Telsyte: Oz Consumer VR Demand Set To Surge

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Technology analyst firm Telsyte has forecast that demand from Australian consumers will outweigh supply in the VR headset market this year.The Telsyte Australian VR & AR Market Study 2016 has forecast that 110,000 VR headset units will be sold this year, with sales to further grow to more than 500,000 units per annum by 2020.

Telsyte managing director Foad Fadaghi noted 2017 and 2018 will see strong market growth, with manufacturers ramping up production and more “must have” use cases emerging, while Telsyte predicts the bulk of the initial device demand will be driven by video gamers.

“The strongest pent-up demand is coming from gamers, who clearly see VR as the next frontier in immersive entertainment,” Fadaghi commented.

By way of example, Telsyte states the Microsoft-owned Minecraft game is expected to be a strong catalyst for adoption, with support having been announced for the Oculus Rift and the game demonstrated on Microsoft’s HoloLens.

Segmenting VR headsets into four categories –  computer, mobile, console and standalone – Telsyte forecasts VR for consoles will command the largest share by value in the Australian market for at least the next two years.

Beyond 2017, Telsyte expects the availability of lower-priced products, along with more advanced mobile and PC-based options, will help lift the share of non-console-based VR.

Meanwhile, developers are set to emerge in the local market.

“While some will take a leading position, it is more likely that a wait-and-see approach will be adopted by most organisations to substantiate the non-gamer user base, and for the current range of products to mature,” Fadaghi observed.

The market segments encompassing VR cameras and gaming peripherals, VR product retailers with dedicated demonstration rooms, and online streaming entertainment organisations are also set to benefit.

A Telsyte survey of a representative sample of 1,075 Australian consumers aged 16 and over shows half of Australians are already aware of VR technology, with around 20 per cent indicating a desire to purchase a device, with the most popular devices the Samsung Gear VR, Sony PlayStation VR, Google Cardboard and Facebook’s Oculus Rift.

Games, movies, sports entertainment and education were cited as the main use cases, with Telsyte identifying additional applications such as social networking and live streaming, health and fitness, TV and news broadcasting, and use in business applications.

However, only one in five people are willing to spend more than $400 for a VR headset, which Telsyte notes is substantially lower than the price of most first-generation products coming to market, while many computers and smartphones will require upgrades to be able to use VR and AR add-ons.

High-end games, business applications and education applications are expected to generate the highest average software unit prices, Telsyte found.

Telsyte states that it “does not believe VR, as it stands, will replace existing technologies such as smartphones, computers or tablets”, noting that many VR devices are designed as accessories or companions to other devices.

“Telsyte predicts VR and AR will help revive the more mature smartphone and high-end PC markets,” Fadaghi commented.

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