Australian VR headset market facing 'chicken and egg' scenario

Australian's are snapping up virtual reality headsets, with more than 200,000 units sold locally in 2016 – but the market is being impacted by the wide range of offerings and lack of killer VR content and applications.

Telsyte figures show 216,000 units were sold in calendare 2016, with the emerging technology analyst firm forecasting VR penetration to reach 25.5% of households by 2021, based on attachment rates of headsets to VR capable smartphones, games consoles and high end gaming PCs.

However, the company says many production hourses are waiting for broader adoption and a clear winner to emerge before they make large scale investments in creating content – soemthing Telsyte says will be a key driver for adoption.

Foad Fadaghi, Telsyte managing director, says: "We are entering a chicken and egg scenario with VR adoption.

"Developers are looking for a growing base of users before making large investments, at the same time mainstream technology buyers are waiting for killer VR content or applications," he says.

Telsyte says support by content producers, in particular the AAA games titles and franchises will be a key driver for adoption.

The company says the wide range of VR products available is also impacting both consumer and developer uptake.

"Telsyte believes that the choice of three main platforms – mobile, console, PC – and four main ecosystem – Oculus, PlayStation VR, HTC Vive/Stream VR, Google Daydream – is impacting consumer purchase decisions," Telstye says.

"This will be further exasperated with more options in H2 2017.

The Telsyte Australian VR and AR Market Study 2017 shows mobile VR took around 70% of units sold in 2016. Nearly half of all device revenues were generated by the Sony PlayStation VR, which Telsyte says is experiencing strong initial demand from video gamers.

Almost half of consumers surveyed by Telsyte who were looking to purchase a VR headset were interested in using it for games, movies or entertainment purposes.

The research also shows early adopters are using VR as 'a distraction from reality'. Nearly half indicated 'they enjoy playing online games with friends'; 58% said they 'often feel stressed' and 49% said they have 'very little free time' – 24%, 18% and 11% higher than the average Australian, respectively.

Telsyte says VR hardware needs to become less visible, lighter and untethered, while software and content developers need to harness the technology better with less 'demo' orientated releases, in order to ahelp the market grow.