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Tuesday, November 15, 2016

Upside Opportunities for Smartphone Virtual Reality Apps

While a variety of devices have been in development for virtual reality (VR) platforms, the technology has blossomed in recent years due to developments in sensor technologies and the availability of lower-cost solutions -- such as mobile.

Today, there are a growing number of diverse industries that stand to benefit from the development of emerging applications -- as an example, from entertainment to medical and military use cases.

There will be nearly 60 million smartphone VR headsets shipped in 2021, that's an increase of around 240 percent on an expected 16.8 million this year, according to the latest worldwide market study by Juniper Research.


VR Market Development Trends

However, according to the Juniper assessment, the lower price of these devices means they will only account for 7 percent of the total hardware revenue.

While millions of consumers are already using VR on smartphone-based devices --such as Google Cardboard and Samsung Gear VR -- software developers should go beyond the simple experience-based apps and offer more compelling content that's likely to keep users engaged.

Juniper Research also found that the current freemium and lower-priced content will impact price expectations going forward. Thanks to the amount of demo and sub-$30 games and experiences on PC, consoles will be the only platform where cheaper prices are not already the norm.

Smartphone VR will have particular problems here. Less than 5 percent of software app downloaded for smartphone VR are charged for at the point of purchase. In-app purchases are much more common for this platform, providing extended experiences or expanded content for a fee.

Outlook for VR Technology Adoption

Ultimately, smartphone VR games will follow a similar pattern to other mobile apps, where the market is dependent on a small number of high-spending users for most of its revenue. This is in marked contrast to PC and console VR, where the market remains mostly pay-at-transaction. However, the research cautioned that a largely freemium market will impact the quality of smartphone VR games.

"Many consumers are likely to try the platform because the hardware is relatively inexpensive, and then turn away because of low-quality free content," said James Moar, senior analyst at Juniper Research. "The best opportunity for smartphone VR is in providing subscription media, from film and series streaming to news broadcasts, to supplement existing online services."