Virtual Reality: Inc Impact of COVID-19 - UK - January 2021

OVERVIEW
What you need to know
Key issues covered in this Report
COVID-19: market context
Impact of the January lockdown and the vaccination rollout
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Impact of COVID-19 on virtual reality
Figure 1: Short-, medium- and long-term impact of COVID-19 on virtual reality, 15 December 2020
The market
Higher average price of a headset keeps market growing despite lower shipments
Figure 2: Market size for virtual reality, 2016-20
Fewer mid-range headsets available to consumers
Virtual work meetings could give people first experience of VR
Companies and brands
HTC announces new products for Cosmos range
XRSpace launches Manova headset with social VR platform
Oculus announces Quest 2 at cheaper price than the original
The consumer
Two in ten headset owners use VR daily
Figure 3: Frequency of usage for VR headsets, September 2020
Converting interest into purchasing is the biggest challenge for VR
Figure 4: Previous usage and interest in VR headsets, September 2020
Weight and graphics of VR headsets are currently problems for consumers
Figure 5: Previous VR users’ attitudes towards VR, September 2020
Ownership of Oculus Quest already matches Rift
Figure 6: Type of VR headset owned, September 2020
Significant growth in using VR headsets to watch films
Figure 7: Activities performed on a VR headset, September 2019 - September 2020
Four in ten VR owners have used the device more since COVID-19
Figure 8: Changes in usage of VR headset since COVID-19, September 2020
Balance between battery life and performance is key for VR headsets
Figure 9: Most important factors when purchasing a VR headset, September 2020
Retailers can appeal to Older Millennials with demos of VR concerts
Figure 10: Attitudes towards trialling and buying VR headsets since COVID-19, September 2020
ISSUES AND INSIGHTS
How COVID-19 is shaping the virtual reality market
Watching films with VR headsets
Using VR concert demos in-store to engage Older Millennials
THE MARKET – KEY TAKEAWAYS
VR market grows in value despite drop in shipments for 2020
Decreasing number of mid-range headsets makes attracting new buyers difficult
MARKET SIZE
Impact of COVID-19 on virtual reality
Figure 11: Short-, medium- and long-term impact of COVID-19 on virtual reality, 15 December 2020
Higher average price of a headset keeps market growing despite lower shipments
Figure 12: Market size for virtual reality, 2016-20
Figure 13: Volume, average price and value of virtual reality market, 2016-20
Figure 14: Market forecast for virtual reality, 2016-26
MARKET DRIVERS
Fewer mid-range headsets available to consumers
Discontinued VR headsets
Impact on the growth of the market
Companies also reducing focus on tethered headsets
Virtual work meetings could give people first experience of VR
MeetinVR
Spatial
Advantages of these platforms
Consumers could get first experience of VR through these use cases
Apple entering mixed reality market, but pricing expected to be an issue
Impact on the VR market
COMPANIES AND BRANDS – KEY TAKEAWAYS
Social VR could come into greater focus due to COVID-19
Oculus develops Quest series whilst decreasing price
LAUNCH ACTIVITY AND INNOVATION
HTC announces new products for Cosmos range
Cosmos Elite
Cosmos XR
Cosmos Play
XRSpace launches Manova headset with social VR platform
Impact of social VR platforms
Oculus announces Quest 2 at cheaper price than the original
HP Reverb G2 adds cameras and improves audio quality
THE CONSUMER – KEY TAKEAWAYS
Stable ownership of VR headsets continues
Older Millennials could buy headsets after concert demos in-store
Oculus Quest series in a strong position to gain market share on PSVR
Major streaming platforms should offer interactive VR films or TV
IMPACT OF COVID-19 ON CONSUMER BEHAVIOUR
Four in ten VR owners have used the device more since COVID-19
Figure 15: Changes in usage of VR headset since COVID-19, September 2020
Retailers can appeal to Older Millennials with demos of VR concerts
Figure 16: Attitudes towards trialling and buying VR headsets since COVID-19, September 2020
VR HEADSET OWNERSHIP, USAGE AND BARRIERS TO USE
Two in ten VR owners use it daily
Figure 17: Ownership of VR headsets, September 2018 - September 2020
Figure 18: Frequency of usage for VR headsets, September 2020
Converting interest into purchasing is the biggest challenge for VR
Older Millennials most likely to be interested in VR after previous usage
Figure 19: Previous usage and interest in VR headsets, September 2020
Weight and graphics of VR headsets are currently problems for consumers
Figure 20: Previous VR users’ attitudes towards VR, September 2020
TYPE OF VR HEADSET OWNED
PSVR successor still a long way off, meaning opportunities exist for rivals
Ownership of Oculus Quest already matches Rift
Figure 21: Type of VR headset owned, September 2020
APPS USED ON VR HEADSET
Significant growth in using VR headsets to watch films
Opportunity for major streaming platforms to offer interactive VR content
Mindfulness and VR
Figure 22: Activities performed on a VR headset, September 2019 - September 2020
FACTORS IN VR PURCHASE DECISIONS
Balance between battery life and performance is key for VR headsets
Impact of consumer priorities on the market
Figure 23: Most important factors when purchasing a VR headset, September 2020
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology