Digital and linear content producers alike are increasingly experimenting with virtual reality, creating narrative shorts, documentaries and even musical content available in 360. And though the first consumer headsets for VR are just hitting the market this year, research firm Tractica estimates the industry will be worth more than $22 billion by 2020.
Tractica’s study, published Jan. 15, looked at sales data (examining the sales of headsets, accessories and app downloads) from previous years while consulting with experts in the retail, electronics and content industries to create a global market forecast for the future of VR.
According to its findings, the value of the VR industry is set to increase from just over $4 billion to more than $22 billion, thanks mainly to the increased sales of high-end devices, such as the recently released Samsung Gear VR headset and the soon-to-be-released Oculus Rift and HTC Vive. Tractica predicts 76.7 million headsets will be shipped worldwide by 2020, bringing the total units sold by that year to 200 million.
An executive summary of the report states that the increase in value of the VR industry will come from three areas: viewing devices, accessories (such as VR-specific controllers and remotes, locomotion devices and hand-tracking devices) and content.
The value of headsets and accessories are predicted to increase gradually over the next four years, according to the study. Content value, meanwhile, will see exponential growth. Currently, it is estimated that VR content makes up less than 20% of of the $4 billion industry. By 2020, content will represent approximately 68% of the industry’s market value.
Many publishers have already delved in to high-profile content creation across all genres. The Associated Press, for instance, recently paired with L.A.-based prodco and VR studio Ryot Media to produce a series of stories in VR, including a 360-degree look at the inside of a migrant camp in Western Europe. Time Inc. fashion and lifestyle brand InStyle recently debuted its first VR experience, featuring Drew Barrymore at a fashion shoot, and Lionsgate teamed with Samsung to offer an extra virtual-reality experience to accompany the release of the latest The Hunger Games installation.
Tractica principal analyst Craig Foster said in a statement that though VR is not a new technology — the first VR headsets surfaced in the ’90s, though most failed due to high cost or low quality — VR is currently set to enter a “golden age.” And this time, he said, no one wants to create a device that flops.
“The second coming of virtual reality is upon us,” Foster said. “Industry participants are keen to ensure that products are fine-tuned prior to release in order to avoid a disappointment.”
Despite its optimism, the report highlighted several big challenges that could potentially stand in the way of VR’s mass adoption, and will have to be solved if the technology can realize its potential.
One of the challenge is the need to tether devices to a computer or gaming console. Currently, most VR devices have to be powered by a powerful computer or console. But users will get more out of the experience if they have the freedom to roam, according to the study.
For that reason, the study predicted that mobile-based VR (through headsets such as the Google Cardboard and the Samsung Gear VR) will become more popular, and more smartphone makers will invest in creating devices that can offer higher-quality video and sound, creating more seamless VR experiences.
Overall, Tractica expects that mobile VR devices and accessories will make up more than 96.4 million of the units shipped worldwide by 2020.
The report also identified 360 degree sound as a new “must-have” for VR, stating that many technology companies that create VR headsets report increased investment in surround sound technology optimized for VR headset viewing.