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Who’s Going to Buy a Virtual Reality Headset?

Who’s Going to Buy a Virtual Reality Headset? Obviously this was a key question considered when we started to construct our market sizing analysis of the Consumer Virtual Reality market in late 2013.

Our market forecast covers the period 2014 to 2018 and takes into account the initial developer kits made available by headset manufacturers as well as the initial consumer markets that will embrace VR technology.

Three primary markets have been identified for consumer VR, as follows:

Enthusiasts, Hardcore Gamers and Innovators

The VR enthusiasts market purchased circa 60k units of the Oculus Rift DK1 and circa 30k units of the DK2 have already been pre-ordered. Who are these enthusiasts? Well, it’s the 9.5k people that backed Oculus VR on Kickstarter, supplemented (with overlap of course) with the 28k members of the highly active Oculus Reddit group. These people come from a mixture of IT, the game development industry, marketing/ad agencies and the like.

As more headset manufacturers release developer kits (we expect two more this year) we forecast total 2014 sales to exceed 200k. In 2015 we estimate this element of the market accounting for just over 1m unit sales as headsets such as the CV1 (from Oculus) along with the launch of the Morpheus headset from Sony and other start-ups bring their devices to market.  Unit sales from the Enthusiasts/Hardcore Gamer/Innovator segment are then predicted to rise to 2m in 2016 then up to 4m by 2018.

Perhaps the term ‘Hardcore Gamers’ is a little harsh or even slightly out of date. What is meant by this classification is consumers happy to spend significant amounts of their time and disposable income on gaming. And gaming in this sense is defined as MMORPG-type games along with virtual worlds such as Second Life. Importantly with this segment of the market the PC (as opposed to the console or tablet) is the access-point.

Before the other two primary consumer market drivers are explained, here’s a chart showing annual unit sales from all three segments. Continue reading →

The Face Race: Virtual, Augmented & Mixed Reality Competitor Matrix.

Get ready for the Face Race as the number of companies developing and launching Virtual Reality, Augmented Reality and even Augmented Virtuality devices starts to ramp-up.

Sure, companies like Oculus VR and Sony (for virtual reality) and Google (for augmented reality) are getting most of the headlines but there’s a whole lot of competition heading their way.

Using the rather useful Reality–virtuality continuum we’ve laid out the current market for companies in the sector and their relative stage of development. First-up, let’s start by explaining and defining the spectrum.

Reality–virtuality continuumStarting on the left we have the spatial real world – what we see and experience with our bodies without any technological enhancement.

Moving along the spectrum, the first technological enhancement is Augmented Reality. This is a live view of the real world with a small proportion (under circa 25%) of digital information added (i.e. augmented) into our field of view. The best example of an AR device is Google Glass.

Jumping to the far right, we have Virtual Reality. Virtual Reality is a 3D virtual environment accessed via a headset. VR is 100% immersive meaning the wearer of the headset does not see their real-world surroundings. In VR, users interact within a virtual world.

This leaves the middle ground, known as ‘Mixed Reality’ or ‘Augmented Virtuality (AV)’. AV is an interesting area because it covers from 25% digital enhancement right up to 99%. Wikipedia defines AV as ‘the merging of real and virtual worlds to produce new environments and visualisations where physical and digital objects co-exist and interact in real time’.

In later posts we’ll dive deeper into Mixed Reality applications but for now, here’s our competitor roadmap for companies operating in this range of segments.

kzero virtual reality headset map

Starting with Augmented Reality companies, there are two publicly available products, Google Glass and the Vuzix M100. However, there’s both tech titans and start-ups gearing up for market entry. These include Epson and Samsung in the former classification and i2i in start-up mode. We anticipate all three of these products being available within six months. Expanding the time range, Sony, LG and Microsoft are all rumoured to be working on their own versions of augmented reality. Continue reading →

The Evolution of Virtual Worlds, Part Three. User Generated Spaces

We’re already up to part three in our series exploring how virtual reality will drive the future direction of the virtual worlds sector. Part one laid out the foundations of the market and part two explored Social Virtual Reality. Also, here’s a Slideshare presentation. In this article we’re diving in (literally) to User Generated Spaces.

Starting with a definition:

User Generated Spaces are virtual environments created by individuals for their personal use and enjoyment, accessed and explored using virtual reality.

This is a sector that is already massive in the browser, driven greatly by UGC VWs such as Second Life, IMVU and Minecraft. Interestingly, UGC activities in virtual worlds is popular across all age ranges. Minecraft has a user sweetspot in the tween and early teen bracket, IMVU appeals to late teens and the average age of a Second Life resident is late thirties.

Platforms and applications that have UGC functionality as a core mechanic are very engaging places due to two key activities, namely Crafting and Sharing.

‘Creating stuff’ takes time. People take great pleasure in crafting objects and environments which leads to session lengths measured in hours as opposed to minutes. And the output (i.e. what they create) is limited only by imagination. A quick Google image search using ‘Second Life’ or ‘Minecraft’ demonstrates the breadth of creation in existing virtual worlds. This includes real-world buildings and places right through to re-creations of movie sets. Basically, UGC allows people to create things they’re already interested in, as well as imagineer. Continue reading →

The Evolution of Virtual Worlds, Part One.

This is the first in a series of four posts exploring how virtual reality will drive the future evolution and direction of virtual worlds towards Social Virtual Reality – what we’re calling ‘Virtual Worlds 3.0′.

It’s important to lay-out in the first instance how we got to today, moving through VW1.0 and 2.0. Using the definition of ‘a real-time multi-user virtual environment that can not be altered by the user’, VW1.0 was heavily driven by the KT&T (Kids, Tweens and Teen) market, with registered account growth from this segment reaching 1bn in 2013 and an active user base in excess of 250m account globally. (Note that we’re focussing more on social VWs rather than game-based MMORPGs and the like).

The graphic below (the KZero Universe chart) visualises the tween and teen segment of the virtual worlds marketplace.

kzero universe q2 2014 seg2

Many of these virtual worlds have amassed multi-million registered account bases by creating immersive environments based around activities such as socialisation, avatar dress-up, multi-player experiences questing and exploration. And, in many ways these virtual worlds have proved popular because they offere ‘visual social networking’ (via avatars) before the concept of mainstream social networking as we know it today. They offer users the ability to be in the same ‘place’ at the same time as other people, albeit with in most cases a 2.5D perspective, viewed via web-browser.

Screen Shot 2014-05-12 at 14.18.45In addition to existing IP branded platforms such as Playstation Home, Build-a-Bearville, Barbie World and Fusion Fall being popular, brand-new IPs such as Moshi Monsters, Club Penguin and Poptropica demonstrated the appetite for younger users to explore in and engage with virtual worlds.

Importantly, a key differentiator between this stage of the market (VW1.0) and the next, was the fact that users had no or little control over the environment – the virtual world could not be modified by them. In other words, User Generated Content (UGC) was not possible, which leads us to VW2.0.

We classify the second evolutionary stage of the virtual worlds market as VW 2.0, defined as a ‘A VW that allows the user to create/modify their environment’. By this of course we mean UGC….

Interestingly, some UGC-based virtual worlds actually existed before some of the more popular VW 1.0 platforms, with Second Life being the most prominent one. But, it was not until Minecraft became a global phenomenon that the concept of creating ‘virtual stuff’ hit the headlines and continues to do so. The advent of UGC worlds such as Minecraft, Roblox and Stardoll pushed global registered accounts up to 1.3bn and active users to 350m. Continue reading →

Fairy Forest Oculus Rift Virtual Reality Walkthrough Videos

Last week in collaboration with Dubit we released Fairy Forest, our first demo experience for the Kids/Tween market using the Oculus Rift. Read the full article here.

The Oculus demo is available to download from the WeArVR gaming portal. For those of you without a Rift, here’s a couple of walkthrough videos. The first one shows Fairy Forest in full single screen mode and the other is the Rift-enabled version. Enjoy. And, feel free to contact us if you’re thinking of developing content in virtual reality.

Further information:


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