If it were not for the annual World VR industry conference, many people might have forgotten that there is still such a track as VR in the technology industry. As an industry with no voice on the consumer side for a long time, a conference trying to make VR “industrialized, commercialized and large-scale” may have more significance only to remind people that the VR industry is still moving forward.

Indeed, VR has not died out. It is even rumored that apple and other top brands will join the VR industry. However, referring to the current growth path of China’s VR industry, China’s VR industry needs more than just opening the self hi mode to truly change the world.

Extremely shrinking C-end Market

The technology industry has never lacked “opportunists”.

In 2016, VR technology became relatively mature. With the vigorous rendering of Facebook, the smartphone cake was carved up. Many technology companies turned to the VR track. According to the data of the prospective industry research institute, in 2016, more than 300 manufacturers in China developed VR headsets aimed at the to C (consumer) market. In the same year, the total investment in China’s VR market reached 29.9 billion yuan.

However, to the surprise of most people, the VR market did not grow due to the active promotion of capital and terminal manufacturers. On the contrary, the wind direction of the entire VR market began to turn sharply downward.

According to the data of China Science and technology industry think tank, in January 2017, more than 90% of domestic VR equipment manufacturers have gone bankrupt, and the remaining players are also very few; By 2019, the total investment in China’s VR market will be only 10 billion yuan, a decrease of 2/3 in three years compared with the peak period in 2016.

The main reason why VR devices have fallen rapidly from the high point in just three years is that they have not brought the intended use experience to consumers, and this has brought a series of vicious cycles.

From a technical point of view, VR terminal manufacturers have not solved the problems of screen effect, dizziness, claustrophobia, etc., which have greatly affected the daily experience of consumers. The comprehensive effect of these two aspects has made the VR industry have not explored an effective business model for travel. Therefore, it is inevitable that capital will leave the VR industry.

VR totally dependent on government blood transfusion

Although VR has suffered a crushing defeat in the to C market, the unique product nature of VR terminal also allows it to find a living space in the to B (actually to g, the government) market. According to public data, in 2016, China completed 545 VR related government procurement projects with a total amount of 609.3 million yuan. In 2017, this figure increased to 1223.2 million yuan.

The reason why the Chinese government vigorously purchases VR related equipment is mainly based on two demands: 1. Realistic demand; 2. Long-term strategy.

Although the overall performance of VR equipment is not satisfactory at present, its product characteristics that can present three-dimensional pictures determine its unique value in education, medical treatment, military industry and other fields.

In 2016, the opinions on further improving the equipment work of ordinary primary and secondary schools under the new situation issued by the Ministry of education clearly stated that primary and secondary schools across the country should prepare to set up virtual reality (VR) laboratories. According to the public data of 2016-2017, 75% of the VR related equipment purchased by the government is used in the field of education.

During the transformation from “made in China” to “smart” manufacturing in China, the Chinese government is committed to seizing any industry that may take off and relevant industrial chains. At the end of 2018, the Ministry of industry and information technology issued the guidance on accelerating the development of virtual reality industry, which is committed to promoting the development of VR technology from the policy level.

According to the data of digi capital, with the technological progress and industrial breakthrough, the global VR terminal installation base will exceed 30million in 2023, and the overall market scale will reach 10billion to 15billion US dollars. Wang Xing once said, “better than apple, we should not bet on the two tracks of ar/vr and smart cars at the same time”, which means that in Wang Xing’s cognition, ar/vr can even be compared with smart cars in the future.

Therefore, at this stage, China focuses on supporting domestic VR related industries. The significance at the macro level is that once the core technology has made a breakthrough or the market demand has risen, Chinese VR enterprises prepared early can quickly build mature terminal products by virtue of the first mover advantage, surpassing European and American enterprises.

From G to C, VR industry urgently needs to break the circle

Taking government procurement as the main way of survival is all the wealth passwords of Chinese VR enterprises. However, due to the long-standing depression of VR in the to C market, this “support” from the government procurement end is likely to have a certain negative impact on the VR industry.

Looking at the data of the world VR industry conference in recent years, it seems that the VR industry has been immersed in the “happy township” of to B. Taking the data of 2019 as an example, excluding the conventional enterprise strategic cooperation, most of the 31 cooperation projects for terminal and application scenarios are “government oriented” for education and health care.

If a type of equipment is only dedicated to meeting the needs of government and enterprises, its survival pressure and driving force will be much smaller, and sometimes even serious inertia will occur. For example, at the beginning of China’s new energy industry support plan, some unscrupulous enterprises launched “customized” products specifically for subsidies to defraud subsidies.

What is more worrying is that from the perspective of the industry, with the progress of technology, the VR industry has quietly entered a new period of change.

From the perspective of technology, in 2019, the third stage of hardware revolution of VR glasses – Wireless all-in-one machine has begun. According to zhouyuefeng, chief marketing officer of Huawei wireless network, with the outbreak of 5g, the low cost and low threshold of VR “going to the cloud” will make VR ubiquitous; The popularity of half life has directly doubled the number of VR players on steam platform. This means that as long as there is high-quality content, VR can also attract users.

Based on this positive cycle of content and hardware, in Q1 2020, oculus’ total sales increased by 80% year-on-year. This is the result of oculus’ global out of stock capacity limited due to the impact of the epidemic.

Unfortunately, according to IDC’s data, consumers account for only 21.1% of the current spending on application scenarios in the commercial field in the Chinese market. In this market, its high-end VR head display is still controlled by HTC, Sony, ocolus and other brands.

On the whole, China’s VR industry still has a certain living space, but this space is completely “fixed” on specific needs. Obviously, this is not in line with the normal business law. Everyone knows that the seedlings in the greenhouse cannot grow into towering trees. The same is true of VR industry. Let go of self-esteem, make more efforts in underlying technology, and get out of the extreme dependence on G as soon as possible to face the real consumer market. Only then will VR be a truly mature industry in China.
Editor ajx

Leave a Reply

Your email address will not be published.