New research published by Digi-Capital has concluded that in 2017, America has delivered more AR/VR revenues than China. However over the next five years, growth from China could see the nation dominate AR/VR in the long-term.
According to the latest quarterly report from Digi-Capital, the stats show that China has potential to earn more than $1 for every $5 spent on AR/VR globally by 2022. China is in an excellent position to service the local Asian market, as well as its own, and with the overall market as a whole, the region could deliver around 50% of AR/VR global content revenues in the next 5 years.
“Since 2015 we’ve said that ubiquitous AR could dominate focused VR long-term,” explained Tim Merel. “While the two markets might merge into unified ‘XR’ (or some other acronym) one day, they could have very different dynamics for the foreseeable future. AR (mobile AR, smartglasses) could approach 3.5 billion installed base and $85 billion to $90 billion revenue by 2022, while VR (console, PC, mobile, standalone) might deliver 50 to 60 million installed base and $10 billion to $15 billion revenue in the same timeframe.”
Segmenting the sector into VR and AR, in the United States, entertainment is the main use case and revenue driver with gaming, video and location-based entertainment accounting for two-thirds of revenue, while hardware would take just over a quarter.
“The US has a significant installed base of Sony’s VR capable games consoles (banned in China until recently) and high-end VR capable PCs. It also has highly profitable core gamer economics, which ould give it an advantage if premium standalone VR (neither PC nor mobile tethered) hits its stride in a few years,” Merel said. “China on the other hand, has a significantly larger mobile user base, “mobile/standalone VR’s trajectory took a fundamental hit last year, following the launch of mass-market mobile AR.”
Looking at the overall market, Digi-Capital has concluded that the US would take around 1/5 of the global VR revenues by 2022, which positions it slightly ahead of China. However, the continental United States when compared to Asia is significantly smaller, as the APAC countries accounts for just under 50% of the total revenues.
AR, looks very different though, and Digi-Capital has postulated that if and when Apple adds its AR product, and with the release of Apple’s ARKit, then Asia will dominate the market. This is predominantly due to the significant number of mobile users who would take advantage of the tech.
Digi-Capital has published an interest quarterly insight and I would recommend that you head over and read its update. While I have covered the gist of the report, I have also not included some key aspects which should be considered.
That being said, the US, and Europe should look towards developing its B2B, and B2C AR and VR programs. While we may not have the user base of China, or APAC as a whole, we most certainly have the ability to compete for high quality content and applications which could be beneficial to us, and the overall development of the technology.
