Original title: VR vs. DVD: Will a similar track be successful?
About 100 years ago, the lighting switch was born in a suburb of Lynbrook, New York. If this fact is still not enough to show you the horrors of technological development, here is another example: 100 years ago, the first supermarket officially opened in Memphis, Tennessee.
When you work in a new industry such as VR, these facts can not help but get you into thinking. Although you believe you can make a difference in other industries, the technology industry is more complicated. The pace of development of technology is so fast that it is difficult for you to judge whether a new technology gadget is just a temporary hype, or whether it can contribute to society. Nike shoes that can automatically tie shoelaces are cool, but it's hard to say whether this can have a meaningful impact on us like a polio vaccine.
VR is a different technology. For me, this is not a short-lived hype, but a truly positive future. One day, we will often consume media through heads-up, just like watching TV. I firmly believe in six days a week. But on the seventh day, I began to think about whether the industry would invest billions of dollars in the now-popular fingertip gyro (a small toy with a symmetrical structure that can spin on the fingers). I began to worry about the enduring power of VR technology, but I then reminded myself of the similarities between VR and a DVD player just over 20 years old. As I said before, the pace of technological development is very scary.
DVD player
The DVD player is a rare and truly international product of cooperation. From Jefferies to Time Warner, a total of 10 companies have jointly created the DVD Forum. The only goal is to bring this technology to the consumer market. Time Warner's participation is critical, and their influence is to shape this technology into a perfect medium for the entertainment industry. A single DVD can store 95-minute clips (which can support 90% of the movie), while the retail price is less than $20. In 1997, the first DVD player was officially launched in the US market.
Maybe you remember when buying your first DVD player. The feeling of being able to play "The Silver Wings Killer" at home in my friends must be very exciting. However, DVD players did not immediately succeed in the early stages. I can imagine that industry giants are scratching their heads and wondering why consumers do not buy their players. They say "this is the future" to consumers and then they may think "but this is not a vaccine against polio." When faced with sales figures for the first year, I can imagine their minds drawing these ideas. With a price of $700 or more, DVD players sold only 349,000 units in the first year.
Although the development of DVD players has been relatively slow, this product soon became successful after entering the millennium. In 2002, the market sold a total of 1.76 million players, an increase of 30% over the previous year. This success led some industry executives to start worrying that consumer interest will soon fade. In order to explain some of the reasons for the sudden rise of DVD players, I will now discuss another technology product at the time, the Sony PS2.
The PS2 was released in October 2000 at a price of $299 (about US$400 today). Sony has no shortage of other competitors in the home console market, such as Sega, followed by Nintendo and Microsoft, but the place where PS2 stands out is its built-in DVD player. At the time, the average price of a DVD player was $201, while consumers would only need to pay an additional $100 to get a PS2 game console and a DVD player. This seems like a good deal, isn't it? The facts are obviously too. In 2002, the PS2 occupies 32% of the US DVD player's share. This is just a conservative figure. Some market analysts believe that the PS2 may occupy 47% of the market, which means that the United States sells 44 million DVD players each, of which 21 million come from Sony. From the launch to the achievement of this achievement, the PS2 took only two years. This is very eye-catching, but it is also very scary.
People's hindsight is always a perfect score. Is Sony's PS2 causing the DVD player to become a breakthrough technology boom? Obviously not. Psychologists tell us that relevance does not mean causation. To be sure, the PS2 has accelerated the development of DVD players in the United States. Since 2002, 73% of U.S. households have expressed strong interest in buying DVD players, of which 43% said they want to buy a related product next year.
2. VR
Working in a small VR company can be a bit stressful. With the rapid development of technology, 10 start-up companies have inevitably failed. This is not a comforting fact, but we can learn from the success of DVD players. Although it is difficult to obtain real data, in terms of sales in the first year, market analysts report that VR headshots have far exceeded DVD players. In 2016, high-end headlines and low-end headlines are expected to sell a total of 6.5 million units. There is no doubt that VR started relatively quickly, 18 times more data than the DVD player in the first year. However, the current penetration rate and market penetration of VR have not reached the speed of DVD players in the early part of the millennium. So, just like the CEOs of the DVD Forum, I need to focus on consumer confidence and hope that this translates into real sales data. Because consumers are very positive about VR.
Touchstone Research's report on the development of the VR market in 2016 pointed out that 79% of consumers surveyed said they would actively search for VR experience. Of respondents who have already experienced VR, 81% have already recommended this technology to their friends. The key point is that almost all age groups express the same tendency, which is a good sign. This is especially true of the post-war baby boom generation. The data shows that 64% of post-war baby boomers are optimistic about VR, and more than 50% of respondents hope to try this technology. The most encouraging figure is that 85% of influencers (having a broad network of friends and are considered leaders of opinion) said they will buy a heads-up display. Obviously, there has been early interest in the market, so I believe that the widespread adoption of VR is only a matter of time.
The VR headline sales data is very interesting, because virtual reality has never appeared centralized and unified marketing with DVD players. This is partly because the technology is not a format but a medium. This is a new way of experiencing entertainment. To a large extent, this is because VR has been exploring for the past 20 years, and it has only been formed and developed until now. The first VR device name was born in the 1960s and is called "The Sword of Damocles." This device was invented by MIT graduate student Ivan Sutherland (later known as Father of Computer Graphics and Father of Virtual Reality). In 1991, Sega developed the Sega VR head display, and Nintendo introduced Virtual Boy in 1995. Of course, this part of the product will not last long.
Twenty years later, modern heads are beginning to take shape. Both Oculus and HTC launched the Rift and Vive headlines in 2016 respectively. At the same time, technology giants such as Samsung and Google have launched low-end mobile head displays, allowing users to step into the world of VR with the help of smartphones. If we say that the 1990s belonged to the Caveman era, then we are only just beginning to learn to have a fire.
If you look at the data, you may come to an interesting conclusion. In 2016, it is expected that the high-end headline will have sold a total of 1.5 million units, while the low-end head will display 5 million units. Early hype about VR is all about high-end headlines, but low-end solutions seem to be the real winners. Both heads can support 360-degree video, but the quality is very different, only the high-end heads can run a real game experience. Early hype about VR is all about high-end headlines, but low-end solutions seem to be the real winners.
game
With the arrival of Sony's psvr, there have been interesting changes in the data. Although it was only available for two months on the market, this head of sales had already accounted for half of the high-end market in 2016. Just like the relationship between DVD players and PS2 sales, this data shows that high-end head display will achieve real market share in the coming year. Considering that Microsoft will launch its own VR solution in the second half of this year, this possibility is getting bigger and bigger.
Another point we need to consider is spending. The cost of Oculus and HTC is 7-8 times higher than other competitors, and they account for the majority of total VR investment spending. There is no doubt that Rift and Vive users who have already spent nearly $1,000 on the display will pay for customized VR content. Although 360-degree smartphone videos have profit margins, sources are not yet consumers, but rather brand owners and advertisers who want to attract new consumers. Where are VR consumers investing their money? The answer is a customized, high-end experience, such as the $60 Rick and Morty VR experience. Games are not only the key to technology, but also an important destination for consumer spending.
In this particular case, the dominance of the game in VR seems very reasonable. From the world’s first console game “Pong†45 years ago, living in virtual reality is just a new height of escapism. Compared with other industries, games can more easily use this technology, and the increasingly diverse player community will ensure that VR can reach more consumers. Although the headline price is currently very high, it is believed that it will soon be able to fall to the user's acceptable range, and this will only further accelerate the popularity. In the end, as the cost of the ever-present technology continues to drop and the technology continues to evolve, millions of households will be able to use VR in the future.
3. It is not just temporary speculation
Although the investment boom that has occurred in 2016 has faded, the total investment is still growing. Opponents may compare VR to 3D TV or other short-lived technology products. However, they ignore the lessons that history has brought us. If the function of the DVD player taught us anything, then we know that VR will continue to develop.
Editor:
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