Identifying the opportunities present within VR.
Market studies by well-established entities such as Goldman Sachs Investment, the Federal Communications Commission (FCC) USA and Ministry of Industry and Information Technology (MIIT) China underscore the fact that the VR sector has a huge potential over the coming decades.
To help visualise this we will look at research from the Nielsen firm and its subsidiary "SuperData" who study the gaming industry closely.
In 2020, the virtual reality market (hardware and software) was valued at around 40 billion dollars.
In 2016, Goldman Sachs forecasted that the VR sector (Hardware + Software) would grow to $80 billion by 2025.
Globally, the revenue from VR games (i.e., revenue from online library sales, such as SteamVR) is growing annually. From 2019 to 2020 it increased by 25% to reach $589M.
In addition, we can look at the 2018 distribution of consumer interests, with almost 50% of those surveyed identifying games as their primary interest with VR. Based on more recent analysis, the interest in gaming has climbed to an incredible 77%.
VR is of course not limited to gaming, and virtual technologies will permeate into many sub-markets and fundamentally alter the way many services are delivered, such as:
- Real estate
All of these will further drive the proliferation of VR devices.
Here we will focus on VR gaming, which has significantly increased in market size and is growing bigger every day.
This growth can be attributed to three core factors:
- 1.An oligopoly of hardware companies.
- 2.New innovations in VR headset technologies which stimulate the five human senses.
- 3.An explosion in content creation, with new tools and new markets for game publishers.
Let’s explore these factors deeper.
- 1.An oligopoly of hardware companies
Oculus (Facebook), HTCVive (Microsoft), Samsung Odyssey and ValveIndex are the leading companies in the VR market, and between them share a total value in the tens of billions of dollars.
All these companies share one interesting common point: they have their own store where applications and games are promoted. As with mobile application marketplaces like the iOS App Store and the Android Play Store, these game stores normally take a cut of around 30% of sales from developers and indie games publishing their creations.
Currently Oculus has the lead with its online VR games library, and we plan to take advantage of this by publishing Revomon here first. This will allow us to generate our initial revenue, which we will discuss further in the ‘Revenue Streams’ section.
2. New innovations in VR headset technologies which stimulate the five human senses
Virtual reality has become so immersive that sometimes it’s difficult to know the difference between the virtual and the real. In fact, a complete VR experience that stimulates all five senses is already available today through experimental and prototypical devices. As smell and taste peripherals are still in the early stages of their development, we will instead focus on the three other senses. Sight, sound and touch (through tactile feedback) will be the senses through which players experience our immersive 3D world.
VRmixedreality source image
3. An explosion in content creation, with new tools and new markets for game publishers
There is a growing list of new software and game engines that push the boundaries of what game developers can achieve. However two leaders stand out: Unreal Engine and Unity 3D. These are the go-to engines for both indie and mainstream games, and give large studios the opportunity to convert their valuable intellectual property (IP) into a VR games. Some recent examples include Star Wars and Minecraft, both of which have found further success in this new market.
In 2018, global VR game revenue reached around $300 million, increasing to $500 million in 2019. And while 2020-21 sales results are still pending, a significant revenue increase is expected to be reported due to Covid-19 lockdown periods.
The market is still in its early stages, but there is huge potential for breakout successes as VR users are clearly hungry for high-quality games.
More evidence of this growth is easy to find. In a blog post from February 2021, Facebook announced publicly that six titles on the Quest platform had generated more than $10 million in revenue. Furthermore, the top ten games on the store had exceeded more than $2 million in revenue each.
Stats on the top Oculus Quest games above (Credit: Facebook)
This strongly demonstrates the interest of VR by gamers and it would appear that the growth pattern of the VR market is mirroring almost exactly that of mobile apps at the beginning of their era; a strong indication of incredible growth to come.
Although Virtual Reality technology seems new, it has now been around for more than a decade, and companies like Oculus have been key in getting devices into people’s hands. Indeed, Oculus is currently the leader in terms of sales and active users in the VR market, which is why they are the ideal first target for the launch of Revomon.
The collectible monster game category lacks content on VR stores, and currently there is no VR game of a similar type which also utilises blockchain technology with a collectible game. As the time spent collecting monsters in games like Pokémon can be considerable, the ownership of these monsters is something that is clearly desirable, and NFTs can finally provide ultimate ownership. It is clear that VR and blockchain technology are a perfect pairing, but few projects seem able to exploit it. Why? The answer is simple: you need to gather people from two distinct areas of expertise, and the people who match this profile and have mastered these technologies are hard to find. But once these two highly innovative industries are merged, an opportunity arises to bring a new and genuinely innovative product to market.