"Domestic VR sales have exploded!"
Entering April, the answers of many VR practitioners were unprecedentedly consistent.
Domestic VR products led by Pico have always remained "mysterious" in terms of research and development direction, investment level, product progress, etc., but in the planning of product sales, domestic VR is actually taking small steps.
According to third-party media, ByteDance has raised Pico's 2022 sales target from 1 million units to 1.8 million units.
"Although a certain brand will not sell 5 million units in a Christmas season like Oculus, this year, many domestic brands have increased their target sales." Some VR channel providers say so.
The judgment of practitioners is that "the total sales of mainstream VR brands in China will definitely exceed 10 million." ”
However, the whole industry seems to be very contradictory, they are excited about the outbreak of the market, and they have to worry about how to undertake the outbreak.
"In this industry, the hardware outbreak cannot represent the outbreak of the industry, but can only be regarded as a beginning." Some industry observers have pointed out an important problem, as a service "entrance", in the eyes of domestic consumers, VR seems to be just a game device.
Whether it is VR or AR, practitioners expect productivity tools, that is, the entrance to the metaverse.
Compared with Meta's Oculus, regardless of the timing of entry, the level of technology or the market environment, it seems that there are huge differences with domestic brands. This means that domestic VR brands seem to have a model to follow, but they must find a new path.
01, VR explosion, domestic sales are expected to be adjusted to tens of millions of units
"JD.com's sales of VR all-in-one machines in January and February this year increased by 200% year-on-year, and sales in the first quarter have reached 50% of last year's full year." A person close to Jingdong told Ebang Power that the CURRENT VR products on the market are concentrated in boxes, glasses, and all-in-one machines, of which the box experience is not good, the glasses C-end products are not mature, and the VR all-in-one machine has become a flashpoint.
VR all-in-one machine is already a mature consumer electronics category
The person in charge of a well-known domestic VR brand also said, "In the fourth quarter of last year, the domestic VR all-in-one machine market has exploded, sales have doubled, and the growth of this year has also been very fast." He revealed, "The industry is too hot, and now brands are busy doing product upgrades." ”
"The real peak season for VR all-in-one brands is in September, when new products of various brands are concentrated on sale, and the market reaction is just beginning." The person in charge of the consumer electronics category of an e-commerce platform euphemistically told Ebang Power that the target sales of VR categories on various online platforms this year have exceeded 10 million units.
"Unlike the fourth quarter of last year, 2022 must be a big year for VR!" The person in charge added, "At the end of last year, the sales of those old products that were sold for one or two years were growing, and it is conceivable after the new products are released." ”
However, some VR brands revealed that this year's product upgrades in the industry may also revolve around the products themselves, such as VR screens, hardware and wireless streaming technology, through hardware experience upgrades to pull a new round of heat.
However, compared with Meta, Microsoft, Apple, and Qualcomm, which have regarded virtual reality devices as the next generation of computing platforms, the market position of VR products in China has not been verified.
"Domestic users use VR all-in-one machines 70% of the time to play games, other times in VR to watch movies. They simply see VR all-in-ones as entertainment devices, or even directly equate them with game consoles. It is equivalent to the VR user base at this stage is only a group of technology and game enthusiasts. The relevant person in charge of the VR brand frankly said that compared with xbox, PlayStation and Nintendo series game consoles, domestic sales have not exceeded 10 million units, so there is also a clear ceiling for VR sales under this awareness.
According to a report by Niko Partners, the Nintendo Switch console released in 2017 Chinese mainland sold 4 million units by the end of 2020, of which 1.3 million units were sold in 2020.
On the other hand, the current market structure of VR all-in-one machines can also be insight into its limitations.
Ebang Power asked the relevant responsibilities of various e-commerce platforms, and they generally believe that domestic VR sales are concentrated in Oculus, iQIYI Intelligent, Pico, Nolo and other head brands. Compared with MP3, smart phones, TWS headphones, smart watches and other categories through multi-brand competitive strategies, and even through the popularity of white cards, there is no room for small brands in the VR field.
Of course, some industry insiders pointed out that from a longer-term perspective, vr all-in-one machine is only a consumption scenario in the field of virtual reality. The outbreak of the entire industry can actually look forward to more forms of products, such as smart glasses and AR glasses. According to reports, OPPO, Xiaomi, Nreal, Rokid, etc. are developing C-end products with related content, but they are still a little far from forming a market.
However, there are also practitioners who are optimistic. For example, in the past, game console sales paid more attention to family units, and VR all-in-one machines were based on individuals. This helps lower the barrier to entry for consumption decisions.
The sony PS2, the most successful game console in history, has sold more than 157 million units worldwide. In contrast, VR product decisions are lighter, the use of scenarios is more diverse, and the amplification space will be one to twice that of PS devices.
For example, VR all-in-one machines have long-term software and hardware upgrade needs, and their related Internet concepts and future characteristics will help further expand their market space.
However, how to make the VR all-in-one machine tear off the label of game equipment and become the entrance to more software and hardware services is also the challenge of the entire industry.
In fact, the VR industry experienced a round of explosions and falls in 2016, when it was finally abandoned by the market because of the limitations of the combination of VR boxes and 3D film and television. Nowadays, VR, whose products have matured, what path must be taken to usher in a sustained, real outbreak?
02、How does Oculus do it?
When it comes to the outbreak of the VR all-in-one machine market, Meta and Oculus have played an indispensable role.
Meta's acquisition of the VR all-in-one brand Oculus, the Quest 2 product line, was officially launched in October 2020. By November 2021, Quest 2 sales have exceeded 10 million, and the growth curve is enviable. However, Oculus's achievements did not happen overnight.
Starting with betting on the VR market in 2014, Meta only really validated its vision in 2021. From the early Rift to the current Quest, Meta has made large-scale investments in VR software and hardware, and the process of product iteration is also quite difficult.
In terms of products, Meta's Oculus Go and Oculus Quest released in 2018 and 2019 failed to form an explosion due to poor hardware performance and immature handle experience, until Oculus Quest 2 had a qualitative upgrade in performance and six degrees of freedom.
Meta's 2021 annual financial report shows that the FRL division, which is built around the VR all-in-one software and hardware ecosystem, lost more than $10 billion a year. But from the $399 of the first generation to the $299 product pricing of the second generation, it can be seen that Meta does not regard hardware as a profit point. Compared with some brands that focus on hardware, Meta is building an ecosystem.
Horizon Worlds, Meta's VR social product
In the past 8 years, Meta has invested at least $500 million in the VR software service ecosystem. Oculus launches its own exclusive game every once in a while. At present, Oculus has nearly 30 exclusive 3A game masterpieces, including horizon series VR social and VR office services. Around Oculus hardware and software services, Meta has invested more than 10,000 human resources in research and development.
Oculus exclusive games at a glance
In terms of channels, after the release in October 2020, Oculus Quest 2 has fully entered online and offline channels such as Walmart and Amazon, and also provided sufficient conditions for reaching users.
In terms of product publicity, Meta also poured a lot of energy into Oculus Quest 2. Zuckerberg frequently accepts interviews with technology media and game experts to create momentum, coupled with a series of game expert reviews and recommendations and the promotion of the epidemic, product sales have risen all the way.
In fact, at Facebook's earnings call at the end of July 2021, when Zuckerberg pushed the concept of the meta-universe, the cumulative sales of Oculus VR products had reached tens of millions of units. In November, Zuckerberg changed the company's name, pushing the meta-universe concept to the climax, taking advantage of the VR equipment purchase boom triggered by this move, and the sales of Oculus Quest 2 in the European and American Christmas shopping season ushered in another explosion, directly selling at least 4 million units.
A series of data compared to the population of the United States and the number of households, Oculus can be regarded to a certain extent as a relatively popular smart wearable device. If Oculus is used as a benchmark, the differences between domestic brands in all aspects are actually more obvious.
First, the timing of entry. In contrast, domestic brands only launched a similar configuration of VR products in May 2021, the pace of sale is about eight months later than Oculus, to a certain extent, the limited number of domestic seed users have been completed by Oculus, but in fact, it is also considered to take some marketing "cheap", you can focus on the larger market.
Second, the app experience. Oculus users can download and experience thousands of VR games that would otherwise require payment to play through third parties, providing users with the opportunity to try them out and providing motivation for a larger user base to purchase hardware products. However, domestic brands have been restricted at the system level when installing software such as games, and users must go through the brand's official application store to consider the software revenue during the user education period, relying more on the natural development of the market.
Finally, sales channels. Based on the domestic "developed" e-commerce and distribution channels, domestic brands have certain advantages in this regard. At present, almost all of them have settled in Tmall, Jingdong and other platforms, Pico, Dream Bloom (formerly iQIYI Intelligence), etc. have laid out nearly 100 offline distribution channels in China, and Pico has also built its own brand experience store.
In addition, there are intensive actions in operation promotion and user education. For example, Jingdong launched a 30-day refund and exchange worry-free service for some VR products; Dream Bloom launched the "first machine main game for life free", the main "buy hardware to send games", and even give away movie members; other "continuous punch card cashback", under the joint promotion of the platform and the brand, the activity has reached half the price of punching 150 days, and the full amount of punching 300 days.
Under such a channel layout, domestic brands can almost be regarded as "late strikes" and have not been seized too much market by Oculus. According to the data just released by IDC, Pico and Dream Bloom Intelligent occupied 50% of the domestic VR all-in-one machine market in the fourth quarter of last year, of which the omni-channel sales of Dream Bloom Smart increased by 475.9% year-on-year, and the market share reached 22.5%.
03, skip the game mode Domestic manufacturers directly do social
As the industry insiders said, the advantages in the game scene are not long-term, and social and office scenes such as Meteor Worlds and Horizon Workrooms are the cornerstones of VR to become a mass consumer product. Once the habit of using the scene is occupied, it is difficult to get back, and if domestic brands want to occupy the market for a long time, they must put software services on a daily basis.
"VR viewing, VR games, VR interaction, VR office is a typical application scenario of VR equipment, movie viewing and games have matured, and now the focus is on doing a good job of VR interaction, VR office can not be done in a short time." One software developer confessed.
So, where are horizon worlds and Horizon workrooms in China?
At the end of 2017, Tencent launched the VR social product "Lucky Night VR", which was the earliest product for domestic companies to try VR social networking. In 2018, iQIYI launched the VR social theater iQUT Space.
Lucky Night VR has been developed in two versions
But these basic interactive services have not yet taken shape.
"VR games can show the advantages of VR experience, but the industry must have the ability to apply the interaction patterns summarized from VR games to other service forms." Let users have more to do in VR, and the market space will naturally expand. The head of consumer electronics brand operations said.
But the difficulty lies in the transformation of interactive experience to more scenes. China does not have such a large investment in the Horizon series as Oculus, and even VR games have little investment, and the possibility of making a circle-breaking and high-conversion service in a short period of time is not very likely.
Feng Zheng of Shunwei Capital said: "For VR, the game is an Easy model, which is easy for users to accept and promote. The domestic choice is a Hard mode, skip the game and directly make valuable applications. This initial stage will be difficult, once done well can accumulate high competitive barriers. ”
One of the ways to play is that based on the advantage of being a latecomer, domestic brands have not invested in VR games, but have directly borrowed from Meta's experience to invest in VR social and office.
In terms of software services, domestic enterprises are more in the meta-universe, virtual people under the concept of integration of voice social, live streaming, virtual performance services, to create a meta-universe social products that are not limited to the use of VR equipment. Similar to Baidu Xi'an, Super QQ Show, Byte Party Island, etc.
Super QQ Show
Some insiders said that virtual people live streaming with goods, virtual idols, virtual performances, etc. will all land this year, and such services will broaden the market space of VR all-in-one machines. "The metaverse and virtual people are so hot, the entrance of the VR all-in-one machine will definitely benefit."
Another direction of development is the launch of a new generation of virtual reality products. For example, big brands such as OPPO and Xiaomi directly skip VR and focus their products on smart glasses and AR glasses; Luo Yonghao, who is about to end the "true return", also bet on AR for new business. Behind this is not the hard pursuit of advanced product forms, but because the application scenarios of smart glasses and AR glasses products are concentrated in the office and other fields.
But regardless of software or hardware play, a unified understanding of brands is that VR and AR will not become popular products like smart phones in a short period of time, nor will they be subject to the price pressure of copycat white cards. This is also why, even if they know that users prefer pirated services, brands still dare to insist on continuing to polish their own software and hardware business closed loops, and have begun to build a healthy business model in the stage of seizing the market.
However, in the process of research, the interviewees also admitted that compared with Meta, the domestic market preparation is still insufficient to temporarily hold the Buddha's feet and borrow the concept of the Meta universe to do VR services. In particular, some applications that first landed on mobile phones and PCs cannot show the advantages of VR interaction. The real outbreak of the VR market must come from the simultaneous progress of software and hardware, and the domestic market still has a long way to go.