2016 China s VR Marketing Trends Report. www. i r e s e arc h.com.cn

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1 2016 China s VR Marketing Trends Report www. i r e s e arc h.com.cn

2 VR For Consuming and Application in Various Industries The VR Application in Various Industries And Consumer VR VR Application in Various Industries Target B2B market and provide equipment for immersive VR interaction system and solutions for enterprises. VR industrial manufacturing VR medical service VR construction of real estate VR education VR training VR lab Application of Consumer VR Target B2C market and provide consumers with immersive VR equipment, content, system and services. VR tourism VR news VR social networking VR game VR video VR live streaming and rebroadcasting Source: iresearch. 2

3 Types of VR Output Devices Types of VR Output Devices Desktop VR Definition: A VR display device that uses computers, host and other equipment to run the system. Characteristics: It has the highest technology but it lacks portability. Products: Oculus Rift, HTC VIVE, PS VR, etc. Smartphone VR Definition: A display device that uses smartphones to run the system. Characteristics: It s most portable but its technology is relatively low. Products: Gear VR, Google Cardboard, Baofeng Mojing, etc. AIO VR Definition: An independent VR device which combines the content platform and display device. Characteristics: It has high technology and it s quite portable. Products: Deepoon AIO VR, Pico Neo AIO VR, etc. Note: The classification is based on products released by September

4 Domestic Capital Became Rational After Lots of Investment Activities Capital market started paying attention on VR sector from 2014 and investments soared in During the capital winter, investments in VR heated up. The hardware, input device, offline distribution, panoramic photography, content production, games, system support, etc. were the fields that attracted investment. Among them, the VR hardware received the most investments. The number of investments reached its peak in Q and the amount of investments exceeded 760 million Yuan. Over a year later, the capital market became rational. First, the capital market no longer focuses on hardware. Its layout has spread to other fields such as content and distribution. Second, premium investment decreased sharply. Investors attach more attention to the emerging companies. Third, currently, there are around 100 Chinese companies in VR sector, but only about 10 of them have raised Series B funding. The capital market now have deeper thinking about the business modes and profitability of the VR sector. Amount of Investments in China s VR Sector From Q to Q Stages of Investment in China s VR Sector From Q to Q Series A and before series A+ 71.1% 亿元 Series B and after series B (including being acquired) 28.9% Q Q Q Q Q Q Unit: Million Yuan Note: The data are calculated based on publicly available information on the internet. For details, please refer to the appendix. 4

5 Industry Chain of China s Consumer VR Photography equipment Content production Video making Industry Chain of China s Consumer VR in 2016 Distribution channels Online Input devices Support technology VR output devices Offline VR system and SDK Information on media Note: The companies are ranked in alphabetical order. 2 The map may not cover all the companies. If there s anything wrong with the classification, please feel free to contact 5

6 Diversity of The Content Might Increase Sharply by The End of The Year During the early period of VR s development, with their first mover advantage and strong appeal, some hardware producers, including Oculus, HTC and Sony, are in leading place in the development of the first generation of content platform. The production of content do not need great ability of expanding channels or huge influence on the industry. Startups and developers may find many opportunities in the field of content production. According to the survey of developers done by HTC Vive, over half of the interviewees say they plan to release AR/VR content in 3 months. By the end of 2016, a wave of VR content will be released. The Time That Developers Release New VR/AR Content 40.5% 66.1% of developers plan to release next VR/AR by the end of % 19.7% 8.1% 6.1% Within 1 个月内 1 month months 个月 months 个月 months 个月 Over 1 年以上 1 year Source: The data is based on the China VR/AR Developer Survey (Part 1) released by HTC Vive. Sample N=

7 Trends: The Content of VR Becomes Diversified According to the report released by HTC, currently, over 60% VR developers are game developers. But the content development of B2B vertical application, 360-degree panoramic video are under development. The content of VR in the fields of game, videos, etc. has started to be diversified. The development of game content is relatively more mature and covers most of the types. B2B vertical application are mainly in the education and real estate sector. 3)The main subjects of 360-degree panoramic video are tourism and arts & humanities. Distribution of Types of VR Content Production 360-degree video is a transition product Tourism: 55.8% Arts & humanities: 49.0% Education: 40.4% Extreme experience: 38.5% Science fiction: 28.9% Cartoon: 19.2% News: 13.5% Sport event: 10.6% Others: 15.4% 360-degree panoramic video 25.6% B2C application 22.4% Game 62.2% B2B vertical application 40.3% Game development covers a wide range of types Types: shooting, action, adventure, leisure, role play, simulation, strategy and others Application in education and real estate industries is mature Education 55.5% Real estate 50.5% Industrial design and manufacturing 42.7% Social network applications lead the VR B2C content production Social networking 44.0%; Life assistant 35.2%... Source: The data is based on China VR/AR Developer Survey (Part 1) released by HTC Vive. 7

8 VR is Mainly For Entertainment in The Short Term. It Will Become MR And be Mass Media in The Long Run Since the real world and the virtual environment are separated, VR devices can t be used very frequently or for a long time. Compare to cellphone, it is less portable and is not easy to use. Limited by technology, the user experience of VR, especially mobile VR, are not satisfying. In the future, VR will combine with augmented reality (AR) and become mix reality (MR). It will meet various demands of people in the form of wearable devices like glasses. It will surpass the coverage of cellphone and become a real mass media. However, it will take a very long time to achieve this target. VR Develops Towards MR And Will Become Mass Media Entertainment Subsidiary Complementary Media Mass Media Communication and social networking Mass media Tourism News Video and live streaming VR+AR realize MR Game Development path of VR Development path of AR Development path of MR Become common Next 1-2 years Next 3-5 years Next 5-10 years Source: iresearch 8

9 Company Introduction / Legal Notice About iresearch iresearch is a provider of insights into China s internet space and global fastest-growing sectors as well as value-added corporate services. It offers a wide range of services including big data insights and forecasts, industry research and corporate consulting, investment and post-investment services. Founded in 2002, iresearch is the first third-party firm focusing on research in China s internet sector. Since its inception, it has published thousands of industry reports and provided custom research and consulting services to thousands of clients. It is now the preferred third-party research brand for the IPO of Chinese internet companies. iresearch set up its global research center in 2015, expanding the scope of research to fast-growing sectors world-wide. Copyright Notice The report is produced by iresearch Co., Ltd. All texts, figures and tables in this report are under the copyright protection of relative laws and regulations on intellectual property rights in the Peoples Republic of China. No organization or individual is allowed to use the information in this report for any business purpose without the written consent from iresearch. Some texts and data in this report are collected from public information and their copyrights are held by the original authors. No organization or individual is allowed to use the information in this report for any business purpose without written consent from original authors and iresearch. Exception Clause Industry data and market forecasts are mainly obtained through desk research, industry interviews, market survey, and other research methods in accordance with iresearch s statistical forecast model. Corporate data are mainly obtained through interviews and are for reference only. Some data published in this report is based on sampling method and is therefore influenced by sample structure. Due to the limitation of research method, sample size and scope of data collection, the report only serves as a reference for customers who purchase the report. iresearch is not held liable for the data and views in the report. Contact Us Hotline Website Follow on Twitter and LinkedIn 9

10 Table of Content of Full Report 1 General Description of The VR Sector And Its Future 1.1 The Definition of VR 1.2 Application of Consumer VR And Industry VR 1.3 Development of Consumer VR 1.4 Types of VR Output Devices 1.5 Global Tech Giants Layout of VR 1.6 Famous Chinese Companies Activities in VR Sector 1.7 Domestic Capital Became Rational After Lots of Investment Activities 1.8 Industrial Chain of China s Consumer VR 1.9 Output Device Production Companies in VR Industrial Chain Deepoon VR 1.10 Output Device Production Companies in VR Industrial Chain Whaley VR 1.11 Content Distribution Companies in VR Industrial Chain iqiyi VR 1.12 Content Production Companies in VR Industrial Chain Letin VR 1.13 VR Has a Bright Future And a Long Way to go 1.14 The Diversity of The Content Might Increase Sharply by The End of The Year 2 Whether VR Will be a New Communication Media 2.1 VR is Said to be The Next Computing Platform 2.2 Principal Line of Development of Mass Media 2.3 VR Might Become Popular in Vertical Fields in The Early Stage 2.4 Trends: The Content of VR Becomes Diversified 2.5 VR is Mainly For Entertainment in The Short Term And Will Become MR And Will Become Mass Media in The Long Run. 10

11 Table of Content of Full Report 3 VR Brings New Method For Marketing 3.1 Virtual Drive of Volvo XC90: App + Google Cardboard 3.2 VR News of New York Times: Paid Subscription + Free Google Cardboard 3.3 Propaganda of Game of Thrones: VR Video 3.4 Branding of MacDonald: Personalized VR 3.5 Letin: My VR Boyfriend/Girlfriend 3.6 Deepoon VR: "Catch The Dream" Public Service Activity 4 Large Scale Marketing in The Future 4.1 Forecast of China s VR Marketing Trends 4.2 The First Stage: Spreading Relies on Traditional Channels 4.3 The Second Stage: Hardware Producers Will Get a Slice of The Cake 4.4 The Third Stage: Ad Platform Comes Into Being 11

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