It’s not that the Metaverse gave VR an opportunity, but the development of VR allowed people to see the opportunity to the Metaverse.
If the future can be seen through a pair of glasses, then for now, this pair of glasses must be VR glasses. Perhaps where the end of the universe is yet to be known, but right now, the entrance to the fiery Metaverse is already in front of everyone.
In 1935, Stanley Weinbaum conceived a pair of glasses that could realize Virtual Reality (VR) in the novel “Pygmalion’s Glasses”. Since then, the scientific community and the capital market have never stopped researching and exploring VR. Only in decades, the ups and downs of VR gave people hope and disappointment.
Nowadays, when the concept of Metaverse has exploded, VR has once again “dressed up to attend” and has become the protagonist of this capital feast.
There is never a shortage of stories in the world of Metaverse, but how to tell new stories has always been a problem that many companies are thinking about. In recent years, the VR industry has experienced ups and downs, but all are “thunder is louder and rain is little.”
Now, with the concept of Metaverse, the VR industry has re-entered people’s vision. The capital market’s greetings to the VR industry have also changed from “still doing VR?” to “Are you doing VR too?”.
The fiery track will naturally attract “big bets.” According to EqualOcean’s observation, many domestic Internet technology giants have begun to enter the VR track, involving platforms, content, hardware and other fields.
According to statistics from Yiou Think Tank, in 2020, global capital’s interest in the VR/AR industry has begun to return. During the whole year, the amount of financing and the number of financing of this track increased by 15% and 11% respectively year-on-year. As of December 14, there have been 145 VR industry financings worldwide in 2021, a year-on-year increase of 19.8%. Among them, there will be 55 financing events in China’s VR industry in 2021.
Capital’s sense of smell is extremely sensitive. It can be seen that although it has been silent, the capital market has not completely abandoned VR. Instead, VR is riding on the east wind of the Metaverse to blow the flames of survival again.
Online office and consumer demands have prompted companies to increase their investment in VR. According to the data from “KPMG 2020 Technology Industry Innovation”, 71% of companies have increased their investment in VR, and 14% of companies have increased their investment by more than 40%.
The VR outlet is opening. The tuyere means power, but the fact that VR can fly does not mean that it can also land smoothly.
When VR products are blooming everywhere, companies and capital still have many questions to think about: Is VR “burning old firewood and new firewood”? How many bubbles and dangers are in the middle? Will anyone believe the new story? Where will the “wind” blow this time…
Why is it VR?
The industry chain of Metaverse covers seven fields including experience, exposure, creator economy, spatial computing, decentralization, human-computer interaction and infrastructure. Why are a large number of companies and capital focusing on VR?
On the one hand, VR technology is one of the important foundations for the construction of Metaverse; on the other hand, this industry has shown huge business opportunities.
According to IDC data, in 2020, the global VR and AR (augmented reality) market will be about 90 billion yuan, of which the VR market will be 62 billion yuan. It is estimated that in the five years from 2020 to 2024, the average annual growth rate of the global VR/AR industry is about 54%, of which the growth rate of VR is about 45%.
The “China Internet Development Report (2021)” report also shows that the scale of my country’s VR market is growing rapidly. In 2020, my country’s VR/AR market will be about 30 billion yuan, and the VR market will be about 23 billion yuan, accounting for about 80% of the market.
The VR market is opening up, and the government is also gradually introducing relevant policies to promote the application and development of VR technology.
The development of the VR industry in the Chinese market is not achieved overnight, but has been accumulated for a long time. The sustainable development of the VR industry is behind the consumption base accumulated over the years and the continuous accumulation of technological capabilities.
2016 is called the first year of VR. Since the second quarter of 2016, VR products from companies such as HTC, Samsung, and Sony have been shipping in the Chinese market. In the same year, domestic technology giants such as Xiaomi and Huawei also announced their entry into the VR market. Subsequently, domestic VR companies have sprung up.
According to data from the Huajing Industry Research Institute, the number of VR companies established in my country has increased year by year from 2015 to 2020, from 874 to 3088; and in 2021, my country will newly establish 1997 VR companies in the first half of the year. As of the first half of 2021, the total number of VR-related companies in my country has reached nearly 20,000.
But what really excites the industry is that some qualitative changes have taken place in the VR field. In 2016, the reason why VR did not grow in the domestic market is that VR companies have not made substantial breakthroughs in hardware. For a long time, VR products have many problems including strong dizziness, low resolution, large size, and high price, which caused their shipments to be unsatisfactory.
The real revolution in VR products will take place in 2020.
At the end of October 2020, Facebook (now renamed Meta) released the Oculus Quest 2 VR wearable all-in-one, priced at US$299 (approximately RMB 1904). Such a price means that VR equipment is no longer exclusive to the rich.
Oculus Quest 2’s market share has soared since its launch and achieved cumulative sales of 3 million units three months after its launch. In February 2021, this product became the largest VR headset on the SteamVR platform. According to the Evercore investment bank, in 2021, Oculus Quest 2 sales will exceed 8 million units.
With reference to the ecological development path of the computer and smartphone industries, Yiou think tank believes that the two major prerequisites for the prosperity of the VR industry are that the global VR shipments exceed 10 million, and the monthly active users of VR game content are not less than 8 million (accounting for the total The number of monthly active users is above 80%).
Facebook founder & CEO Zuckerberg once said that about 10 million people use and purchase VR content is the threshold for developers to continue research and development and profit. Crossing this threshold, content and ecosystem will achieve leapfrog development. The continuous growth of VR shipments just proves the feasibility of VR commercialization.
In the first quarter of 2021, global VR headset shipments increased by 52.4% compared to the same period in 2020. According to IDC’s estimates, between 2021-2025, global VR headset shipments are expected to reach an average annual growth rate of about 41.4%. China Academy of Information and Communications Technology predicts that in 2024, global VR terminal shipments will reach 33.75 million units, with a compound annual growth rate of 56%. By then, the market size of the VR industry will reach 240 billion yuan, with a compound annual growth rate of 45%.
Yiou think tank predicts that in 2021 the shipment of VR headsets in the Chinese market is expected to reach 1.43 million units; in 2020-2025, China’s VR/AR terminal hardware shipments will increase from about 4 million units to close to 60 million units.
According to calculations by Yiou Think Tank, China’s VR/AR terminal hardware market is expected to reach 178.9 billion yuan in 2025; in the domestic application market segmentation, excluding the impact of hardware revenue, the VR consumer-level application market will not be less than 296 in 2025 100 million yuan, the scale of the enterprise application market will not be less than 93.1 billion yuan.
Who is on the VR track?
At present, a large number of domestic manufacturers have entered the VR track.
Yiou analyst Cheng Yuanfen believes that with reference to my country’s existing industrial layout, the current major VR suppliers in the mainland are mostly mobile phone chain leading suppliers, and their businesses are mainly related to electronic components, modules and assembly. Mobile phone industry chain companies are expected Take the lead in seizing the opportunity in the VR market.
In fact, the entry of mobile phone supply chain companies into the VR industry is directly related to the mobile phone company Apple. For a long time, Apple has been “recruiting troops” for the entry of VR headsets, accumulating technology and paving the way for ecology.
In 2010, Apple acquired Polar Rose, a Swedish research facial recognition technology company; in 2013, Apple acquired PrimeSense, an Israeli real-time 3D motion capture technology company, for US$345 million; in 2015, Apple acquired German AR technology company Metaio and its own 171 global patents; in the same year, Apple also acquired Swiss facial recognition technology company Faceshift; in 2020, Apple acquired sports-related VR content company Next VR and VR startup Spaces.
When Apple is eager to further expand and extend Apple’s closed-loop ecosystem, these companies in the mobile phone supply chain naturally need to review the situation and make corresponding changes. Therefore, entering VR has become the consensus of many companies.
Nowadays, as an important terminal entrance, mobile phones have formed a complete and mature industrial chain. Manufacturers in the domestic mobile phone industry chain have been pre-emptive in chip research and development, software and hardware ecosystems, and capital reserves, and already have a relatively complete and mature industry chain. Its products also have similarities with the core technologies and devices of VR products. Even mobile phone manufacturers can directly program the underlying hardware for VR, which is different from traditional applications developed at the Android layer.
In addition, some believe that VR/AR will replace mobile phones as the next generation of personal computing centers in the next 5-10 years. Compared with mobile phones, the experience of human-computer interaction is unique to VR. This can largely replace physical experiences such as mobile phone touch, sliding, and visual restrictions. VR can even turn human-computer interaction into voice, gesture, and Action recognition is more in line with human natural interaction behavior.
The transformation of VR to mobile phones is destined to happen, which gives mobile phone manufacturers a sufficient sense of crisis. In this regard, Cheng Hao, the co-founder of Xunlei, once bluntly said: “(Mobile phone manufacturers) is better than being killed by others in the future.” This may be the real reason why mobile phone manufacturers lay out the VR track.
Take the “fruit chain” supplier Goertek as an example.
Goertek is involved in VR/AR-related precision optics, optomechanics, acoustics, sensors, precision structural parts, display modules and other components, as well as VR/AR complete machine system design and development, software algorithms, automated production testing and other fields. There is a corresponding layout, and Goertek’s layout in the VR/AR industry chain has become a new growth point for the company.
In 2020, Goertek’s smart hardware revenue, including VR/AR products and smart wearable devices, reached 17.652 billion yuan, an increase of 107.34% year-on-year. In the first half of 2021, Goertek achieved revenue of 30.29 billion yuan, a year-on-year increase of 94.5%; net profit attributable to the parent company was 1.73 billion yuan, a year-on-year increase of 121.7%. Among them, the smart hardware business (including VR/AR, smart wearable and other products) achieved revenue of 11.21 billion yuan, accounting for 37.0% of total revenue, a year-on-year increase of 210.8%.
After having tasted the sweetness of the VR industry, GoerTek continues to increase capital investment to continue its deep cultivation. In the first half of 2021, the company’s R&D investment was 1.57 billion yuan, accounting for 5.18% of operating income. The research and development funds are mainly used in product fields such as VR and precision optical components, smart wireless headsets, acoustic precision components, microelectronics, smart wearables, smart speakers, home game consoles and accessories.
Not only Goertek, many mobile phone industry chain manufacturers have extended their tentacles in the VR industry.
Changxin Technology has stated that it has established a cooperative relationship with Goertek in the VR business. The company’s Dongguan factory has a Quest 2 display module production line, and the products produced are mainly delivered to Goertek; TCL Huaxing has already reserved related VR on VR Technology, and exhibited the industry’s highest 1500ppi LCD screen for VR at SID Display Week in 2021.
Luxshare Precision stated that the company already has a layout in AR/VR parts and complete machines; Lens Technology stated that the company and end customers continue to develop new products, and it is expected to strengthen the VR/AR on mobile phones in 2021. support.
Is VR still a misfire?
Even if everyone is clamoring that VR represents the future of the Internet, they have to admit that there are still many problems that need to be solved in the VR industry today.
Due to the lack of clarity and refresh rate of VR devices, some users may experience dizziness, vomiting and other discomfort when wearing VR devices, which has caused poor experience to a certain extent.
Studies have shown that resolutions above 14k can basically be recognized by the brain, but for the time being, the VR equipment used in China is far less than the requirement of deceiving the brain. Consumers’ discomfort may generate concerns about whether VR technology will cause damage to their own health, which will affect the future development and popularization of VR technology.
In addition, the high price of the VR experience is also one of the reasons restricting its expansion. Facebook’s Oculus Quest 2 can quickly gain consumer recognition, and the relatively low price is one of the most important reasons. But in the domestic market, the price of mainstream VR glasses is generally above 3,000 yuan.
The price problem of VR hardware cannot be solved in a short time. If VR technology is to be promoted, it is critical to ensure the stability of its content output and rate of return. The cost of content acquisition and the sense of experience determine consumers’ acceptance of VR devices.
At present, the domestic VR content industry has been limited by factors such as insufficient rigid demand for downstream applications, insufficient terminal equipment penetration, and insufficient high-quality content.
Some people believe that the most important reason for domestic VR content has not kept up with the pace, because the hardware itself did not provide enough soil before. For businesses, there is not enough soil, even if the investment is a preliminary test, it will not form a relatively large commercial scale effect.
Only through continuous technological updates and iterations that make the user experience of VR hardware better and lower and lower can the sales and popularization of VR equipment be promoted. Only an increase in users can stimulate their demand for content and ultimately stimulate businesses to launch more high-quality content. High-quality content will also encourage more users to buy hardware devices.
As expected by VR companies, some high-quality VR game content has begun to appear in the industry.
“Half-life: Alex” game screenshot/source: Valve official
“Half-life: Alex” is a VR exclusive action-adventure game produced and released by Valve Game Company in March 2020. This game was tailor-made for VR from the very beginning. VR is built for the presentation of core gameplay, allowing users to immerse themselves in deep environmental interactions, solving puzzles, exploring the world and almost realism. In battle.
The success of “Half-life: Alex” drove the increase in hardware sales of Valve Index (VR headset produced by V agency) and added nearly 1 million active users to Steam VR, bringing its monthly active life to 2.7 million in July.
IDC report shows that the head game masterpiece based on the VR all-in-one machine has begun to make profits. Data show that since its listing in May 2019, the revenue of games and software applications on the Quest platform has exceeded US$150 million, of which 35 games have revenue of more than US$1 million.
Also in 2019, the fast-paced military shooting game “Contractors VR” produced by Nanjing Caveman Studio was launched. The game landed on Steam’s best-selling VR game list in 2020 shortly after its launch, and its revenue has exceeded 1 million U.S. dollars for more than one month. In less than half a year, the game sold more than 50,000 copies on both Oculus and Steam platforms. With this game, the caveman team became the first VR game team in China to receive funding from Oculus.
In terms of content application, subject matter forms are more abundant, content and specific terminal platforms are accelerated decoupling, content development, debugging and marketing tools gradually mature, self-sufficient and profitable content, and the ecosystem begins to take shape.
Although, the current high-quality content is nothing short of a drop in the bucket for the development of the VR industry. But all industries have experienced tortuous roads in the early stages of development.
To some extent, VR represents the future of the Internet. As many practitioners believe, VR is a promising technology.
Right now, the concept of Metaverse is spreading everywhere, and many opinions believe that Metaverse has given the VR industry a chance to come alive again. In fact, it is not that Metaverse has given VR practitioners a chance, but that the VR industry itself has seen the opportunity to “metaverse” as it moves forward.
After decades of development of VR, many participating VR teams gradually understand the form and limits of technology and products. The emergence of truly meaningful and in-depth VR products and content also indicates the stable development of the industry. These are just a matter of time.
Nowadays, the smart hardware business dominated by VR/AR is showing off. This is closely related to the acceleration of 5G construction, the prosperity of the VR industry and the growth of demand. It can be said that the outbreak of the VR industry has brought a new spring to many companies.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/vr-does-not-need-metaverse-to-save/ Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.