Is VR Worth it? Depends on the Device

TL;DR

The VR market saw an 8% growth in Q3 2018 with 1.9 million units sold worldwide, while the AR market remains small at only 3% of the market. Sony dominates the VR market with its PlayStation VR, while AR is primarily delivered through phones. The killer use cases for AR are not yet developed, but developers are showing promising glimpses of future potential.

Transcript

Dylan Lewis: I think upfront investment might be the perfect way to segue into the VR and AR discussion. This is a market where I think a lot of people have been very excited for a very long time. It's a sexy idea, the idea of virtual reality. The reality of virtual reality is, a lot of the rigs are expensive, and a lot of the computing needs to po... Read More

Key Insights

• 🫵 VR market is experiencing growth, but screenless viewers are declining, whereas tethered headsets are performing well.
• 🌥️ Sony dominates the VR market with PlayStation VR, leveraging its large base of PS4 gaming consoles.
• 🔼 AR market still remains small, with high-cost headsets and limited players.
• 🥺 AR is primarily delivered through phones, with Apple and Google leading the way.
• 😒 Killer use cases for AR are yet to be developed, but promising glimpses of future potential exist.
• 🫥 Apple is laying the groundwork for future AR adoption, but visible strategy is lacking.
• 😒 Dedicated AR headsets for everyday use are not yet warranted due to lack of compelling content.

Questions & Answers

Q: How is the VR market performing in terms of sales?

The VR market saw an 8% growth in Q3 2018, with 1.9 million units sold worldwide, indicating a positive trend in adoption.

Q: What factors contribute to the declining volumes of screenless viewers?

Screenless viewers lack compelling experiences, as they rely on strapping a phone to the face for a rudimentary VR experience. Additionally, companies are not investing heavily in this category, leading to a decline in volumes.

Q: Why are tethered headsets performing well in the VR market?

Tethered headsets, such as Sony's PlayStation VR, are performing well due to the large installed base of PS4 gaming consoles. These headsets are seen as affordable accessories for gamers who already own the necessary hardware.

Q: What is the current state of the AR market?

AR market remains small, with only a 3% market share. It is primarily delivered through phones, with Apple and Google pushing AR technology on their platforms. Lenovo and Microsoft are the main players in the limited AR headset market.

Q: What are the challenges of AR adoption?

The high cost of AR headsets and the lack of compelling content are the main barriers to widespread adoption. Most AR experiences on phones are limited to emojis and filters, lacking truly helpful functionalities.

Summary & Key Takeaways

• VR market experienced 8% growth in Q3 2018, with 1.9 million units sold worldwide.

• Screenless viewers, such as Google Cardboard, are experiencing a significant decline in volumes due to limited functionality and lack of innovation.

• Tethered headsets, like Sony's PlayStation VR, are performing well as they leverage the existing large base of hardware, while PC-based VR has a smaller enthusiast market.

• AR market remains small, with only 3% market share, primarily delivered through phones. The limited AR headsets include Lenovo and Microsoft.