Smartphones will bring VR to the mainstream, but engagement and price margin will remain a serious challenge, a new study by Juniper Research claims.
According to Juniper’s latest ‘Virtual Reality Markets’ report, nearly 60 million smartphone VR headsets will be shipped in 2021, signaling an increase of around 240% on an expected 16.8 million units this year.
However, Juniper researchers say even though the Mobile VR will be hugely popular, the lower price of these devices means they will only account for 7% of hardware revenue. Developers will need to go beyond the simple experience-based apps and offer compelling content to keep users engaged.
“Many consumers are likely to try the platform because the hardware is relatively cheap, and then turn away because of low-quality free content,” said report author James Moar in a written statement. “The best opportunity for smartphone VR is in providing subscription media, from film and series streaming to news broadcasts, to supplement existing online services.”
Here are the other key findings from the report:
- Freemium and lower-priced content will impact price expectations going forward. Thanks to the amount of demo and sub-$30 games and experiences on PC, consoles will be the only platform where cheaper prices are not already the norm.
- A largely freemium market will impact the quality of smartphone VR games.
- Smartphone VR will have particular problems here; less than 5% of apps downloaded for smartphone VR are charged for at the point of purchase. In-app purchases are much more common for this platform, providing extended experiences or expanded content for a fee.
- Smartphone VR games will follow a similar pattern to other mobile apps, where the market is dependent on a small number of high-spending users for most of its revenue. This is in marked contrast to PC and console VR, where the market remains mostly pay-at-transaction.