Smartphone virtual reality faces challenges despite sales

There will be nearly 60 million smartphone VR (virtual reality) headsets shipped in 2021, an increase of around 240 percent on an expected 16.8 million this year, according to research.

However, the lower price of these devices means they will only account for 7 percent of hardware revenue.

And while millions of consumers are already using VR on smartphone-based devices like Google Cardboard and Samsung Gear VR, developers need to go beyond the simple “experience-based” apps currently available and offer “compelling content” to keep users engaged, said Juniper, which did the research.

The research, Virtual Reality Markets: Hardware, Content & Accessories 2016-2021, also found that the current freemium model and lower-priced content will impact price expectations going forward.

Thanks to the amount of demo and sub-$30 games and experiences on the PC, consoles will be the only platform where cheaper prices are not already the norm.

Smartphone VR will have particular problems here, said Juniper, as less than 5 percent 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.

“Ultimately, smartphone VR games will follow a similar pattern to other mobile apps, where the market is dependant 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,” said Juniper.

It added that a largely freemium market will impact the quality of smartphone VR games. James Moar, the report author, said: “Many consumers are likely to try smartphone VR because the hardware is relatively cheap, and then turn away because of low-quality free content.

“The best opportunity for smartphone VR is in providing subscription media, from film and series streaming to news broadcasts, to supplement existing online services.”

@AntonySavvas