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THE RISE OF VIRTUAL REALITY

Whitepaper

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1.1 Introduction

The concept of a VR (virtual reality) or virtual world has long been the

subject of visionary thought and the last few decades have seen

numerous attempts to commercalise the technology. However the

industry has not yet taken off.

Throughout the 1990s VR became increasingly popular, yet with the

technology not quite developed enough to match the media hype, the

industry died down.

Defined as a computer generated artificial reality, VR is the simulation of

a three dimensional image or enviroment that can be experienced and

interacted with, most commonly through stereoscopic goggles.

With the advances in techology and the corresponding growth in interest

from major key players, VR is now in a position where the market can

finally take off. The technology is poised to transform the entertainment

industry over coming years, whilst holding promising potential to quickly

expand into other markets such as industrial and healthcare.

1.1.1 Definition of VR

The difference between VR and AR (Augmented Reality) is immediately

apparent as VR transports the user to an entirely computer-generated

world, where visual perception of the physical world is lost.

Indeed, the fact that AR requires interaction with the physical world

makes the technology, in some senses, more complex than VR, given

that the latter leverages data from a pre-determined world, while AR must

gather and process data from a dynamic world.

Juniper defines VR as:

‘Virtual Reality leverages pre-determined audio and visual

data from a digital source, using specific software and

hardware to create an interactive and artificial

environment for the user.’

1.2 The Development of VR by Industry

1.2.1 Console Games

The games industry is expected to be the driving force behind the initial

development of the VR market. The major developers are all primed for

the entertainment industry and the success of future applications is likely

to fan out from the device penetration as provided by the games market.

Consequently Juniper expects the most significant development of VR

within the forecast period to be in the games market.

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Figure 1: Project Morpheus Demonstration at GDC 2015

Source: Sony via PCPro.co.uk

1.2.2 The Film Industry

While games are likely to be the main driving force of VR, potential

opportunities for the film industry are also likely to be a major part in the

initial development of the technology. On a basic level, various cinema

applications already allow traditional formats to be watched in the

cinematic experience of VR.

However, as with game adaptations, these are likely to suffer from a

novelty factor and merely provide a bridge between these traditional

formats and purpose-built VR films.

Figure 2: Welcome to Aleppo Screenshot

Source: Ryot YouTube

1.2.3 Adult Entertainment

Another emerging sector of the VR ecosystem is the potential for the

adult market. Porn industry representatives believe that VR is still very

much in its development stage and will not see large-scale uptake during

our forecast period. However, work is currently underway to shoot VR

porn, as well as to apply it to up-coming devices such as Red Light

Center developed by Utherverse, designed for Oculus Rift and debuted at

the AVN Expo. A handful of websites are currently also devoted to

producing hard core content for VR headsets.

1.2.4 Gambling

While Juniper feels VR is still a few years away from being perfected, we

have already seen entrants from the gambling market in the market,

providing an insight into the future prospects for gambling applications.

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Figure 3: William Hill’s VR Racing

Source: William Hill

1.2.5 Industries beyond the Consumer Sphere

Beyond consumer applications, VR is beginning to show potential in

many other areas, with a major footing in applications such as military

training, and offering opportunities to areas such as medical and even

nuclear facilities.

1.3 VR HMD Shipment Forecast Summary

Juniper Research forecasts that wearable VR HMD (Head Mounted

Display) shipments will approach 30 million globally by 2020, compared

to just over 3 million in 2016.

Our research observes that with technological advances, such as low

latency and smarter graphics, coupled with the corresponding growth in

interest from major players, VR is now in a position where the market can

finally take off. The technology is poised to transform the entertainment

industry, including games and video, over the next few years, whilst

offering the potential to quickly expand into other markets such as

industrial and healthcare.

Far East & China will witness increased development and production

activities, driven by a sharp rise in consumer demand.

Hardware retail revenue from VR HMD headset sales will exceed

$4 billion by 2020.

Figure 4: Number of VR HMD Devices (m), Split by 8 Key Regions – 30 Million

Source: Juniper Research

North America Latin America West Europe

Central & East Europe Far East & China Indian Subcontinent

Rest of Asia Pacific Africa & Middle East

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Order the Full Research

Virtual Reality: Market Dynamics & Future Prospects 2015-2020

Juniper’s Virtual Reality Insights research report provides a

comprehensive analysis of the developments in the VR industry across

multiple verticals. The research delivers an authoritative view on the

current market landscape and the future roadmap for VR.

Key Features

Provides an in-depth analysis into the current forces driving the VR

(Virtual Reality) market.

Strategic review of the most important trends and opportunities in the

rapidly evolving VR marketplace.

Investigates key industry hurdles, such as technological difficulties and

ethical challenges.

Juniper Road Mapping of VR: Now, Near Future & Far Future

Opportunities.

Comprehensive market forecast set, projecting the size and value of

VR headsets.

What’s in this Research?

Juniper Research's latest Virtual Reality Insights Research report

evaluates the key developments in this fast growing market, including an

in-depth discussion of key market challenges and future growth drivers.

The research suite is delivered in PDF format and includes:

Key Trends and Market Developments – discusses sector dynamics

allied to a series of strategic recommendations for players across the

value chain.

Future Outlook and Road Mapping – investigates key market

opportunities for stakeholders alongside a number of case studies.

Market Sizing and Forecasts – 5 year forecasts for VR headset

shipments, installed base and hardware retail revenue.

Publications Details

Publication date: September 2015

Authors: Nitin Bhas & Joe Crabtree

Contact Jon King, Sales & Marketing Manager, for more information:

Jon.King@juniperresearch.com

Juniper Research Ltd, Church Cottage House, Church Square,

Basingstoke, Hampshire RG21 7QW UK

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