Why VR is Still Promising
Last holiday season, I brought my new VR headset home to my parents in a suburban town (the kind with limited access to the arts, but no shortage of dairy farms and almond orchards). My father, a self-professed hater of console video games, was shockingly eager to give it a try. He was thrilled by the experience, proving to me the universal appeal and true opportunity of VR once the common purchase barriers are broken down.
The VR Market Today
According to Morning Brew, approximately 1 in 5 Americans have tried Virtual Reality, of which 90% have expressed a likelihood to use it again. When we isolate the data to younger generations (Millennials and below), the outlook is optimistic, with >40% of millennials and Gen Z expressing excitement for AR and VR technologies.
Source graphic: https://www.emergingtechbrew.com/stories/2021/07/07/exclusive-nearly-one-quarter-americans-used-vr-ar-headset#
According to another study, 13% of U.S. households own a VR headset system. VR headset owners skew younger, consider themselves “early technology adopters,” and tend to play video games on a regular basis. The top purchase driver was the desire to play video games on it. However, among those who have not purchased, over half expressed they’d be more interested if headsets “had multi- use functionality like a tablet or a smartphone, rather than only being useful for playing games.”
Apple’s Impending Disruption
Currently, the VR headset market is dominated by Oculus and Sony (PlayStation). However, in 2024, Apple enters the playing field with the new Apple Vision Pro. The new product is still very price-prohibitive for many Americans. Still, it will be an opportunity to introduce or re-introduce VR to audiences through Apple’s hands-on demonstrations via brick-and-mortar stores. As the vast majority of VR testers express a desire to use it again, that initial test introduction will be highly effective in combatting many false assumptions consumers may have about enjoyability. Consumers who fear motion sickness will see the great strides that have been made to combat it. Non-gamers will discover the approachability of VR games, or learn about the other capacities beyond gaming. And Apple shows potential to expand that capability, advertising the Apple Vision Pro as a much more utilitarian device, often presenting it as a tool — a strategy that may resolve the top barrier for non-purchasers. With the data privacy that Apple provides, consumers will feel comfortable with leveraging the tool for critical tasks if the system is intuitive.
Still, Apple’s Vision Pro is likely shipping in relatively small quantities at launch, indicating conservative sales expectations — likely due to the extremely high cost of the system. Instead, Apple’s disruption will come through mass market exposure and product education. It will drive excitement for VR headsets in general, and renew the race towards a VR future.
Future potential
The Pandemic has created unique demand. While live experiences are often hailed as the future post-pandemic, their accessibility is often limited to coastal and urban areas. Herein lies VR’s unique proposition. The core market for VR extends beyond the tech-savvy elite; it reaches Middle America — individuals who may not afford to travel to places with access to arts and cultural events, democratizing experiences. Given the pandemic caused many urban dwellers to move to suburban or rural areas, these consumers will crave this level of access — as well as more ways to engage with their newly long distance friends. In fact, 4 in 10 consumers say that they’ve become more interested in VR technology as a direct result of the pandemic(compared to just 8% who say that the pandemic has dampened the appeal of VR). And, in a study by Bain & Company, half of young gamers reported they’d rather spend time with friends in a game than at a local hangout, building validity for the future of long-distance metaverse interactions and experiences.
Source graphic: https://www.bain.com/insights/young-gamers-and-the-metaverse-how-the-rules-of-success-are-changing/
Shareability barrier removal will drive purchases. Video game consoles exploded, in part, through shareability. During the first video game boom, if a child got an Atari for their birthday and competed in a thrilling match against their friend, that friend likely came home to put and Atari at the top of their own birthday wishlist. Today’s VR headsets face shareability challenges: sanitation concerns make swapping headsets a more difficult endeavor, and external viewing on a secondary screen will make an observer motion sick. The best way to play with someone or watch someone play is through a second VR headset. Unlocking multiplayer, both through pricing reductions and compelling multiplayer game or third party viewing developments, will unlock the consumer referral market.
Older generation consumers could become a long-term market. While much of the entertainment industry often focuses on the 35 and under crowd, gamers 35 and over actually make up the majority of mobile gamers– and there is a direct and positive correlation between age and spend on mobile games. Upon technology adoption, like my father, they’ll find VR to be an approachable platform, unlike console video games. Much like the mobile gaming phenomenon, VR needs to find its “Flappy Bird” moment — a universally appealing, simple, and addictive experience that captivates a broad age audience.
Source graphic: https://www.mmaglobal.com/research/myth-busting-mobile-gaming-demographics
Conclusion
In a world suddenly obsessed with AI, Virtual Reality (VR) has taken a backseat in the headlines. However, this technology is merely sleeping in the background, about to take off again in 2024 — bridging the gap from emerging technology to household product. Previous barriers that have slowed its mainstream adoption are losing strength, and new technologies have made VR an even more promising as the technology of tomorrow.
