Spring is coming, and this time the protagonist is the VR market.
According to Sina VR on March 30, international data analysis company IDC released the latest "Quarterly Tracking Report on the Global AR/VR Headset Market in the Fourth Quarter of 2021" (hereinafter referred to as the Report). The report shows that global AR/VR headset shipments reached 11.23 million units in 2021, an increase of 92.1% year-on-year and almost doubled. Among them, vr headset shipments reached 10.95 million units, breaking through the annual mark of 10 million units for the first time; it is expected that global shipments will exceed 15.73 million units in 2022, an increase of 43.6% year-on-year.
After several years of lows, the VR market has finally ushered in a highlight moment. The report calls the annual shipment of VR headsets exceeding 10 million units as an important inflection point in the industry, and its significance is self-evident. So how are domestic manufacturers performing in the spring of VR?
01
The domestic VR situation is gradually becoming clearer, and more than half of the two strong ones are in the country
The domestic market that everyone is concerned about also shows a clear pattern change. Judging from IDC data, in terms of VR shipments of online e-commerce channels in China in 2021, ByteDance Pico and iQiyi Adventure VR jointly divided more than half of the market share.
Among them, the performance of Adventure VR is worth paying attention to: not only the annual shipment market share of online e-commerce channels accounted for 27.4%, ranking second in the industry; it also achieved a strong increase of 475.9% in omni-channel sales in the fourth quarter, and its market share rose to the first place, as high as 22.5%, entering the first camp in one fell swoop.
Looking back at the past, the domestic VR market started very early, and once took advantage of the opportunity of the wind outlet in 2014-2015 for a while, and people and horses of all sizes flocked in, which can be called a hundred regiments war. However, the existence of many high thresholds such as hardware, technology and content makes the early VR experience very unsatisfactory, and the market does not have the expected outbreak after the virtual fire, but stagnates. Investors quickly made a decision to withdraw from the uncertain market. As a result, the VR market cooled down rapidly in 2016, and a large number of startups disappeared from view.
After years of full competition, the domestic chaotic VR market has finally become clear and orderly, forming a pattern in which Pico and Adventure VR are two strong, and a number of small and medium-sized enterprises coexist.
This is not bad, the domestic VR market remains some of the backbone enterprises like Pico, Adventure VR and other companies that focus on research and development technology and cultivate the market. Without the previous speculative atmosphere and noisy atmosphere, the market is more healthy and orderly, because everyone's mind is used on products and technologies, and the operating style has become more pragmatic and low-key. In recent years, domestic VR players have adopted a relatively low-risk and low-cost follow-up strategy, closely followed the dynamics of the international giant Meta, maintained a tight pace in technology and the market, and achieved good market results.
Although Chinese manufacturers are not yet able to challenge Meta's global supremacy, they tenaciously squeezed into the global second lineup in the form of a group. According to IDC data, in the 2021 global VR market ranking, Dapeng VR, Pico, HTC, and iQIYI Adventure VR entered the top 5, occupying 4 seats.
Especially in terms of hardware, the fist products of domestic enterprises are getting closer and closer to the level of Configuration, Performance and Experience of Meta. The launch of Adventure 3 and Pico Neo3 basically equaled Meta Quest 2, the world's most popular mainstream product. Thanks to factors such as cost control and advanced marketing concepts, product prices have broken through the psychological threshold of consumers and expanded market demand. It can be said that the two products of Adventure 3 and Pico Neo3 have not only become blockbusters themselves, but also driven the sales of their full-line products and greatly enhanced the awareness of their respective brands in the user's mind.
At the same time, backed by iQiyi's Adventure VR and Pico, which was acquired by Byte in 2021, is also vigorously investing in the layout of content and ecology, and the prototypes of each VR ecosystem have begun to emerge. Compared with the development and production of hardware, content and ecological construction not only require a larger investment of funds and resources, but also to maintain a longer period of patience. The overall strength advantage of Adventure and Pico makes them win at the starting line, and the comprehensive competitiveness is more obvious, and it is logical to become the industry leader.
In the next few years, the development of the domestic VR market will largely depend on their performance.
02
Adventure VR by what to kill out of the siege?
In just one year, iQIYI Adventure VR has kept pace with Byte Pico, and even occupied the first place in the performance of the fourth quarter of last year, achieving a strong growth of 475.9% year-on-year. According to the president's analysis, it can be boiled down to three key factors.
1. Long-termism: seize the outlet and invest value
iQIYI's VR layout began in the last outlet period. As early as 2016, iQIYI began to lay out its VR business, and in terms of content, iQIYI came to the fore with the VR game "Spirit Domain" produced by its own IP, opening the curtain on the creation of VR entertainment, games, film and television and other VR content. In terms of hardware, iQIYI has incubated the VR ecological subsidiary - iQIYI Intelligence, which is now the dream bloom. Subsequently, the Adventure 1 generation product was released, which was the first step taken by iQiyi's VR hardware business, and the later well-sold Adventure 3 was based on it.
Just as the so-called Rome was not built in one day, iQiyi Adventure VR squeezed the top two, in the final analysis, it is the result of its long-term doctrine and accumulation.
2. Correct strategy: both soft and hard to solve user pain points
The reason why vr's first outlet faded quickly, in addition to the poor experience caused by hardware configuration and technology constraints at that time, the shortcomings of poor content were the biggest bottleneck that was difficult to retain users. Simply put, in the eyes of consumers at that time, VR hardware was not only expensive, but also not fun and nothing to play, so why should I buy it?
Unlike most other VR players who start with hardware and focus on hardware, iQiyi is a combination of hardware and software, and eventually formed a long-term strategy of content + hardware.
As we all know, as a mainstream video entertainment platform in China, film and television, entertainment and other content are iQIYI's core competitive resources, which also allows iQIYI to bring great blessings to adventure products in the VR video era of 1.0.
In the current VR 2.0 era of "video + game", the construction of content ecology is an important step. Last year, Adventure VR co-created a game ecology with outstanding developers through the three main modes of centralized procurement, customized development, and port subsidies, and also proposed a high-quality game route to ensure that on the basis of professional enthusiast-level games, a variety of mass entertainment games were launched to break the circle. According to statistics, Adventure VR has established contacts and confirmed cooperative relations with more than 100 well-known game developers at home and abroad.
From Pico's recent actions after being acquired by Byte, we can also see the importance of VR content ecological construction. It is reported that after Ren Lifeng, the person in charge of watermelon video, Song Binghua, the head of Douyin Variety Show, and Wu Zuomin, director of Douyin Entertainment, were transferred to Pico, obviously they did not come to help Pico do Douyin drainage, but to strengthen the content shortcomings.
Zhao Siquan, an analyst at IDC's China Terminal System Research Department, believes that although the popularity of the meta-universe and the successive launch of new products have promoted the recovery of AR/VR headset shipments in the Chinese market in 2021, there is still a very large potential for the consumer market to be developed. The shipment of VR all-in-one products in 2022 will still rely on the attraction of game content, and manufacturers need to focus on the construction of content ecology to enhance consumers' willingness to purchase and the initiative to continue to consume in the app store after purchase.
It can be seen that in the construction of content ecology, Adventure VR has taken a step early.
While constantly enriching content and consolidating the ecological foundation, Adventure is also striving to create hardware products with higher configuration and better experience. If Adventure 3 is the flagship machine for enthusiasts, then Adventure Dream is a thousand yuan machine to kill the sinking market. Through a planned pricing strategy, iQIYI Adventures has continuously penetrated into the general consumer group, gradually expanding the market size and market share.
3. Marketing innovation: increase the heat and drive sales
The aroma of wine is also afraid of the deep alley, in this era of attention economy, it is difficult for manufacturers who will not shout and market their own.
IDC also mentioned in the report that the marketing model and sales channels of domestic VR manufacturers will begin to change in 2021. With the acquisition of Internet head manufacturers, new marketing methods such as live broadcasting of e-commerce platforms, KOL promotion, spokesperson publicity, and event advertising implantation have successively stimulated the consumer market. At the same time, it is worth noting that at the beginning of 2022, VR manufacturers have begun to try offline private brand stores, in addition to providing consumers with new channels to purchase products on e-commerce platforms, they have the meaning of brand behavior.
It can be seen that in the past year, whether it is Adventure VR or Pico, it has made a lot of innovations in marketing and performed remarkablely.
For example, Adventure VR buys hardware to send games, punch cards to buy machines for free, positions the public's circle-breaking sales strategy, and takes advantage of the east wind of the meta-universe, etc., all of which have achieved good results.
Taking the 300-day punch card full cashback benefit launched by the new Dream Premium Edition as an example, the reservation was opened shortly after it exceeded 100,000, and multiple replenishments were sold out in seconds. The Adventure 3 user purchased a machine and sent thousands of yuan to 30 games, the market response was strong, and then it was imitated by the industry. Marketing innovation not only brings an increase in the sales of ADVENTURE VR hardware, but also increases the popularity of the topic and brings continuous traffic. Pico is under the support of ByteDance's traffic, in the vibrato, volcano small video, today's headlines and other platforms to obtain a large number of promotion resources, during the Spring Festival, also invited many stars to promote "2022 treasure New Year goods" and "play VR to choose Pico" and other activities.
Or encouraged by higher sales in 2021. It is reported that Pico has significantly increased its expected sales target for this year, from the original 1 million units to 1.8 million units. After the launch of the blockbuster new flagship Adventure 3, its market share has also soared, bursting out of a strong competitiveness.
03
The future: those who get the ecology will get the VR world
IDC expects VR/AR headset shipments to grow 46.9% year-on-year in 2022 and a COMPOUND annual growth rate of 35.1% by 2026, compared with 11.2 million units in 2021. That is to say, in the next three or five years, the global VR market will reach 45 million units or more, becoming another mobile terminal market after smart phones.
Referring to the development process of smart phones in the past, the VR market will be further reshuffled in the future, leaving only a few major manufacturer brands. At present, in the short term, hardware research and development is indeed a weapon to increase sales, but in the long run, ecological prosperity is the key to competition. Otherwise, even if the new is successful, it will be difficult to achieve user retention, let alone the long-term value of the late development user.
This is also being demonstrated. Foreign Meta, domestic iQiyi Adventure, ByteDance Pico, all invariably move towards the development of hardware + content + ecology, and they are precisely the best development momentum. In contrast, the hardware-oriented VR pioneer HTC seems to have once again followed in the footsteps of smartphones.
Of course, for ByteDance and iQiyi, there is an open secret to occupying the VR track - that is, the metaverse above the VR strategic level. In the case that the traffic dividend of the traditional Internet is no longer there, VR will be conducive to helping them seize the traffic entrance of the metaverse and build a metaverse ecology in the future.
Since last year, From the acquisition of VR company Pico and the game company Mu Hitomi, to the online social products Pixsoul and Party Island, to the virtual girl group A-SOUL and the virtual person "Li Weike", in just a few months, ByteDance has quietly put together the "meta-universe three-piece set" of hardware, games and social networking.
Although iQIYI did not clearly propose the meta-universe strategy, its subsidiary iQIYI Intelligent changed its name to "Dream Bloom" last year and announced a comprehensive transformation of meta-universe company. In addition, iQiyi also proposed the concept of the IP universe.
In October last year, iQIYI Wang Xiaohui proposed a series of IP development plans for the "Huaxia Ancient City Universe". That is, based on the continuous innovation of the "one fish eats more" model, the innovative attempt to build the IP universe, to create a new IP development model with a unified content world view, universal values, a unified industrial industry chain, a unified online and offline, and a unified meta-universe business, hoping to achieve the interconnection and integration of all aspects of IP and create a new content scene and cultural consumption for users.
Among them, iQIYI's first IP content "Wind Rises Luoyang" has achieved one fish and twelve to eat, and also announced that it will land offline VR full-sense movies this year, bringing a more immersive offline IP experience in the form of game experience, VR technology, and film and television drama plot coordination. VR may bring impetus to the creation of entertainment meta-universes.
But whether it is Meta, or iQiyi Adventure VR, ByteDance Pico, only by doing a good job in hardware business, good content and services at the same time is the key to the ultimate competition.