2017 Virtual Reality Year In Review
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1 2017 Virtual Reality Year In Review Lewis Ward (IDC) and Unity March, 2018 IDC
2 Executive Summary 3 Methodology and Objectives 4 Key Analysis and Findings 5 Contact Information 22 IDC 2
3 Executive Summary Worldwide direct consumer spending on prepaid virtual reality (VR) apps and games totaled $417 million in 2017, and is on track to top $1 billion for the first time this year Comparing 4Q 2016 and 4Q 2017 results globally, the number of unique VR apps/games rose >2x, total hours of use were up >3x, and app/game downloads or sales increased 5x Samsung s Gear VR placed first in installed base (IB; Gear VR represented 36% of the total VR hardware IB of 13.3M consumer devices in use at the end of 2017) and in VR app/game sales or downloads (Gear VR represented 54% of the nearly 28M VR apps/games sold or downloaded last year); video apps were especially popular Gear VR and Google Daydream Facebook s Oculus Rift placed first in terms of average usage time per device in 2017; HTC s Vive won in overall VR library/catalog size, with nearly 2,000 VR apps/games available at the end of 2017; Sony s PlayStation VR led the pack in hours of use (43% of the nearly 60M hours of global VR use) and in direct prepaid consumer game/app spending (51%) The U.S. was the leading VR market last year, with 28% of the global IB as of year-end 2017 (and of VR apps/games Made With Unity, U.S. sales or downloads were 36% of the global total); Americans also disproportionately owned Vive, Rift or PlayStation VR headsets VR hours of use trended away from the U.S. in 2017 as usage in other markets surged IDC 3
4 Methodology and Objectives This presentation is based on data from Unity Analytics and IDC Reports and Trackers from 4Q 2016 through 4Q 2017 Methodology summary Data was pulled from Unity Analytics to establish several baseline metrics for the major VR platforms IDC leveraged data from the Worldwide AR/VR Headset Tracker and related IDC reports and surveys, public filings and statements by various industry leaders, a review of relevant storefronts, and SteamSpy in order to expand coverage to the total market The data and methodologies were complimentary, allowing Unity and IDC to produce a fairly comprehensive review of consumer VR market dynamics, with a particular emphasis on software performance by major platform last year; more methodological detail is available upon request Objectives summary This report s focus is a review of U.S. and worldwide consumer-facing VR hardware and off-the-shelf app/game software dynamics in 2017, and a comparison of 4Q 2016 and 4Q 2017 results Enterprise- and business-oriented spending is excluded throughout to the extent possible IDC 4
5 Key Analysis and Findings VR By The Numbers, 2017 IDC 5
6 Worldwide Virtual Reality Hardware Installed Base By Major Platform, Year-End 2017 Millions of consumer VR devices in use The VR device installed base rose 82% last year; the comparable year-end 16 figure was 7.2M Totals exclude business/enterprise sales as well as nonelectronic viewing accessories (Google Cardboard as well as cloth, plastic or foam smartphone holders from a range of manufacturers) Gear VR ended 2017 with the largest installed base (>4.7M devices in use, 36% of the global total) Source: IDC s Worldwide AR/VR Headset Tracker IDC 6
7 VR Hardware Installed Base, U.S. and Rest of World (RoW), Year-End M Worldwide Millions of consumer VR devices in use The U.S. was the #1 VR market, with 28% of the global installed base at the end of last year Americans disproportionately owned tethered head-mounted displays (HMDs like Vive, Oculus Rift and PS VR) rather than screenless viewers (i.e., Gear VR, Daydream) relative to RoW Source: IDC s Worldwide AR/VR Headset Tracker IDC 7
8 Worldwide Total Unique VR Apps/Games By Major Platform, 4Q 2016 To 4Q 2017 Unique VR apps and games All major platforms at least doubled their app/game catalogs last year, some rose >6X There were >3,250 total unique VR apps/games available in 4Q 2017, with Vive (Steam and Viveport) in front Source: IDC and Unity IDC 8
9 Worldwide Unique VR Apps/Games Made With Unity (MWU) By Major Platform, 4Q 2016 To 4Q 2017 Unique VR apps and games Across all platforms, there were >2,800 unique apps/games MWU at the end of last year Over two-thirds of all unique VR apps/games available worldwide were MWU as of 4Q 2017 PlayStation VR isn t tracked in Unity Analytics; it was replaced here with Cardboard Source: Unity IDC 9
10 Worldwide Total VR App/Game Sales Or Downloads By Major Platform, 2017 Millions of sales/downloads Gear VR led with a 54% share of worldwide app/game sales or downloads (27.9M) Sales and downloads across all platforms totaled 51.7M last year Compared to 4Q 2016, 4Q 2017 s sales and download total was up 5X Source: IDC and Unity IDC 10
11 U.S. VR Apps/Games MWU, Sales Or Download Share By Major Platform, 2017 Share of VR app/game sales or downloads The U.S. generated 36% of worldwide MWU VR app/game sales or downloads (17.8M) last year Compared to 4Q 2016, 4Q 2017 sales/downloads were up >4X in the U.S. Source: Unity IDC 11
12 Worldwide VR Apps/Games MWU, Top 10 By Sales Or Downloads, 2H 2017 App category or genre Installs (000) Free/F2P or Prepaid Live social or multiplayer interaction Amount of in-app motion Mobile or PC/console 1. Video 1,047 Free/F2P Low/Comfortable Mobile 2. Video 457 Free/F2P Low/Comfortable Both 3. Game Adventure 452 Free/F2P Medium/Moderate Mobile 4. Game Action 350 Free/F2P High/Intense Mobile 5. Game Action 314 Free/F2P High/Intense Mobile 6. Game Adventure 313 Free/F2P Low/Comfortable Mobile 7. Music or Audio 228 Free/F2P Low/Comfortable Mobile 8. Entertainment 227 Free/F2P Low/Comfortable Mobile 9. Entertainment 217 Free/F2P Low/Comfortable Mobile 10. Game Adventure 191 Free/F2P Low/Comfortable Mobile Source: Unity IDC 12
13 Worldwide Hours Of VR App/Game Use By Major Platform, 2017 Millions of hours of use PlayStation VR led the pack with a 43% share (25.7M hours) of total hours of use last year Global use across all platforms came to 59.4M hours Compared to 4Q 2016, 4Q 2017 s total hours of use rose >3x Source: IDC and Unity IDC 13
14 Worldwide VR Apps/Games MWU, Top 10 By Hours of Use, 2H 2017 App category or genre Hours of Use (000) Free/F2P or Prepaid Live social or multiplayer interaction Amount of in-app motion Mobile or PC/console 1. Video 663 Free/F2P Low/Comfortable Mobile 2. Game Action 429 Free/F2P High/Intense PC/console 3. Game Mixed 373 Free/F2P High/Intense PC/console 4. Simulation 315 Free/F2P Medium/Moderate PC/console 5. Game Action 237 Prepaid High/Intense PC/console 6. Game Action 235 Prepaid High/Intense PC/console 7. Simulation 231 Prepaid High/Intense PC/console 8. Game Action 220 Prepaid High/Intense PC/console 9. Game Action 195 Prepaid High/Intense PC/console 10. Game Action 169 Prepaid High/Intense PC/console Source: Unity IDC 14
15 Worldwide Indexed Daily Time Spent Using VR Apps/Games MWU By Major Platform, 2017 Indexed daily use per device Results reflect average daily use per VR device, indexed in 2017 Oculus Rift users were the most active from this perspective While Rift and Vive users typically spent about twice as much time per day in a headset compared to mobile VR users late last year, this gap closed significantly over the course of 2017 Source: Unity IDC 15
16 U.S. Share of Worldwide Hours Of Use, VR Apps/Games MWU By Major Platform, 4Q 2016 To 4Q 2017 U.S. share of worldwide hours of use U.S. hours of use for VR apps/games MWU totaled 3.7M in 2017 (34% of the global total of 10.9M) VR usage rose significantly out of the U.S. in 2017; over 58% of global hours of use in Q came from RoW, up from about half the total in 1Q 2017 Total U.S. hours of use also increased >3.5X in 4Q 2017 compared to 4Q 2016 Source: Unity IDC 16
17 Worldwide Consumer Spending On Prepaid VR Apps/Games By Major Platform, 2017 Share of prepaid app/game spending PlayStation VR dominated the market from this vantage point last year, with just over half ($214M) of all prepaid app/game spending This spending total excludes in-app purchases/dlc and ad-based revenue, and is limited to revenue derived from apps/games that ran on VR devices Source: IDC IDC 17
18 Worldwide Top 5 Grossing Prepaid Steam VR Games, 2H 2017 Title Launch quarter (VR) Developer/Publisher Live social or multiplayer interaction Amount of in-app motion List price ($) 1. Fallout 4 VR 4Q17 Bethesda High/Intense Arizona Sunshine 4Q16 Jaywalkers Interactive/ Vertigo Games High/Intense SUPERHOT VR 2Q17 SUPERHOT Team High/Intense GORN 3Q17 Free Lives/Devolver Digital High/Intense Tabletop Simulator 2Q16 Berserk Games Medium/Moderate 20 These five titles collectively grossed >$6.5M in 2H 2017 on Steam Similar to the top 10 hours of use list for apps/games MWU, it isn t the case that titles with a lot of in-app motion weren t popular; live (local or online) multiplayer features also resonated Source: IDC interpretation of SteamSpy data IDC 18
19 Worldwide Top 5 Grossing Prepaid PlayStation VR Games, 2017 Title Launch quarter (VR) Developer/Publisher Live social or multiplayer interaction Amount of in-app motion List price ($) 1. The Elder Scrolls V: Skyrim VR 4Q17 Bethesda High/Intense SUPERHOT VR 3Q17 SUPERHOT Team High/Intense PlayStation VR Worlds 4Q16 London Studio/SIEA High/Intense Job Simulator 4Q16 Owlchemy Labs Medium/Moderate Batman: Arkham VR 4Q16 Rocksteady Studios/ WBIE Medium/Moderate 20 These five titles collectively grossed >$70M in 2017; lack of multiplayer wasn t an issue Bethesda Softworks and SUPERHOT Team outperformed in VR last year from this perspective, and their high game ASPs don t appear to have been an stumbling block Source: IDC interpretation of PlayStation Store data IDC 19
20 Noteworthy Market Challenges Many VR device owners don t use their headsets frequently, or for long periods of time when they do use them In 4Q17, for example, approximately one-third of all VR devices sold to consumers to date worldwide weren t used at all VR app developers, publishers and service providers need to do a better job convincing users to put on their headsets on a regular basis Building up the monthly active user (MAU) base through more frequent content updates and so on would go a long way towards cementing VR s position as a viable market The average time spent per VR app/game downloaded in 2017 came to an hour and ten minutes globally (across all VR platforms, often spread out across multiple sessions), which is hardly evidence of heavy, repeat use Given that six of the top ten VR apps/games MWU in terms of total hours of use were games with live multiplayer features in 2H 2017, it follows that this will be an important element of pushing up session numbers and session lengths moving forward Source: IDC and Unity IDC 20
21 Key Opportunities In 2018 Despite experiencing growing pains, the consumer VR market grew significantly in 2017, and will grow again this year IDC forecasts that there will be >21 million consumer VR devices in regular use worldwide by the end of 2018 (excluding Cardboard and similar viewing accessories), a 60% increase over year-end 2017 Spending on off-the-shelf VR apps/games is on track to top $1 billion for the first time in 2018, and if the MAU base and average hours of use per app rise apace this year, total consumer spending should be well over $1 billion The Viveport Subscription plan warrants particular attention as it showed significant momentum heading into 2018 VR app/game developers and publishers must adjust, keep innovating, and stay focused on fundamental customer needs Emphasize social and live multiplayer features when practical (including cross-platform) It s okay to target high ASPs if you re delivering a quality experience and a known IP Don t shy away from a lot on in-app motion many popular games have this Source: IDC and Unity IDC 21
22 Questions? Lewis Ward IDC Research Director, Gaming and VR/AR Leon Chen Product Marketing Manager, Unity Technologies For media inquiries, please contact ToC IDC 22
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