IDC expects China's VR market to expand 441.2% in 2017 after experiencing a roller-coaster ride in 2016.
China's VR industry’s expansion is predicted to be more than four-fold in 2017 as more major players enter the industry, and new and exciting content drives growth.
IDC expects China's VR market to expand 441.2% in 2017 as competition intensifies and the market becomes more diverse. Based on IDC’s prediction, the VR market is expected to exhibit the following traits this year:
The VR industry in China experienced a roller-coaster ride in 2016, as strong growth at the beginning of the year sputtered into a disappointing finish at the end of the year. Some media outlets have declared that a winter has arrived for China VR industry. But is this true?
IDC data shows that VR shipments in China reached 204,000 units in 2016 Q3, up to 367.9% from previous quarter, contrast to the sluggish growth from 2015 Q3 to 2016 Q1, when many consumers took a wait-and-see approach after major international VR brands announced that they were entering the Chinese market. The VR market began to pick up speed in 2016 Q2 and the growth accelerated in 2016 Q3-Q4 thanks to global shipments of Sony PSVRs. Oddly, VR sales were weaker when VR products became a hot topic in the media, while shipments expanded quickly as the media started to express concerns of the market. But what caused this discrepancy?
Figure 1: IDC’s VR device shipment growth.
Before 2016 Q2, the majority of VR vendors in China were local companies and most of these were start-ups. But then HTC, Samsung, Sony, LeTV and others entered the market, and industry heavyweights Xiaomi, Huawei, Microsoft and Lenovo followed, leaving little room for start-ups. Some start-ups were put out of business before shipping a single unit. In the capital markets, VR hardware start-ups looked too risky, leading to a so-called VR capital winter. But investors were mainly cautious on investing in VR hardware makers. IDC believes that the capital markets remain optimistic about investing in start-ups for VR content, leaving the door open for hidden gems such as Rovio and Supercell.
2017 will be a year of promising opportunities and great challenges for China VR industry. As more and more interesting VR content becomes available and business models diversify, a number of companies may close or face stagnation. However, the industry does not appear to be in a winter. Rather, it seems that spring is just around the corner for China VR market.