The Rio Olympic Games in Rio de Janeiro uses virtual reality (VR) technology to play the game and strives to restore the game scene more realistically. This is the first time the Olympic Games has been combined with VR.
The concept of VR was quickly heated up by a U.S. acquisition in two years ago, and it has caused capital enthusiasm in the Chinese market. Ambitious startups and sensitive investors are aware of the possibility of large-scale commercial application of VR, but have to face the cruel reality of immaturity and lack of content.
An unexpected acquisition
Virtual Reality (VR) is simply referred to as VR and is a technology for generating virtual scenes using computers. The current VR products are mainly head-mounted virtual reality glasses, namely VR head display.
VR is actually not new. As early as the end of the 1950s, the filmmaker Morton Helrich invented the first VR device. In the 90s of last century, VR had once set off an upsurge, but the technology was too rough to get it over.
After years of silence, the VR industry was once again triggered by a Facebook acquisition.
In March 2014, Facebook acquired Oculus for a two billion dollar price. This is a small company with less than 80 employees and no formal products. The founder was only 21 years old.
Zuckerberg took a look at Oculus's advanced VR technology and development prospects. He issued a document explaining that "one day, immersive virtual reality will become part of the daily lives of billions of people."
This news triggered Google, Sony, Samsung and other technology giants to enter the VR boom, China's VR market is also expanding. According to the data from iMedia, the market size of China's virtual reality industry in 2015 was 1.54 billion yuan, and it is expected to reach 5.66 billion yuan in 2016. By 2020, the scale of the domestic market will exceed 55 billion yuan.
Finding market flashpoints
From the perspective of product form, VR products are divided into VR helmet (+PC), glasses (+ mobile phone), one machine (independent use) three categories. The PC side is represented by Oculus's Rift, Sony's PSVR and HTC's Vive. The mobile terminal is represented by Google's Cardboard and Samsung's Gear VR.
CEO Hu Bin believes that in the Chinese market, VR glasses with relatively low cost and venue requirements will become the mainstream and evolve into an all-in-one machine. " Users will initially purchase products that are less than 200 yuan, and after forming certain usage habits, they may be willing to upgrade to an all-in-one machine worth 1,000 yuan."
In terms of applications, VR technology can be combined with multiple fields such as video, games, medical care, education, and architecture. Startup companies and investors are looking for opportunities.
"The biggest flash breakpoints for VR should be in the video and gaming arenas," said Analyst Zhao Ziming, an analyst at Analysts. "In these two areas, the user experience is very clear and the profit model is also relatively mature. There is a great chance of direct liquidity."
Hu Bin also likes the combination of VR and video. When it comes to improving the experience, he said that VR products are now equipped with 2K screens, which are grainy when watching videos. It is estimated that by the beginning of 2018, the 4K screen should be able to realize large-scale commercialization, and the user will have a more realistic visual experience.
"More than 90% of hardware vendors will die"
Currently, there are more than 100 companies that manufacture VR equipment in China. The lack of core technologies and the serious phenomenon of cottages are the main problems facing them.
According to industry insiders, most companies in China that produce VR hardware do not have core technology. They help others from the inside to the outside. The majority of head-display devices on the market today are like the cottage machines before the emergence of smart phones. Sooner or later, they will be squeezed out. .
Hu Bin believes that the VR hardware market competition is very encouraging and it is expected that more than 90% of the companies will die.
There is a large number of low-price VR glasses on the Internet, and only a few dollars are sold cheaply. Hu Zhuojun, senior investment director of Hejun Capital's VR Industry Fund, said that in Shenzhen and other places, the shipment volume of cottage VR equipment is huge, reaching tens of millions each year.
The reason behind this is that companies are unwilling or unable to put sufficient funds into R&D. Hu Bin said that Oculus spends hundreds of millions of dollars each year on research and development, and it is difficult for Chinese startups to reach this level.
The high cost of hardware research and development has deterred some companies. According to Xiao Han, head of research and development at LeTV's VR terminal, taking VR lens R&D as an example, the cost of multiple mold opening is as high as a million yuan. If you want to expand production capacity, this cost will be multiplied several times.
"The lack of content is the real bottleneck."
The crux of the Chinese VR industry is not just hardware. Zhao Ziming believes that lack of content is the real bottleneck of VR development. The old saying "software determines the hardware" is still applicable in the VR market. There is not enough content to drive it, and VR devices can no longer be popular.
Many merchants who sell VR glasses on the Internet choose sexy beauty advertising pictures, and some of them are marked with “Official Men's Favorite, Sending Massive Resourcesâ€. Open a VR content download platform, nearly half of the content on the homepage is "beauty, supermodel."
“The vast majority of men who buy this kind of glasses are for 'watching',†said one industry insider who declined to be named. “The game? They simply don't, because there is almost no VR game enough to attract them.â€
The popularity of beauty videos shows the weakness of VR content from one side.
Take the example of several VR products experienced by reporters. The blue sky, white clouds, and green space in the virtual roller coaster scene are like watercolors drawn by children. The colors and shapes are extremely exaggerated. Although it is a 360-degree panoramic view, it is difficult to make people feel There is a sense of immersion; the scene of the gun battle game is relatively true, but the storyline is single.
The difficulty in making is the main reason for the lack of content. Zhao Ziming said that due to the inconsistency of hardware standards, it is difficult for content providers to adapt to multiple standards one by one; furthermore, not all existing formats are suitable for extending to VR technologies, for example, if they appear to be relatively lengthy in film and television productions. Lens, VR this form of presentation will distract the user.
There is still a large influx of capital
The fact that technology is not mature and content is scarce has not stopped large amounts of capital from influencing the VR market.
A Beijing technology company is engaged in VR and university education related business. The company’s chairman revealed that after the concept of VR was heated up, some investors had thrown 50 million yuan to require the company to “expand its scale quickly†and cover primary and secondary schools. "Our ability is limited, but investors do not want to listen to the truth, but think the company is too conservative," he said.
The "China Virtual Reality Industry Application Research Report 2016" released by the Analysys Think Tank shows that the amount of investment and financing related to VR content in China has increased from 35 million yuan in 2014 to 240 million yuan in 2015.
Huzhuo Zhuo said that there are about 1,500 VR-related startup companies on the market. There are very few companies that can make profits, have cash flow, and do not have more than 20 truly profitable companies.
"The capital market is optimistic about VR's development prospects, but it is still too early to talk about profitability. When companies survive the burning phase, they have a large market share and high gross margins before they can make money." Bin said.
How far is VR from popularity?
In the eyes of people in the industry, despite the potential for overheated capital, the prospects for VR are still promising.
Zuckerberg said in an interview with Business Insider that the marketization of VR technology still has a long way to go. Talking about the large-scale adoption of VR, he said, “I think it takes at least 10 years.â€
Hu Bin thinks it does not take so long, especially the popularity of mobile phone VR. "It will be a few years, but it will be a short one or two years," he said. "When the 4K screen is large-scale commercialized, the mobile phone VR may be rapidly popularized."
Guosen Securities analyzed in the report that at the end of 2016, the VR industry will usher in a wavelet explosion driven by the game market, and usher in a rapid development period within five years. In 2018, it will become an important watershed. The content links in the industrial chain will accelerate growth and become the most valuable link in the virtual reality industrial chain.
"VR is undoubtedly a huge market, and the general direction is correct," Hu Bin said. "Population is only a matter of time."
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