The VR and AR market
XR Technologies will have a material impact on the economy over the next 5 years
With the first iteration of VR/AR devices hitting the market in early 2016 consumers will be introduced to the concept of VR/AR. Analysts and the investment landscape agree that this will trigger a rapidly growing appetite for unique VR and AR driven experiences. The applications for the technologies that drive AR and VR experiences are endless, from Video Games & Entertainment to live events, retail, real estate, education, healthcare and egineering. It is therefore no surprise that Goldman Sachs compare VR and AR devices to the advent of smart phones, estimating the industry to grow from 120 MUSD in 2014 to 7 BUSD in value in 2020.
Goldman Sachs estimates that there will be 96 Million VR and AR users by 2020 based on comparing the rise of VR (and AR) hardware against the rise of devices such as smartphones, notebooks and tablets.
As the industry focusses on investments and acquisitions around hardware, XR_ROOM sets its sight on the massively growing market of consumers requiring content on this new ecosystem. With a start in 2016 and run-time of 5 years we take full advantage of the value increase of this market during that timeframe.
3.5 Bn USD of financial backing for VR and AR ventures globally. This is against a market which is estimated to generate 2.3 Bn USD in hardware revenue by 2018 against 4.2 Bn USD in revenue from experiences (content and services enabling content). An additional 0.5 Bn USD in revenue is expected by 2018 coming from distribution of this content (Goldman Sachs, 2016).
Patent applications are nascent but growing rapidly, There were 2,526 patents or patent applications in 2014, up from 563 in 2010 (Lexnova, 2015). LexInnova’s analysis also shows that virtual reality patents are focused on narrow fields of application which in this early stage of the industry where consumer demand needs to materialize increases the risk that a patent becomes redundant. From a geographical perspective the United States has most patent filings in the domain of VR. South Korea and China are following second. UK and Germany are dominating the filing numbers in Europe.
In many ways VR and AR content creates new challenges for the content industry to solve, specifically in games, music and video this will give rise to increased demand for expertise and solutions. Therefore we have seen a rapid rise in the number of companies in VR and AR and will see this grow from 180 in 2015 to 790 in 2020, creating over 60.000 jobs in the US alone in the next 3 years.