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  • Writer's pictureAndrew Collins

The Development of the VR Industry in China

Updated: May 30, 2019

Virtual Reality (VR) is widely predicted to be the next huge development to hit the tech world. In China, it has rapidly been growing in popularity since the start of 2016 as hardware has become more widely available.

It has not yet achieved the epidemic popularity of Augmented Reality (AR) systems, Pokémon Go being the obvious example, which was able to integrate itself into already widely used devices. One major difference between VR and AR experience is the level of immersion, you only have to watch snooker great Ronnie O’Sullivan take a tumble whilst testing a VR snooker system to see how powerful and convincing these systems already are. AR causes a ‘that’s clever’ reaction whereas VR will induce more of a ‘that’s extraordinary’ feeling.

Recently, The China Centre for Information Industry Development (CCID) released a report about the Chinese VR market. According to the report, in 2016, the VR market was worth 5.6 billion RMB (~$835 million). They forecast it to increase to 55 billion RMB (~$8.2 billion) by 2020. These are vast numbers and rates of increase, however with around 2.5 million new headsets being shipped to China this year alone they are far from a real stretch.

By 2020, assuming demand has been assessed correctly, VR technology will occupy a 34% share in the Chinese hardware market, which devices are likely to suffer as a result is hard to predict, however given China’s trend towards consumption via mobile devices it is not hard to see it being the classic computing sector.

As for the VR content market, which is obviously key to maintain and build demand for headsets. It has been predicted to jump from 670 million (~$98 million) to 17 billion RMB (~$2.5 billion) over the same time scale. The first area that is expected to become widely available and successful is gaming and immersive video. With around 504 million regular users of streaming sites in China, the audience is there and no doubt ready to consume the new style of content.

Tencent has been quick to get in on the action, publishing their VR Software Development Kit and its development plan, which includes a hardware store and video, advertisement and gaming content. Additionally, given Tencent’s current portfolio including WeChat and QQ , it has been suggested that VR may allow people to connect with virtual images and sounds through new or adapted social media platforms. How this will work remains to be seen, however, the opportunities that it could afford for marketing and fan engagement purposes are practically boundless.

What will be interesting to observe is the way in which VR can be integrated into daily life with uses other than watching video content, without this it is likely to be relegated to the realms of relative anonymity and extreme gaming. What manufacturers and investors will be very keen to avoid is the fate of 3D TV, once also touted as the next tech must-have, now irrelevant due to lack of content and inspiration.

What we must do is wait and see what innovations the VR market is able to come up with in the coming years.

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