Virtual Reality - UK - December 2017

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Revenues growing rapidly despite declining average prices
Figure 1: Virtual reality market, 2016 and 2017
Launch activity and innovation
Facebook looks to take VR mainstream with standalone headset
Free-roaming VR set to launch in the UK
IMAX opens dedicated VR centre in Manchester
The consumer
Over three quarters of people have never used VR
Figure 2: Recent VR Headset use, October 2017
Popularity of home use offers opportunities for headset sales
Figure 3: Location of VR headset use, October 2017
Two thirds of Millennials interested in VR films
Figure 4: Interest in VR activities, October 2017
The majority of people are interested in a range of VR applications
Figure 5: Repertoire of interest in VR activities, October 2017
Interest in VR is strong given the lack of advertising spend
Figure 6: VR headset purchase plans, October 2017
Cultural experiences could benefit from VR offerings
Figure 7: Attitudes towards VR, October 2017
What we think
ISSUES AND INSIGHTS
Awareness and direct experience are the priority for VR
The facts
The implications
High prices have limited take-up, particularly among Millennials
The facts
The implications
VR experiences outside the home are key to market growth
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Revenues growing rapidly despite declining average prices
Processing power innovations driving VR quality
Price cuts to headsets and big sale events driving demand
VR advertising spend growth will boost consumer awareness
Free content boosting interest in VR
Football set to drive interest in VR
MARKET SIZE
Growing competition in the VR market
Revenues growing rapidly despite declining average prices
Figure 8: Estimated value and volume sales of virtual reality headsets, 2016 and 2017
Figure 9: Virtual reality market, 2016 and 2017
MARKET DRIVERS
Processing power innovations driving VR quality
Sony pushes VR content at Paris Games Week
Figure 10: Sony’s PlayStation VR ‘Starter Pack’
Price cuts to headsets and big sale events driving demand
Free headsets to drive smartphone sales
Football set to drive interest in VR
Free content boosting interest in VR
VR advertising spend growth will boost consumer awareness
Immersive nature of VR offers new opportunities for advertisers
LAUNCH ACTIVITY AND INNOVATION – WHAT YOU NEED TO KNOW
Facebook looks to take VR mainstream with standalone headset
Free-roaming VR set to launch in the UK
Google launches Daydream View 2
IMAX opens dedicated VR centre in Manchester
LAUNCH ACTIVITY AND INNOVATION
Facebook looks to take VR mainstream with standalone headset …
Figure 11: Oculus Go headset, scheduled for release in early 2018
… with an HTC launch also imminent
Google launches Daydream View 2
Figure 12: Google’s Daydream View 2 headset
Free-roaming VR set to launch in the UK
Figure 13: Ghostbusters Dimension ‘Hyper Reality’ experience
Logitech working on VR keyboards
Figure 14: Logitech’s ‘Bridge’ keyboard for VR
IMAX opens dedicated VR centre in Manchester
Figure 15: ODEON’S IMAX VR centre in Manchester
THE CONSUMER – WHAT YOU NEED TO KNOW
Over three quarters of people have never used VR
Men are twice as likely to own a VR headset
Popularity of home use offers opportunities for headset sales
Intention to buy is strong given the lack of advertising
Two thirds of Millennials are interested in VR films
Gaming will remain a key factor in VR expansion
Large proportion are interested in a VR arcade
Falling prices will present strong opportunities among Millennials
VR HEADSET USAGE
Men are twice as likely to own a VR headset
Over three quarters of people have never used VR …
Figure 16: Recent VR Headset use, October 2017
… rising to 82% of women who have never used VR
Parents and Millennials the most likely VR users
Figure 17: Recent VR use, by demographics, October 2017
LOCATION OF VR USE
Popularity of home use offers opportunities for headset sales
Men twice as likely to use VR cinema and theatre
Presence of children more likely to make people seek out VR
Figure 18: Location of VR headset use, October 2017
A third of Millennials have used VR in two or more locations
Figure 19: Repertoire of VR headset use locations, October 2017
USES OF VR
Two thirds of Millennials interested in VR films
Gaming will remain a key factor in VR expansion
Figure 20: Interest in VR activities, October 2017
Interest in VR live sport may be short-lived
A quarter of people are interested in using social media VR
Figure 21: Interest in VR activities, by selected demographics, October 2017
Shopping could be a big VR market for Millennials
VR and 360-degree video a natural progression for holiday market
Figure 22: People ‘very interested’ in VR activities – all respondents and Millennials, October 2017
The majority of people are interested in a range of VR applications
Figure 23: Repertoire of interest in VR activities, October 2017
INTENT TO BUY
Interest in VR is strong …
… but increasing intent to buy will require more direct experience
Figure 24: VR headset purchase plans, October 2017
Men twice as likely to buy VR headsets in the next year
Technologically engaged Millennials most likely to be early adopters
Parents are showing a strong intent to buy
Figure 25: VR headset purchase plans, by selected demographics, October 2017
Most VR customers intend to buy high-end headsets
Figure 26: VR headset purchase plans, by brand, October 2017
ATTITUDES TOWARDS VR
Cultural experiences could benefit from VR offerings
Most VR users do not find the experience isolating
Four in 10 interested in VR arcades
Figure 27: Attitudes towards VR, October 2017
Over half of people have been put off by high prices
Product awareness is a key issue
Second-generation and standalone headsets could boost take-up
Launches from key games franchises will boost interest in VR
Figure 28: Attitudes towards VR of those not owning headsets, October 2017
CHAID ANALYSIS – ATTITUDES TOWARDS VIRTUAL REALITY
Methodology
VR headset price premiums are putting off young Millennials
Figure 29: Target groups based on attitudes towards VR headsets – CHAID – Tree output, October 2017
Figure 30: Target groups based on attitudes towards VR headsets– CHAID – Table output, October 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology