Virtual reality entering critical phase putting content developers in the hot seat

Australian sales of virtual reality headset exceed 200,000 units in 2016

SYDNEY, AUSTRALIA – Sales of virtual reality headsets are off to a strong start in Australia with more than 200,000 units sold in 2016, according to a new study by emerging technology analyst firm Telsyte.

The Telsyte Australian VR & AR Market Study 2017 shows that 216,000 VR headsets were sold in the calendar year 2016, with mobile VR taking around 70 per cent share of units sold. However, nearly half of all device revenues were generated by the Sony PlayStation VR which is experiencing strong initial demand from video gamers.

Telsyte’s survey of Australian consumers (16+ years of age) shows almost half of those looking to purchase a VR headset are interested in using it for games, movies or entertainment purposes.

Nearly half of all Australian households currently have a game console making it fertile ground for early adopters.

Telsyte estimates VR penetration will reach 25.5 per cent of households by 2021, based on attachment rates of headsets to VR capable smartphones, games consoles and higher end gaming PCs.

Telsyte believes the key driver for the adoption of VR headsets will be support by content producers, in particular the AAA games titles and franchises. However, many production houses are waiting for broader adoption and a clear winner to emerge before making large scale investments.

“We are entering a chicken and egg scenario with VR adoption,” Telsyte Managing Director, Foad Fadaghi says.

“Developers are looking for a growing base of users before making large investments, at the same time mainstream technology buyers are waiting for killer VR content or applications,” Fadaghi says.

The wide range of VR products available is also impacting consumer and developer uptake. Telsyte believes that the choice of three main platforms (mobile, console, PC) and four main ecosystems (Oculus, PlayStation VR, HTC Vive/Stream VR, Google Daydream) is impacting consumer purchase decisions. This will be further exasperated with more options in H2 2017.

Telsyte research also shows early adopters are looking for a “distraction from reality”, although VR is typically used in small doses. Nearly half indicated “they enjoy playing online games with friends”, 58 per cent indicated “they often feel stressed” and 49 per cent indicated they have “very little free time” (24%, 18% and 11% higher than the average Australian respectively).

Telsyte’s assessment of VR hardware and software shows most early devices on the market are in need of advancement to help the overall market grow. Notwithstanding the health and safety concerns, VR hardware needs to become less visible, lighter and untethered, while software and content developers need to harness the technology better with less “demo” orientated releases.

For further information on the study or media inquiries contact:

Foad Fadaghi
Managing Director
Tel: +61 2 9235 5851
Twitter: @foadfadaghi

About Telsyte’s VR & AR Market Study 2017

Telsyte’s Australian VR & AR Market Study 2017 is a comprehensive 102 page report and advisory service offering subscribers:

  • Market sizing estimates, platform and vendor market shares, hardware revenues and forecasts

  • End user trends across platforms

  • Application development strategies

  • Purchase intentions and use cases for VR/AR

  • Scenario based forecasts and insights on platforms

  • Small business usage and intentions on VR/AR

  • Device profiles and ratings

  • Audience estimates and forecasts useful for contentand application developers

In preparing this study, Telsyte used:

  • Interviews conducted with executives from VR and AR vendors, retailers, software developers, game publishers and channel partners.

  • Hands on testing of devices by analysts, including pre-release and post release products.

  • An online survey of a representative sample of 1,060 Australians 16+ years of age conducted in October 2016

  • An online survey of 302 CIOs and IT decision makers in Australian and New Zealand organisations with 20+ employees (Australia) and 10+ employees (New Zealand) in August 2016

  • Financial reports released by manufacturers, publishers and service providers.

  • On-going monitoring of global and local market trends and vendors.

About Telsyte

Telsyte delivers strategic insights and advisory services to businesses that are producing, or are impacted by, disruptive technologies. Telsyte publishes studies into emerging consumer and business markets and provides custom research and advisory services. Telsyte is an independent business unit of DXC Technology .

The material in this article is copyright protected and not intended to be altered, copied, distributed or used for any commercial or non-commercial purpose, except for news reporting, comment, criticism, teaching and scholarship.