content, according to research from Deloitte Global.

However, Deloitte offers a downbeat assessment of VR growth in TV and film in 2016, mainly due to a lack of content. “We do not expect VR to be used to any great extent in television or movies in 2016. A key reason for VR’s minimal impact on TV and movies this year is that little VR content exists, with a fundamental constraint being the lack of broadcast grade or even hobbyist cameras capable of capturing VR content,” the firm said.

While Deloitte admits that VR is likely to have multiple applications, both consumer and enterprise in the longer term, it believes that the vast majority of commercial activity in 2016 will focus on video games. “We estimate sales of about 2.5 million VR headsets and 10 million game copies sold,” the report stated.

In terms of devices, Deloitte Global states that: “There are likely to be two main types of VR device in 2016: ‘full feature’ and ‘mobile’. The former incorporates high-resolution screens and are likely to cost about $350-$500 (with prices at the start of the year possibly being higher), and we estimate between 1.0–1.75 million sales in 2016, with volumes depending heavily on the initial price.”

Paul Lee, head of global technology, media and telecom research at Deloitte Touche Tohmatsu.

Paul Lee, head of global technology, media and telecom research at Deloitte Touche Tohmatsu.

Full feature devices, according to Deloitte, will likely be designed for use with either latest generation games consoles or PCs with advanced graphics cards capable of driving high refresh rates. ‘Mobile VR’ incorporates a high-end smartphone’s screen into a special case, enabling the headset to fit more-or-less snugly on the user’s head. This is likely to cost from about $100, and we forecast that at least half a million units will be sold in 2016. Both types of VR would provide a high quality VR experience, with the caliber of full feature VR being noticeably superior, at least in 2016 and out to 2020, the report states.

Deloitte Global expects games to dominate VR content this year, with titles sold at between $5 and $40, and generating over $300 million. “Many of the apps created for smartphones are likely to be available for under $10 or free, with the latter serving primarily as marketing tools,” Deloitte states.

With regard to enterprise adoption of VR, Deloitte Global expects 2016 will be “a year of experimentation”, with a range of companies dabbling with using VR for sales and marketing purposes. However, these activities are likely to be commercially insignificant this year.
Deloitte Global also warns companies against being carried away by the “hype” surrounding VR. “As can happen with emerging technologies, there is considerable hype about the impact of VR in the near term. Any company that is considering VR in any regard should have a careful look at the likely addressable market. Recent breakthrough technologies that required consumers to wear something on their face have not proven to be mass market successes.

While VR headsets may sell better than smart glasses or 3D TV glasses, also consider that using the technology may require a set of behavioral changes that the majority of people do not want to make,” the firm said.

To access the full report, click here.

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