About Futuresource Consulting

Futuresource Consulting, the specialist research and consulting company, is delighted to be the official knowledge partner for CEATEC JAPAN. The company can trace its roots back to the 1980s and provides market insights into consumer electronics, digital imaging, entertainment media, broadcast, optical manufacturing, storage media, professional IT and education technology.
With more than 70 full-time employees providing in-depth analysis and forecasts across consumer and professional electronics categories, Futuresource is able to advise on market, competitive and technological developments, providing clients with access to the information that helps produce the best possible results.

Vol.1542018/2/28

Virtual Reality Evolution Continues but Expectations Re-Assessed

28 Feb 2018 - At the beginning of 2017, VR (Virtual Reality) was course to enjoy widespread adoption. However, during the year device sales fell short of expectations, according to the latest findings from Futuresource Consulting's latest VR quarterly tracker.

Many factors have conspired to limit widespread adoption of VR. Notably, these include high hardware pricing for PC based VR and to a lesser extent PlayStationVR (PSVR).

While the VR platforms have pushed ahead with hardware development, the creative community has lagged behind in its ability to generate a sufficient amount of compelling content.

"A key issue for the industry is the lack of killer applications for VR that are essential to drive consumer adoption, and this has proved to be a major limiting factor that has impacted growth," says Michael Boreham, Market Analyst at Futuresource Consulting. "The slow rate of consumer adoption of VR hardware has also impacted on the content community, with games and video publishers being wary of funding VR productions until the installed base of hardware has reached a level where they can guarantee a healthy return on investment."

This has resulted in major games publishers Electronic Arts suspending VR related projects for the foreseeable future and CCP closing its VR production operation.

The shake out within the VR sector has extended beyond the games segment, as some of the early hardware pioneers, such as Intel, have exited the business or closed some of their VR activities.

Nonetheless, games continue to be the key application for VR. "There has been a continued roll out of games titles across the mobile, console and PC platforms throughout 2017, with popular franchises such as Minecraft moving to VR. By 2021, the total value of the VR gaming market is forecast to increase to reach US$8.8 billion from almost US$350 million during 2017," finds Amisha Chauhan, Research Analyst at Futuresource Consulting.

Despite below-expected uptake, notable innovation in the sector continues. The closing months of 2017 saw the release of Windows Mixed Reality headsets that have disrupted the price points for PC and PSVR. This is beginning to recalibrate the price structure and will seek to drive sales moving forward.

"VR remains a mass market home entertainment product in waiting," continues Boreham. "Technology continues to improve; the consumer cost of entry is falling and there is further experimentation with content creation and monetisation models. With continued heavyweight industry support from the hardware sector and the content community it remains a question of when rather than if the consumer VR market will achieve mass market acceptance. Although, this is expected to occur over a longer timeframe than was initially anticipated."