Over investment in new hardware has overwhelmed China’s booming virtual reality (VR) market. For the industry to grow, capital needs to move into content production, an industry expert said.


Neo Zheng, senior analyst of American consulting company International Data Corporation (IDC), told China Daily on Monday that only more investment on content production and upstream sectors, such as gesture control and voice control, can make the industry stronger.

“As more and more tech giants entered into the VR hardware production field, the sector saw saturation of investment. We predict big growth in VR content investment from the second half of this year to the beginning of next year, mainly in software and game and video development,” Zheng told China Daily

According to IDC, there are three major device categories across the augmented and virtual reality markets, including screenless viewers that use the screens of specific smartphones to drive an AR/VR experience; tethered Head-Mounted Displays (HMDs) that utilize an existing compute device such as a PC, game console, or even a smartphone to drive a head-worn display and standalone HMDs that integrate processing within the head-worn display itself.

With the global consumer electronics market falling into a slump as sales of PCs, tablets and smartphones decline, the industry needs to find other growth points, said Zheng.

Global titans such as Facebook, HTC, Samsung Electronics and Sony and domestic brands Huawei, LeEco Holdings and Xiaomi are rushing to create new products for the sector, especially for screenless viewers. That’s because these viewers are the most popular kind due to their lows price of only 300 to 600 yuan.

“In 2016, the shipment of screenless viewers is predicted to account for 74% of all VR devices,” Zheng added.

According to the latest research released by China Electronics Standardization Institute and Xinhua News Agency, an expanding community of companies, both large and small, are working flat-out to make VR part of people’s daily lives. It said the Chinese VR market was worth 1.54 billion yuan ($236 million) in 2015, and is expected to rise to more than 5 billion yuan this year.

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