Source: Huatai Securities
Virtual reality + converged media
Foreign heavy games lead, domestic light content
According to the virtual reality plan of the Ministry of Industry and Information Technology, virtual reality + converged media refers to the use of virtual reality technology to help the production of integrated media content such as news reports, sports events, film and television animation, game social networking, short video, etc., promote the synchronous development of broadcast-grade high-quality, popular low-threshold virtual reality digital content, use virtual reality technology to help radio and television and online audiovisual formats update, support the construction of virtual reality audio and video zones and theaters, and explore new forms of interactive social formats based on virtual avatars. We believe that virtual reality + converged media mainly includes VR/AR+ games and VR/AR film and television scenes, and there is still a big gap between domestic and overseas from the perspective of content richness.
In terms of volume, Steam is currently the largest VR content agglomeration, with 7,065 VR-enabled content on the Steam platform as of November 2022. The Quest platform is more refined, the content review is stricter, and the same type of apps are generally not launched, so the number of apps is small and the growth rate is low, with only 434 VR content in stock in November 2022. App Labs, the Quest testbed, saw a rapid increase in the number of apps, with 1,532 VR titles in stock in November. Domestic mainstream platforms include PICO Store and QIYU VR, with 279/103 models of stock content, respectively, and there is still a big gap in number compared with overseas platforms.
Quest's application ecosystem is relatively perfect, and the domestic platform accelerates iteration. Although the number of Steam apps is larger, we believe that the ecosystem of Quest is more complete: as of October 2022, according to the Meta 2022 Connect conference, more than one-third of the Quest 400+ apps have generated more than $1 million in revenue, 55 with more than $5 million in revenue, and 33 with more than $10 million in revenue. Domestic manufacturers are also accelerating their layout, but from a strategic point of view, domestic platforms pay more attention to the research and development of light content (casual games, live videos, etc.) to achieve corner overtaking, and for heavy content (immersive games) mainly to introduce.
#1 Heavy VR content: overseas leading, slow update iteration; Domestic small factories research and development, large factories mainly to import
High-quality long-term content updates and iterations are slow, and most of them are developed overseas. From the game revenue rankings of 1H22 Steam and Oculus Quest, the top games by revenue are still high-quality long-term games that have been in operation for more than 2 years (there are 9 of the top 10 Quest platforms, and the top 10 of the Steam platform are all games that have been in operation for more than 2 years), and all of them are products developed by foreign and overseas manufacturers. We believe that there have been few new explosions in the field of VR games in the past 2 years, for the following reasons: 1) Hardware devices have not undergone major innovations since the release of Oculus Quest 2 in 2020, and the new products based on the pancake solution released in the second half of this year are innovative, but it will take time to verify whether there can be outstanding and innovative content that matches it; 2) There are already high-quality masterpieces in the mainstream VR/AR game category under current hardware conditions (such as music "Beat Saber" and shooting "Half-Life: Alyx").
Meta continues to acquire premium content developers. We have observed that Meta has continued to acquire developers behind games that perform well on the platform, such as Beat Games, developer of Beat Saber, BigBox VR, developer of VR chicken-eating game Population One, and Camouflaj, Armature Studio, developers of Iron Man VR and Resident Evil 4 VR, etc., to continue to support the development of VR games.
From the perspective of research and development, domestic factories are mainly small, and there is still a big gap with foreign countries. We believe that the reasons why there is still a gap between domestic heavy content research and development and overseas include: 1) Meta's support for VR content is relatively large, and it has invested a lot of resources since the acquisition of Oculus, while domestic manufacturers have invested relatively little in VR content; 2) The hardware ecology abroad is more perfect, and developers can achieve profits. From the perspective of domestic content, such as "Contractors" (Nanjing Caveman), "Fancy Skiing" (Hashi Technology), "Deadly Agent" (Mengtu Technology) are all built by small factories and mainly target overseas markets.
In the short term, domestic manufacturers mainly introduce heavy VR games, in addition to continuing equity investment and external cooperation; In the medium and long term, the direction of self-research has great potential. According to the list of PICO Top 10 popular paid apps, the top 10 games in sales are all imported games from overseas; According to the PICO store, 42 new games and application products were launched in the 1H22 PICO store, and 83% of the new online content in 1H22 is still imported from overseas. From the perspective of content research and development, at present, domestic manufacturers are more likely to bind content developers in the form of equity investment, such as Tencent, which has invested in Weimo Era and Yunnan Box Monster; Byte has cooperated with a number of domestic game companies in VR content, such as the Gundam IP game of Kaiying Network, and strategically invested in a number of leading AR/VR content R&D manufacturers in China, of which Mengtu Technology accounts for 15% of the shares. We also see that domestic manufacturers have also begun to increase their self-developed VR content, such as NetEase's self-developed VR game "Dawn Dragon Summoner" in 2016, and the joint venture established Yingnuo Interactive Entertainment in 2018 to distribute Survios' VR games; In June 2022, Tencent established an XR business line that integrates software and hardware, and actively tried software, content, systems, tool SDKs, hardware and other links. In the medium and long term, we believe that with the investment of domestic manufacturers, heavy content is expected to continue to break through.
#2 Light VR content: Domestic manufacturers accelerate the layout, intending to achieve corner overtaking
In terms of video, overseas manufacturers continue to promote and gradually normalize. In overseas markets, Meta has normalized VR live streaming of sports events, concerts and speeches through its VR live streaming application Horizon Venues (now integrated into Horizon Worlds), according to Meta's official website, in 2021, Horizon Venues launched more than 200 VR live broadcasts of various types and video content to achieve 8K+180-degree picture effects, including the world-renowned sports NBA, WNBA and ONE Championship, etc.; Concerts by well-known singers/bands such as Billie Ellish, Foo Fighters and Post Malone. In addition, Meta launched XTADIUM, a live sports app on the Quest Store, which offers free on-demand coverage of three NASCAR matches, two UFC Fight Pass events, a championship game, Euroleague Basketball, and live and on-demand streaming of the upcoming National Cup tennis tournament.
Meta's flagship social product, Horizon Worlds, has received a mediocre response and is yet to be verified. Horizon Worlds is Meta's flagship product in the social space, but the feedback from users is mediocre so far. According to Yingwei.com, the Meta file shows that Horizon Worlds initially targeted 500,000 monthly active users at the end of the year, but recently targeted only 200,000, and most visitors will not use the app after the first month, and the number of users has steadily declined since the spring. But there are still favorable factors in the future: 1) Meta said at the 2022 Connect Conference that in the future, Horizon Worlds will support multiple terminals, including mobile phones, PCs, etc., effectively lowering the threshold and achieving interconnection; 2) The quality of Avator will continue to improve, and legs will be added in the future, which will be more realistic, and with hardware upgrades, eye tracking, face capture and other functions are expected to be added; 3) In the future, Meta will cooperate with NBCUniversal and Youtube VR, and some normalized 2D applications are expected to improve user activity. Judging from Meta's statement at the performance meeting, the Horizon Worlds project still has a high priority within the company, and it is recommended to pay attention to the feedback of users after subsequent feature iterations.
Compared with overseas, we believe that light content is the key for domestic manufacturers to achieve corner overtaking: 1) short-term domestic users are accustomed to free downloads and recharge and pay in use, which is contrary to the buyout model adopted by heavy games (such as "Arizona Sunshine" and "After the Fall" launched in PICO); 2) There is still a big gap between the ability and willingness of domestic users to pay in the short term compared with overseas users, and user education is insufficient. Therefore, through music, sports, leisure games, videos, fitness and other types of applications is the key to expanding the user volume and cultivating user consumption habits, and for heavy content to be mainly introduced, which is also a common strategy used by domestic platforms.
Free content such as IP events and live concerts have become the key to attracting new ones and helping users to precipitate. According to the 2022 PICO Global New Product Launch, PICO has increased its efforts in the introduction of IP, including: 1) has successively launched the concerts of Wang Xin, Zheng Jun and Wang Feng, and at the end of the year, a Chinese female singer 6DoF concert is reserved; 2) Event cooperation, including the 2022 Winter Olympics, Bundesliga, Qatar World Cup; 3) VR movies and television include: VR version of the three-body problem, VR version of Spirit Cage, and wilderness survival in cooperation with Deye. In terms of classic content, PICO joined hands with leading film and television companies such as Disney and Sony Pictures in June 2022 to create the "PICO 3D blockbuster rekindling plan", a total of more than 100 3D classic films will be landed on PICO Video, including: Marvel's Avengers series, X-Men series and other global blockbuster IPs.
Head games are also predominantly light, focusing on fitness scenes. From the list of PICO Top 10 popular paid applications, it is mainly concentrated in sports, leisure, and music, and the gameplay is lightweight. At the same time, judging from the press conference of PICO, PICO's layout for fitness continues to strengthen, announcing the launch of "Super Burning Moment" that integrates personal training, rhythm music, yoga, etc., and will also cooperate with super orangutans, Pamela and other head IPs to create VR fitness content in the future. In addition, the rhythm music game "Sparkling Spirit", the VR fighting application "Lemmy Combat Exercise", the sports and leisure games "All-in-One Summer Sports VR" and "Live Fishing" have also been launched on the PICO platform. PICO 4 is also equipped with a self-developed CalSense fitness monitoring algorithm, which can accurately calculate calories burned based on the user's body data and trajectory, and also launches a wearable tracker.
In terms of social networking, domestic manufacturers continue to layout, it is recommended to pay attention to follow-up progress. Domestic manufacturers continue to deploy in the field of virtual reality social platforms: in December 2021, Baidu released a virtual reality social platform Baidu Xiyang to support VR devices to provide users with immersive experiences; In June 2022, Mango Phantom City was launched on major platforms such as PICO, iQIYI Adventures VR, and NOLO; On November 11, 2022, the UGC platform PICO Light World opened online and public testing, it is recommended to pay attention to the subsequent commercialization progress.
#3 AR content: AR games lead overseas, and Chinese manufacturers accelerate the layout of AR movies
The AR game "Pokémon Go" is out of the circle, and foreign countries are leading the layout of AR games. Overseas AR game manufacturer Niantic has successively launched "Ingress", "Pokémon Go", "Harry Potter: Wizards United" and other popular games, which have a great influence in the world. LBS game "Pokémon Go" allows players to explore and collect more than 100 different types of Pokémon sprites around the world, and has continued to achieve outstanding performance since its release in July 2016, according to Statista's statistics, as of August 2022, the game's total global revenue is about $4.5 billion, of which 2021, 1-8M22 revenue is 8.87/$431 million, respectively. Domestic manufacturers have also tried in AR games, such as NetEase, which launched the AR game "Yumeng" in 2017, but the overall influence is small.
With the launch of domestic consumer-grade AR glasses, AR viewing is in the ascendant. Since 2022, Xreal, Rokid, and Thunderbird Innovation have successively released consumer-grade AR, doing subtraction on B-side AR glasses, eliminating a large number of interactive functions, emphasizing more lightness, display effects, and increasing the layout in movie viewing. For example, in August 2022, Xreal announced cooperation with iQiyi and Migu Video, the leading domestic online video platforms, to create a richer AR content ecological experience. At present, users can watch more than 100 3D movies through the iQIYI AR App in the AR space of Xreal glasses, and enjoy the theatrical 3D giant screen effect anytime, anywhere; In addition, users can watch the world's top sporting events, including Europe's top five football leagues, UFC, and more, through the Migu video app of Xreal glasses.
Market space: China is expected to be 77.3 billion in 2026, CAGR 41% in 2022-26
We estimate that China's virtual reality + converged media market space will be 14 billion yuan in 2021, and it is expected to reach 77.3 billion yuan in 2026, with a CAGR of 41% in 2022-26. Our calculations are based on: 1) Toubao Research Institute expects China's VR game/VR film and television market space to grow from 78/5.2 billion yuan in 2021 to 246/14.4 billion yuan in 2024, considering the gradual maturity of the industry, we expect that the year-on-year growth rate of China's VR games and 30%/25% in 2025-26 will be 35%/30%, respectively, and the growth rate of VR film and television will be slightly lower than that in 2024; 2) AR is still in the early stages of development, IDC data shows that China's VR/AR hardware shipments in 2021 were 134/100,000 units, respectively, but IDC predicts that China's AR hardware CAGR will be 74% in 2022-26, higher than VR's 51%, and we believe that this trend also applies to VR/AR content. We expect that the proportion of AR games in VR/AR games in China will increase from 6.9% in 2021 to 12.9% in 2026, and the proportion of AR films and TV in VR/AR films and TV will increase from 6.9% in 2021 to 15.5% in 2026, that is, China's AR games/AR films and television will increase from 6/400 million yuan in 2021 to 64/4.3 billion yuan in 2026.
We estimate the global virtual reality + converged media market space to be $34.5 billion in 2021, $136.4 billion in 2026, and a CAGR of 32% in 2022-26; We expect the overseas virtual reality + converged media market space to be $32.5 billion in 2021, $125.3 billion in 2026, and a CAGR of 31% in 2022-26; In 2026, China's virtual reality + converged media global market share will be 8.1%. Our calculations are based on assumptions: 1) Zion Market Research expects the global VR gaming market to grow from $23.2 billion in 2021 to $90.7 billion in 2026, with a CAGR of 31.4% in 2022-26; 2) According to Research and Markets, the global AR game market space will be $6.4 billion in 2021, with a CAGR of 33.8% in 2022-27, considering the gradual maturity of the industry, we expect the industry growth rate to gradually slow down, with a global AR game market space of $30.5 billion in 2026 and a CAGR of 37% in 2022-26; 3) According to Omdia and Comscore, the global cinema & home/mobile entertainment and pay TV market was valued at $328.2 billion in 2021 (2020: $309 billion), and we expect it to grow at a CAGR of 3% in 2022-26, considering the continued rollout of consumer hardware such as the Quest, we expect virtual reality penetration to be 1.5% in 2021 and continue to increase at a rate of 0.5pct per year in 2022-26 The global VR/AR film and television market was $4.9 billion in 2021 and is expected to reach $15.2 billion in 2026.
Virtual reality + industrial production
According to the Action Plan for the Integration and Development of Virtual Reality and Industry Applications (2022-2026), virtual reality + industrial production requires focusing on key vertical industry fields, promoting the deep integration of virtual reality and industrial Internet, supporting the application and promotion of virtual reality technology in key links of the whole life cycle of products such as design, manufacturing, operation and maintenance, and training, strengthening compatibility with digital twins and data, and promoting the integration and intelligence of the whole process of industrial production. Support industrial enterprises and parks to use virtual reality technology to optimize production management, energy conservation and emission reduction, and achieve quality improvement, efficiency and cost reduction. Develop a virtual reality open service platform that supports multi-person collaboration and simulation, open up product design and manufacturing, build a new remote operation and maintenance solution that integrates virtual and real reality, create a new model of employee skills training adapted to various advanced manufacturing technologies, and accelerate the digital and intelligent transformation of industrial enterprises.
Virtual reality accelerates the digital and intelligent transformation of industrial enterprises, reducing costs and increasing efficiency
Virtual reality and other technologies will become an important boost for the landing of the industrial metaverse. As early as 2013, in the Industry 4.0 proposed by Germany, the virtual and real fusion simulation technology, namely Cyber Physical System, is considered to be the core of intelligent manufacturing. On October 27, 2021, the 2021 World Industrial Internet Industry Conference opened, Fan Ji'an, chief scientist of China Unicom, proposed at the meeting that by integrating CPS (cyber-physical systems), digital twins and 5G-induced AR, VR, AI computer vision, low-latency remote control and other applications in accordance with the concept of "meta-universe", AR/VR is no longer limited to on-site assisted installation, skill training, with the help of this technology, enterprise product design, process development, trial production testing, business management, Marketing and other things can be opened to the world.
The concept of the industrial metaverse is similar to the direction of the next stage of Industry 5.0 for deep collaboration between man and machine. Looking back at history, the industrial revolution has moved from mechanization to digitalization and intelligence. The concept of "Industry 4.0", first proposed at the Hannover Messe 2011 trade fair in Germany, refers to the fourth industrial revolution in human history, the greater application of information and communication technologies (ICT) to enable the digitalization and intelligence of factories. The EU officially proposed the concept of Industry 5.0 in 2021, based on the concept of Industry 4.0, paying more attention to the interests of workers, sustainability and industrial resilience, from a technical point of view, the deep collaboration between man and machine will become one of the important research directions in the era of Industry 5.0.
Industry 4.0 mainly emphasizes the integration and interconnection of human-machine-thing-environment at the data and information level; Industry 5.0 also emphasizes the integration and interconnection of human-machine-thing-environment at the knowledge level, including knowledge transfer, sharing, interaction, learning and integration improvement, as well as knowledge aggregation, reorganization and system construction of industrial production chain, value chain and industrial chain. This will not only essentially improve the ability of industrial systems to deal with complexity and uncertainty, but also give birth to knowledge-driven new formats, new models and new applications, such as industrial knowledge services, industrial knowledge collaboration, industrial decision-making automation, etc., so as to realize smart industry and promote human society to truly enter the "knowledge economy era" and "smart era".
Virtual reality technology can be applied in all aspects of the industrial metaverse. From R&D, testing, production, transportation, sales and service and other links and industrial chain, enterprise, workshop, production line of each industrial system granularity.
Virtual reality technology empowers industrial visualization and intelligence, breaking the limitations of physical space. Office collaboration in the field of industrial production breaks through the limitations of physical space with the blessing of virtual reality technology. With the concept of metaverse giving rise to a large number of VR/AR technologies, users can enter virtual reality scenes by wearing VR headsets and other devices to achieve immersive experiences. When this technology is applied to industrial scenarios, modern industrial production processes are expected to break the limitations of time and space and realize production collaboration under virtual links.
Overseas leading enterprises such as Microsoft cooperate deeply with customer enterprises to create personalized solutions through the integration of software and hardware. Microsoft and Saint-Gobain work together to create a remote training solution. The French Saint-Gobain Glass Group is a global leader in sustainable, high-performance building materials, and its specialized glass products rely on state-of-the-art production equipment maintenance and in-depth training. With Microsoft's Dynamics 365, HoloLens and a series of software and hardware technologies, Saint-Gobain Group enables engineers to remotely view, guide the production process, and train technicians remotely. In January 2020, Saint-Gobain's IT team began its first proof-of-concept (POC) and successfully deployed it across its five facilities.
For remote collaboration pain points, mixed reality solutions can effectively save costs. Dedicated equipment for the manufacture of glass requires expert technicians to maintain, but experts with specialized knowledge are difficult to guide at any time, often requiring long journeys and thousands of euros in international travel costs. In addition, training new employees involves the transfer of professional skills, and classroom training and paper manuals are difficult to help new employees understand the actual operating environment of the factory. In response to these pain points, Saint-Gobain was able to use HoloLens in its five factories to monitor and improve the procedures regularly checked by dedicated maintenance technicians by purchasing Microsoft HoloLens and Microsoft Dynamics 365 Remote Assist, thereby saving about one hour per line per week. Save a lot of money on expert travel.
PTC teamed up with Microsoft to create an immersive operations strategy for Howden. Founded in 1854, the Howden Group is a multinational company specializing in the production of large industrial fans, blowers, process gas compressors and rotary heat exchangers. The equipment produced by the Howden Group is often used in the critical industrial links of downstream customers, and any downtime can have a significant adverse impact on the normal production process, but it is difficult to achieve real-time operation and maintenance monitoring of equipment such as blowers. With the help of PTC and Microsoft, Howden embarked on a digital transformation to design better operational strategies for customers in mixed reality with technologies such as PTC Vuforia Studio and Microsoft HoloLens, significantly reducing the cost of unplanned downtime.
Mixed reality technology provides an intuitive view of device operations and reduces downtime. With Vuforia Studio, users can leverage their rich existing 3D models to integrate IoT data to deliver efficient augmented reality experiences. The mixed reality experience created in Vuforia Studio provides Howden's customers with an enhanced view of the device, including visualizing the inside of the machine. Howden extracts ThingWorx data running on the Azure IoT cloud and overlays it on physical products, enabling device operators to view the health and performance of devices to improve day-to-day operations. Along the way, predictive maintenance alerts, fast part identification, and easy-to-understand repair sequences enabled by mixed reality provide all the information you need to resolve issues and keep equipment running as efficiently as possible, preventing failures and downtime.
Market space: China is expected to be 61.3 billion in 2026, CAGR 80% in 2022-26
China: According to Frost & Sullivan and China Business Industry Research Institute, the market size of China's industrial Internet platforms and related solutions was 43.3 billion yuan in 2021 and will reach 178.6 billion yuan in 2025, with a CAGR of 43% in 22-25 years. We expect that China's virtual reality + industrial production market space will be about 3.2 billion yuan in 2021, or 61.3 billion yuan in 2026, with a CAGR of 80% in 2022-26, based on assumptions: 1) Considering the promotion of industry policies and the iteration of virtual reality software and hardware, the proportion of virtual reality technology in 2022-2026, including hardware and software, in the overall Chinese industrial Internet platform and related solutions market size increased from 7.5% in 21 years to 24% in 26 years; 2) Considering the continuous layout of large manufacturers, it is estimated that the market size of China's industrial Internet platform and related solutions will maintain a year-on-year growth rate of 43% to 255.4 billion yuan in 2026.
Global: According to KBV Research, the global manufacturing virtual reality market size was about $4.4 billion in 2018 and will reach $28 billion by 2028, and the increase in AR and VR applications for manufacturing plant production improvement and employee training has stimulated the expansion of the industry, and virtual reality will be applied to more industrial production scenarios in the future with AR and VR technology advancements. Based on KBV Research, we estimate the global manufacturing virtual reality market to reach $24.7 billion by 2026, with a CAGR of 24% over 22-26.
Virtual reality + education and training
Primary and secondary schools/vocational/higher education have been rapidly landed, and overseas universality is now higher
According to the virtual reality plan of the Ministry of Industry and Information Technology, virtual reality + education and training refers to the construction of a number of virtual reality classrooms, teaching and research departments, laboratories and virtual simulation training bases in primary and secondary schools, higher education and vocational schools, and the development of a number of virtual reality digital courses based on the syllabus for experimental and associative teaching content, strengthening the interactive practice of students with various virtual objects, complex phenomena and abstract concepts, promoting the upgrading of teaching modes to independent experience, and creating immersive new classrooms that support independent inquiry and collaborative learning. Serve the major national strategy, promote "virtual simulation experiment teaching 2.0", support the construction of a number of key virtual simulation experiment training projects, and accelerate the cultivation of talents in short supply.
According to application scenarios, we believe that virtual reality + education and training mainly includes primary and secondary education, vocational education and higher education. Primary and secondary education is committed to making teaching in various scenarios more attractive, effective and fair through technologies such as AR/VR; Vocational education refers to the cultivation of professional talents by overcoming the "three highs and three difficulties" (high investment, high loss, high risk, difficult to implement, difficult to observe, and difficult to reproduce) and other practical training problems through measures such as building a virtual simulation training base; Higher education refers to the use of AR/VR and other technologies to build VR laboratories, etc., to empower student development and scientific research development. From the comparison at home and abroad, we believe that in primary and secondary education, foreign applications are relatively more extensive, and a variety of products have been developed for students and teachers with disabilities; In terms of vocational education, domestic and foreign countries attach importance to virtual simulation training bases, and there is not much gap in landing scenarios; In higher education, foreign countries are ahead in exploring interdisciplinary and soft skills at home.
Overseas policies started relatively earlier, and related industries matured earlier. The National Information Infrastructure (NII) program, announced by the Clinton administration in 1993, laid the foundation for the development and application of distributed virtual reality. According to the Virtual Human Interaction Lab (VHIL), professors at Stanford University founded the Virtual Human Interaction Lab with students as early as 2003, and have since conducted a number of VR-related research projects, including research on the ability to identify witnesses in virtual environments.
Domestic policy efforts were made after 2016/17. Domestic policy began in 2006, and in the State Council's 2006 National Medium and Long-term Science and Technology Development Plan Outline (2006-2020), VR technology was listed as one of the three frontier technologies that need to be developed in the field of information technology. But the policy really began to land on a large scale after 2016/17, when the overseas virtual reality + education industry had a relative maturity.
#1: Primary and secondary education: Foreign education is more universal and pay more attention to special education
Virtual reality scene teaching is more engaging, more effective, and fairer. At present, the following applications have been realized in primary and secondary education at home and abroad: enhanced/partially/completely replaced traditional classroom learning, improved classroom experience (immersive virtual field trips, or interaction with 3D models, etc.), such as the domestic Wen Education has built VR super sensory classrooms, equipped with VR all-in-one equipment and teaching control systems, and developed multiple VR course resources such as mathematics, languages, and foreign language for teaching; SeekXR has launched an educational platform called Seek Education, with courses covering anatomy, animals, art, biology, history, and physical sciences.
Foreign countries are ahead of China in terms of universality, such as paying more attention to special education. In special education, VR has been used abroad to help students with autism spectrum disorder (ASD) and attention deficit hyperactivity disorder (ADHD) learn, such as 1) Project VOISS project to help middle school students with learning disabilities develop and practice social skills; 2) The Floreo project offers VR-based social and life skills courses for young people with autism, among other things.
#2: Vocational education: build a virtual simulation training base to solve the problem of "three highs and three difficulties"
At home and abroad, we attach importance to virtual simulation training bases. Domestically, according to the Action Plan for Improving the Quality and Training of Vocational Education (2020-2023), about 100 demonstration virtual simulation training bases will be selected in the future. In foreign countries, majors with strong hands-on ability requirements such as electrical, mechanical, clinical medicine, etc., and majors with greater practical training needs, such as supply chain management, financial investment, computer programming, etc., are laid out in virtual simulation laboratories.
Virtual reality + vocational education is committed to solving the "three highs and three difficulties" problem, and application scenarios include such as in VR+ machine operation, enterprise training, etc. In China, representative scenarios include 3D interactive teaching systems and flight simulation training systems, in addition, State Grid, Audi, Midea and other companies continue to introduce VR technology for employee training, and at present, Manheng Technology, OneChuancheng and other enterprises have achieved the commercialization of related businesses. In foreign countries, Inlusion launched the aircraft maintenance VR training system to help the development of VR+ aircraft; In 2021, Bank of America announced soft skills training using VR technology in nearly 4,300 financial centers in North America, involving about 50,000 employees; Walmart deployed VR devices at scale in 2018, using Oculus Rift and STRIVR content to train millions of employees in VR, including new products and services, as well as customer response training.
#3: Higher education: Foreign countries are relatively ahead in the development of students' soft skills
Universities at home and abroad continue to deploy virtual reality + higher education. We observed that Chinese Minmin University, Southwestern University of Finance and Economics, Tianjin University, Shanghai Jiao Tong University, Stanford University, University of California, Berkeley, etc. have all deployed virtual simulation laboratory teaching.
In addition to professional courses, foreign universities also focus on training students' soft skills. For example, Career Mindset Development in the UK is an interactive virtual reality simulation developed by Bodyswaps to exercise students' expression skills; University of Michigan's programs that use immersive technology to develop soft skills and leadership, among others. According to VR Gyro, in November 2022, immersive learning software provider Bodyswaps announced a partnership with Meta to fund VR soft skills training.
Market space: China is expected to be 24.2 billion in 2026, CAGR 62% in 2022-26
We expect China's virtual reality + education and training market space to be 2.2 billion yuan in 2021 and 24.2 billion yuan in 2026, with a CAGR of 62% in 2022-26. Our calculations are based on: 1) VR gyro is expected to have a market space of 2.2 billion yuan in China's VR/AR+ education and training market in 2021 and 6.1 billion yuan in 2023; 2) We expect China's global market share to increase steadily at a rate of 0.2pct per year in 2024-26 (+0.2pct year-on-year in 2023).
We expect the global virtual reality + education and training market space to be $12.8 billion in 2021, $101.9 billion in 2026, and a CAGR of 51% in 2022-26; We estimate that the overseas virtual reality + education and training market space will be $12.5 billion in 2021, $98.4 billion in 2026, and a CAGR of 51% in 2022-26; In 2026, China's virtual reality + education and training global market share will be 3.4%. Our calculations are based on: 1) according to ReportLinker, the global VR+ education market space was $6.4 billion in 2021 and is expected to reach $32.9 billion in 2026, with a CAGR of 39% in 2022-26; 2) According to The Business Research Company, the global AR+ education market size was $6.4 billion in 2021 and is expected to reach $69 billion in 2026, with a CAGR of 49% in 2022-26.
Virtual reality + cultural tourism
Application and promotion of overseas theme parks, domestic virtual reality empowers traditional cultural tourism resources
The Action Plan for the Integrated Development of Virtual Reality and Industry Applications 2022-2026 points out that it is necessary to promote the development of virtual reality digital experience products in cultural exhibition halls, tourist venues and characteristic neighborhoods, so that excellent cultural and tourism resources can "come alive" with the help of virtual reality technology. Carry out innovative applications of virtual reality such as pre-departure previews, virtual and real integrated navigation, guided tours, art exhibitions, and restoration of cultural relics and monuments, and encourage first- and second-level museums and qualified tourism activity venues to set up immersive experience facilities and equipment. At the same time, it is necessary to support the application of virtual reality technology in the field of tourism, promote the development of interactive and immersive digital experience products in scenic spots, resorts, neighborhoods, etc., and develop new tourism services such as immersive interactive experiences, virtual displays, and smart guides. Cultivate new business formats such as cloud tourism, cloud live broadcasting, and cloud exhibition, and launch a number of new scenarios for immersive tourism experience.
Virtual reality technology can bring unprecedented experience to viewers and visitors through the digital processing and immersive experience of cultural content. Traditional cultural content will be comprehensively upgraded, and local cultural tourism resources are also expected to be revitalized with the empowerment of virtual reality technology. In addition, the new interactive method provided by virtual reality can also provide new tools and functions for content creation in the cultural field, better visualize and modify virtual content, greatly improve the ability of expression, enhance the effect of cultural communication, and better reflect the charm of culture.
Overseas theme parks and park scenes V-knife/A-knife applications are relatively advanced. In Japan, for example, Universal Studios Japan is also known as USJ. There are three main types of VR rides in the park: the first is for visitors to sit in the theater and watch a stage play performed by real people and virtual images, which can bring visitors a strong visual experience with the cooperation of actors and animation, including "Terminator 2-3D" and "Woody the Woodpecker". The second category is 4DVR movies and VR roller coasters, which bring immersive experiences through VR content + vibration seats, jets, and sprinklers, and in 2021, Universal Studios Japan launched the first "Ghost Slayer Blade" animation-themed VR roller coaster "Ghost Slayer XR Ride". The third category In January 2022, Universal Studios Osaka launched XR WALK facilities, and jointly launched a VR version of "Monster Hunter World: Icefield XR Walk" with "Monster Hunter" games, wearing VR equipment and somatosensory equipment and weapons to enhance the effect of virtual reality applications.
The exhibition shows that the leaders carry out cooperation pilots with local governments and institutions, and lay out cultural tourism metaverse. In January 2022, Fengyuzhu signed a metaverse pilot strategic cooperation agreement with the Fengxian District Government, and built a "Metaverse City Meeting Room" located on the Baidu Xiyang Metaverse Platform for the Fengxian District Government. The virtual city hall displays the cultural history of Fengxian area, key projects such as Fengxian New Town Yanzi Academy and "Flower of the Sea" Civic Activity Center, allowing citizens and tourists to experience the urban development, historical context and industrial cluster of Fengxian New City in an immersive way. In addition, Fengyuzhu also signed a metaverse strategic cooperation framework agreement with Zhangjiajie Metaverse Research Center, combining the high-quality tourism assets of Zhangjiajie scenic spots and Fengyuzhu's digital technology application capabilities to carry out in-depth cooperation on the innovative application of metaverse cultural tourism scenarios. The two parties plan to jointly build an offline metaverse cultural tourism experience center, innovatively integrate cutting-edge technologies in the metaverse field such as VR/AR, glasses-free 3D, holograms, and digital virtual humans, so that tourists can experience the essence of Zhangjiajie Scenic Area and actively explore cloud tourism.
Light and shadow lighting with AR and other technologies empower traditional cultural tourism resources and adapt to the development of the night market economy. In 2022, Roman Co., Ltd. will launch a new night tour project "Lotus Wind Night Light" in Pujihei Scenic Area, integrating viewing, interaction, experience, performance, amusement and cultural communication. Pujihei Scenic Area "Lotus Wind Night Light" introduces the standard technology and equipment of international theme parks, integrates special effects such as sound, light, electricity, water, fog and other advanced technologies to create light and shadow art areas such as AR lotus appreciation "Lotus Pond Preliminary Exploration", AR Quiz "Xuanguang Poetry Array", AR group photo "Top of the Clouds", AR treasure exploration "Yaoshui Garden" and other light and shadow art areas.
Market space: China is expected to be 26.3 billion in 2026, CAGR 63% in 2022-26
China: According to the Ministry of Culture and Tourism, China's cultural and tourism expenditure in 2021 was 113.3 billion yuan, we expect the scale of China's cultural and tourism expenditure to remain stable as a proportion of China's overall GDP, and according to the GDP growth forecast by the Bank of China Research Institute, China's cultural and tourism expenditure may reach 146.4 billion yuan in 2026, with a CAGR of 5% in 22-26 years. In addition, we expect that the proportion of virtual reality + cultural tourism will continue to increase, from 2% in 2021 to 18% in 2026, corresponding to the estimated growth of China's virtual reality + cultural tourism market from 2.3 billion yuan in 2021 to 26.3 billion yuan in 2026, with a CAGR of 63% in 22-26.
Global: According to Market Data Forecast, the global virtual reality travel market will be worth approximately $5 billion in 2021 and could reach $24.1 billion by 2027. Under the epidemic, the application of virtual reality technology may meet people's tourism needs, and factors such as reduced travel costs and rich entertainment games have driven demand growth. According to Market Data Forecast data, we estimate that the global virtual reality + cultural tourism market size may reach $20 billion by 2026, with a CAGR of 32% in 22-26 years.
Virtual reality + business ideas
The gap between China and foreign countries in virtual shopping/virtual display is small, and overseas manufacturers such as Meta/Microsoft lead virtual reality office
According to the virtual reality plan of the Ministry of Industry and Information Technology, virtual reality + commercial trade refers to the implementation and promotion of a number of typical cases supported by virtual reality technology in the fields of smart home decoration, virtual house viewing, large-scale exhibitions, fashion creativity, video conferencing, remote office, smart business districts, takeaway retail, etc., and the development of a new model of online and offline synchronous interaction and organic integration of business and trade activities, and the creation of new business scenes and new businesses.
From the definition point of view, we believe that virtual reality + business trade mainly includes three categories: virtual shopping, virtual display and remote work.
Among them, virtual shopping mainly refers to the use of virtual reality technologies such as AR/VR to enhance the sense of presence and optimize the shopping process; Virtual display refers to the use of 3D models to visually introduce users to products, enhance brand influence, or understand the principles of product use; Remote work refers to the use of AR/VR headsets to create a virtual office environment and improve user interaction. From the comparison at home and abroad, we believe that the threshold for virtual shopping/virtual display is relatively low, the development is relatively faster, and the gap between domestic and foreign manufacturers in business models is not large; Remote office is developing rapidly under the leadership of Meta, Microsoft and other foreign manufacturers, overseas MR is the mainstay, users have virtual Avatar and integrate with the real environment, interactivity and immersion are stronger, while the domestic office field is dominated by AR.
#1: The participants of foreign virtual shopping/virtual display mainly include retailers, social platforms and brands
Retailers include traditional supermarkets as well as online shopping malls. In terms of traditional supermarkets, Ikea and Allegorithmic jointly launched the virtual reality app "Virtual Reality Kitchen" based on UE4 in 2016, and consumers can understand the effect of decoration in advance through VR technology before buying IKEA products. In terms of online supermarkets, global e-commerce platform eBay teamed up with Australian department store Myer to launch the world's first VR virtual reality department store using visual technology; Amazon has opened VR kiosks where shoppers can see a subset of items that can be purchased in Amazon's stores by wearing glasses, including refrigerator appliances, fashion matches, and even smart homes, children's toy themed rooms.
In terms of social platforms, including Snap, Roblox and other leading companies. Roblox as a leading virtual gaming platform, according to Roblox financial report, 3Q22 platform DAU reached 58.8 million, gathered a large number of highly active users, naturally became an important place for brand promotion, a large number of brands such as Vans, Gucci, Netflix, LOL Surprise Dolls, Lego, Buberry, Nike and Roblox have collaborated to create an immersive virtual brand space. Take Nikeland as an example, the virtual space is distributed with various Nike-themed buildings, arenas and runways, and users can use the virtual currency Robux to buy Nike clothing and dress up Avatar, which has become an important channel for Nike to promote in the virtual world. According to the AR Marketing Report jointly released by Snapchat and Ipsos, 70% of consumers believe that AR brings them happiness, and 80% of brands believe that AR has increased their awareness.
More and more overseas brands are beginning to explore sales in the field of virtual reality. According to Accenture's Annual Holiday Shopping Survey in 2022, 30% of users plan to buy goods in the virtual reality space; 67% of retail executives say they are trying to explore metaverse and virtual products and how these goods can benefit their original business. In the context of the rapid development of virtual reality, the shift of brand sales to virtual space has become a trend.
#2: The threshold for virtual shopping/virtual display is relatively low, and China has also achieved rapid development
Domestic retail giants also have a layout in the AR/VR field. Alibaba's Taobao platform launched the Buy+ feature in April 2016, allowing users to select the Buy+ tab by simply going to the "My" menu without downloading a new app. Taobao uses computer graphics technology and auxiliary sensors to generate interactive 3D shopping spaces, and at the same time works with merchants to build a 3D product library to enrich users' shopping experience. In May 2017, JD.com also launched the "Tiangong Plan" to continue to iterate AR/VR products and technologies, covering scenarios including AR try-on, 3D business, AR real shopping, AR marketing platform, VR panoramic shopping, VR watch and buy, etc., to continuously improve consumers' shopping experience.
In terms of domestic social platforms, mainly including Baidu Xiyang, brands have settled in and strengthened virtual reality marketing displays. Baidu announced at the AI Developers Conference on December 27, 2021 that is parallel to the physical world, and has become an important release platform for events, with a large number of brands entering the event. For example, on March 14, 2022, Lynk & Co and Baidu Xiyang launched the "Lynk & Co Paradise", in the design of the inner pass, 1:1 replica of Lynk & Co's online showroom, including 6 car series and 12 models, users can change the color of the car in the immersive virtual world, open the doors and trunk, and feel the interior interaction. In addition, Lenovo, BlueFocus, Max Mara, FAW Besturn and other brands have also settled in.
#3: Giants such as Microsoft/Meta lead MR office, and AR is the main in China
Since 2021, Meta, Microsoft and other large manufacturers have continued to increase their layout in the field of virtual reality office. At the 2021 Microsoft Ignite Conference, Microsoft CEO Satya Nadella announced that the company will officially enter the metaverse, and announced the MR office solution Mesh for Teams; VR conferencing software "Horizon Workrooms" since its launch in August 2021 has continued to upgrade the function, according to the 2022 Connect conference, Meta said that it will focus on building tools to improve office and collaboration in Meta Quest pro and Meta Quest 2, Horizon Workrooms will allow users to join through Zoom in the future, join breakout sessions and allow viewing 3D models, making office entrances more convenient. The functionality is also continuously improved.
In addition, the overseas MR office will support traditional productivity tools such as Microsoft Ofiice. At Connect 2022, Meta announced further cooperation with Microsoft in the office field. Microsoft CEO Satya Nadella said that Microsoft Teams immersive meeting experience is coming to the Quest platform. At the same time, Microsoft 365 will be available on Quest devices, allowing future users to use productivity tools such as Word, Excel, PowerPoint and Outlook directly through Quest hardware. In addition, both Meta Quest and Meta Portal will support Microsoft Intune and Azure Active Directory for enterprise security and management.
China mainly focuses on the field of AR collaborative office. In 2020, Xreal and Alibaba's smart mobile office platform DingTalk released the AR collaborative office product Dingtalk Work Space. Dingtalk Work Space is a digital parallel collaboration space based on technical capabilities such as AR, MR and DingTalk video conferencing, and users can enter a 3D virtual working environment combined with reality anytime, anywhere through Xreal AR glasses equipped with Dingtalk Work Space.
Market space: China is expected to be 11 billion in 2026, CAGR of 38% in 2022-26
We expect the size of China's virtual reality + business creative market to be 2 billion yuan in 2021 and 11 billion yuan in 2026, with a CAGR of 38% in 2022-26. Our calculation is based on: 1) Referring to Questmobile data, we estimate that China's Internet advertising scale will be 977.9 billion yuan in 2026, and e-commerce advertising will account for 42% (refer to iResearch), then China's e-commerce advertising scale will be 410.7 billion yuan in 2026, and we expect that the penetration rate of virtual reality will increase from 0.6% in 2021 to 2.4% in 2026, then China's virtual shopping + virtual display market space will be 9.9 billion yuan in 2026; 2) China Research Network expects that China's OA intelligent collaboration market space will increase from 25 billion yuan in 2021 to 45.7 billion yuan in 2026, thanks to the development of virtual reality technology, we expect the penetration rate of virtual reality + remote office to increase from 1.2% in 2021 to 2.5% in 2026.
We expect the global virtual reality + business creative market to be worth $3 billion in 2021 and reach $10.9 billion in 2026, with a CAGR of 26% in 2022-26; The overseas virtual reality + business creative market size will be US$2.7 billion in 2021, reaching US$9.4 billion in 2026, with a CAGR of 25% in 2022-26; In 2026, China's virtual reality + business creativity accounted for 14.4% of the world. Our calculations are based on: 1) we estimate that the global e-commerce GMV will be 8,056.2 billion US dollars in 2026 (eMaketer expects 7,391 billion US dollars in 2025), and the penetration rate of e-commerce advertising/GMV and virtual reality for e-commerce advertising in 2026 will be 5.0% and 2.3%, respectively, so the global virtual shopping + virtual display market space will be 9.3 billion US dollars in 2026; 2) Global Market Insights expects the global smart office market to increase from $33.5 billion in 2020 to $59.6 billion in 2025, and we expect it to reach $63.3 billion in 2026, while the penetration rate of virtual reality office will increase from 1.4% in 2021 to 2.7% in 2026, corresponding to $1.7 billion in global virtual reality + remote office space in 2026.
Virtual reality + sports health
The new generation of domestic T murder two o murder only 0
According to the virtual reality action plan of the Ministry of Industry and Information Technology, virtual reality is also widely used in the development needs of "big sports and big health". Including sporting goods, sports facilities, fitness software and platforms, it meets the diverse needs of sports in different scenarios and environments, and is also expected to provide virtual digital, immersive, and intelligent new sports solutions. On the other hand, virtual reality is also expected to achieve a wide range of applications in medical health scenarios, including medical education, clinical diagnosis and treatment, rehabilitation nursing, addiction withdrawal, psychological counseling, care visits, surgical navigation and other scenarios.
Matsuji sports field
The new generation of Pancake optical path products has been launched, and the leading domestic VR companies represented by PICO have accelerated the application of VR technology in the field of user sports. The PICO 4 is powered by a Qualcomm Snapdragon XR2 chip and 8GB of RAM, providing about three hours of battery life. By using Pancake optics, the weight of the measured front end is reduced by 28.8% and the thickness is reduced by 24% compared to the PICO 3 measured front. PICO held overseas and Chinese launches on 9/22/22 and September 27, respectively, both of which increased its presence in areas such as fitness. Domestic launch: "Super Burning Moment" is an S-level fitness masterpiece integrating personal training courses and yoga, with more than 500 minutes of fitness courses, and will also cooperate with super gorillas to create private training classes; Launch of Calsense fitness tests; Launched the app "Shining Spirit", with 150+ officially licensed music, and can also cooperate with the experience tracker to achieve multi-body motion capture.
Overseas: PICO launched "Lemmy Combat Exercises", exclusively launched "Just Dance VR", etc., and cooperated with Pamela to develop courses, removable foam pads can significantly improve comfort, PICO Fitness can also be compatible with Apple mobile phones to record fitness data. PICO launches motion tracking tracker, which can be tied to arms or legs to achieve multi-joint, multi-limb motion capture, 3DoF motion tracking for millisecond response time, 100Hz high-frequency capture and 0.5° accurate positioning.
At present, the development of the domestic virtual reality + sports field has a certain foundation, but it still faces some shortcomings: 1) insufficient supply of high-quality content and lack of applications with industry influence; 2) The comfort and safety of virtual reality equipment terminals are still insufficient; 3) The public does not understand the concept of virtual reality technology enough. Relying on the guidance of policies and other policies, the cultivation of fitness and exercise virtual reality products with the theme of "sports power" is expected to be accelerated; The continuous upgrading and development of hardware terminals is also expected to optimize the user's terminal experience, and the landing of policy-guided virtual reality sports health promotion activities is also expected to drive more users to strengthen the concept of virtual reality + sports, thereby expanding the user group.
#2 Health field
Applications of virtual reality in the health sector include robotic surgery, mental health and psychotherapy, pain management, and physical therapy. Virtual reality environments can stimulate cravings and physiological responses, and affect emotional states, attention, cognition, and brain activity. The idea of using VR technology for mental health treatment dates back to the mid-1990s, and recent advances in VR headsets and reduced costs have made them more feasible and accessible, while research on VR-assisted therapy has become more popular and mature. The most established use of VR-assisted therapy is to treat anxiety disorders.
At present, the more mature virtual reality psychological treatment method is virtual reality exposure therapy, also known as VRET (Virtual Reality Exposure Therapy). It is a psychotherapeutic method that combines specific stress scenarios of virtual reality with exposure therapy, a transformational form of traditional behavioral therapy, and an alternative form of treatment to classic real-world exposure therapy. Virtual reality integrates real-time computer graphics, body sensory sensing, and visual imaging technology to provide visitors with a near-real, immersive and interactive virtual environment.
Market space: China is expected to be 17.4 billion in 2026, CAGR 44% in 2022-26
China: According to Frost & Sullivan and China Insights Consulting, the size of China's sports and fitness market will reach 1,479.3 billion yuan in 2026, with a CAGR of 13% for 22-26E, and we expect the proportion of virtual reality to increase from 0.2% to 0.7%, corresponding to a virtual reality + sports fitness scale of 16/10.4 billion yuan in 2021/26; On the health front, Research and Markets predicts that the global virtual reality healthcare market will be worth about $2.7 billion in 2022 and about $9.8 billion in 2027, and we expect growth to slow down to $8 billion in 2026, given the maturation of the industry. Considering the support of policies and other support, we expect that China's virtual reality + healthcare market will increase from about 10% in 2021 to 12.5% in 2026, corresponding to the market size of China's virtual reality + health field in 2021/26 of about 13/7 billion yuan. In summary, we expect that the market size of China's virtual reality + sports and health applications will reach 17.4 billion yuan by 2026, corresponding to a CAGR of 44% in 22-26 years.
Global: In sports, according to BlueWeave Consulting, the global virtual reality sports fitness market will reach $59.6 billion in 2027, with a 22-27E CAGR of 33. 1%, people's fitness awareness is increasing, while there is not enough time to participate in physical classes for fitness, virtual fitness may be more and more accepted, we expect the global virtual reality sports fitness market to reach $49.4 billion by 2026. In health, according to Research and Markets data and our forecasts, the global virtual reality market in the health sector will be worth about $8 billion by 2026. In summary, we expect the global virtual reality + sports health market to reach $57.4 billion by 2026.
Virtual reality + safety emergency
Simulation training, immersive virtual exercises, and deeper overseas layout at the practical level
According to the virtual reality plan of the Ministry of Industry and Information Technology, the virtual reality + safety emergency pointer carries out immersive virtual drills for scenarios such as mine safety, hazardous chemical safety, and natural disaster prevention and control, so as to realize the transformation of safety emergency drills from "equipment and facilities as the center" to "user experience as the center". Promote the informatization innovation construction of smart policing and emergency management, explore augmented reality intelligent individual soldier systems, and realize the integrated linkage of all elements of security comprehensive information.
We believe that virtual reality + safety emergency mainly includes two categories: training and practical operation. Among them, training mainly refers to the use of virtual reality technology such as AR/VR to carry out immersive virtual drills for scenarios such as high-risk industry safety, high-cost consumption industries, and natural disaster prevention and control. Practical operation refers to the use of virtual reality technologies such as AR/VR to promote the information innovation construction of smart policing and emergency management for police security scenarios, and realize the integrated linkage of all elements of security comprehensive information.
#1: In terms of simulation training, the layout scenarios at home and abroad are similar
1) Safety in high-risk industries, with layouts at home and abroad in firefighting, coal mines, electric power, transportation, construction sites, water conservancy, nuclear power and other scenarios. Overseas, the representative companies include AK Preparedness, an American emergency preparedness and life safety company, whose "SafetyNetVR" VR fire drill solution has been applied to real estate investment management company CommonWealth Partners. Domestically, the representative companies are Zhongshidian and Manheng Digital. According to the official website of China Vision Classic, according to different application scenarios, the emergency plan deduction training system of China Vision Dian is divided into virtual emergency training system for public health emergencies, petroleum and petrochemical virtual emergency drill training system, electric power virtual emergency drill training system, mining emergency drill system, earthquake emergency rescue disposal simulation exercise system and other sub-products, which have provided solutions for Seismological Bureau, CNOOC, Pinggao Group, Shenhua Group, etc.; According to the official website of Manheng Digital, Manheng Digital has joined hands with Shanghai Airport Group to create a virtual reality fire emergency rescue system, using virtual reality and 5G cloud rendering technology to simulate fire emergency rescue.
2) High-cost consumption industries, such as petrochemical and other hazardous chemical safety. Abroad, representative applications include the OPS-PLUS application of Dartmouth Medical School, which helps students deal with various terrorist hazards such as chemical and biological in a realistic environment, and improves the emergency response ability of individual and team safety; In China, the representative application of Hangzhou Virtual Present Technology's VR chemical safety training system, which can realize chemical safety hazard investigation, chemical safety accident experience, emergency simulation drills, information entry scoring assessment, etc., has been used in China Crude Oil Field.
3) Natural disaster prevention and control, such as disaster relief and improving the disaster handling capacity of commanders. Overseas, representative applications include the Advanced Disaster Management Simulator (ADMS) of the New York Emergency Management Office, which integrates artificial intelligence to build a virtual replica system of New York's city, in which commanders can guide citizens to respond through real-time communication; Domestically, the representative applies Anhui Peijing's VR natural disaster emergency escape experience system, which can simulate a variety of common natural disaster scenarios such as earthquakes, typhoons, and mudslides, so as to learn self-rescue knowledge in real and objective disaster scenarios.
#2: Foreign procurement efforts in practical areas are greater
Hololens 2 cooperates with the military, and the purchase amount is large, and it is used in real combat. According to Yingwei.com, in 2021, the US Army signed a contract with Microsoft for up to 10 years with a value of up to $21.88 billion, agreeing to provide about 120,000 IVAS headsets (Integrated Visual System, military version HoloLens) for the US military. According to Yingwei.com, the United States purchased 26,304 IVAS units in fiscal 2021, with a procurement amount of US$670 million; Purchased 29,237 IVAS units in fiscal 2022 for $854 million. In November 2021, according to Yingwei.com, U.S. Army experimental soldiers wore an integrated visual enhancement system IVAS based on Microsoft's HoloLens to perform UH-60 Black Hawk helicopter missions; The U.S. Army has now approved the next phase of operational testing of the IVAS system in May 2022.
Some domestic enterprises cooperate with the police. Representative cases include Liangfeng Tai and Yunnan Airport Public Security to build the "Cloud Eye Intelligence Joint Operation System" to assist public security in realizing intelligent and efficient personnel verification, command and scheduling, control coordination, employee management, etc., and building a new format of smart airport security; XIMMERSE'S MR STANDARDIZED LAW ENFORCEMENT POLICE PRACTICAL COMBAT TRAINING SYSTEM, SUPERIMPOSING VARIOUS VIRTUAL POLICE SITUATIONS IN THE REAL ENVIRONMENT, IMPROVES THE STANDARDIZED LAW ENFORCEMENT CAPABILITIES OF POLICE OFFICERS AND THE HANDLING LEVEL OF THE SMALLEST COMBAT UNIT THROUGH SIMULATED CONFRONTATION TRAINING, AND CURRENTLY HAS TRAINING BASES IN THE Guangdong police academy and other fields.
Market space: China is expected to be 11.8 billion in 2026, CAGR 46% in 2022-26
We estimate that China's virtual reality + security emergency scale will be 1.8 billion yuan in 2021, and it is expected to reach 11.8 billion yuan in 2026, with a CAGR of 46% in 2022-26. Our calculations are based on: 1) the Prospective Industry Research Institute's forecast that the scale of China's emergency industry will increase from 1.6 trillion yuan in 2019 to 3.7 trillion yuan in 2026; 2) We expect the penetration of virtual reality in China's emergency industry to continue to increase, from 0.09% in 2021 to 0.32% in 2026.
We estimate the global virtual reality + security emergency scale of $4.1 billion in 2021 and is expected to reach $10.6 billion in 2026, with a CAGR of 21% in 2022-26; Overseas virtual reality + safe emergency space will be $3.8 billion in 2021, and is expected to reach $8.9 billion in 2026, with a CAGR of 18% in 2022-26; In 2026, the global market share of virtual reality + security emergency in China will reach 16.0%. Our calculation is based on: 1) According to the National Bureau of Statistics, China's nominal GDP in 2021 is 114 trillion yuan, and the GDP growth rate in 2022-26 adopts the forecast value of the Bank of China Research Institute, then the proportion of emergency industry/nominal GDP will increase from 1.7% in 2021 to 2.5% in 2026, and we estimate that the global emergency industry will increase from $1.70 trillion in 2021 to 3 in 2026. $12 trillion; 2) Virtual reality increased its share of spending in the global emergency industry from 0.24% in 2021 to 0.34% in 2026.
Virtual reality + entertainment for performing arts
Offline entertainment performances enhance digital experience and build a normalized virtual reality online performance
According to the Ministry of Industry and Information Technology's Virtual Reality Application Integration Action Plan, virtual reality can help online broadcasts by creating a "super scene" that integrates virtual and real reality. By building a normalized virtual reality online broadcast environment, virtual reality technology can support online performances of high-quality resources such as stage arts, variety shows, and intangible cultural heritage, explore new ways of interaction between audiences and performance areas and native online performance content suitable for online viewing, encourage literary and art troupes, literary and artistic workers, and inheritors of intangible cultural heritage to carry out immersive performances on virtual reality platforms, and cultivate a number of native online performance products that meet the needs of immersive entertainment and are suitable for online viewing, dissemination and consumption. On the other hand, promoting the application of virtual reality in the entertainment industry can improve the digital level and experience of offline entertainment.
The domestic virtual performance platform is online, and VR and XR technology bring users an immersive experience. On March 8, 2021, iQIYI officially released a new content product, "Cloud Performance", which is the first "immersive virtual" online performance content product in China. As the first content of the "cloud performance", the THE9 Virtual City immersive virtual concert is presented using XR technology to realize various forms such as stage, virtual audience seats, and real-time interaction, bringing users an immersive experience. In December 2021, TME launched TMELAND, the first virtual music carnival in China, where users can not only create their own avatars on TMELAND, but also experience virtual concerts and live broadcasts in an immersive way. In December 2022, the metaverse space "Dynamic Zone Constellation" created by China Mobile Migu · M" was officially launched, creating the first VR all-cloud interactive space through cloud-based technology innovation, enabling new scenarios of XR "sports + entertainment" consumption.
The development of overseas virtual performances is relatively mature, and mainstream service providers began to hold virtual performance activities earlier. Cluster, the head listed company of Japanese virtual performances, was founded in 2015, mainly providing users with virtual event services for multi-person gatherings in VR space, and the activities that have been landed include virtual idol large-scale VR concerts, fan meetings, miscellaneous talks, birthday parties, lectures, New Year's Eve bell ringing activities, etc. At the end of March 2021, Cluster had implemented technology that could simultaneously accommodate 100,000 people watching a show in a virtual space. According to Wave's official website, by the end of 2020, Wave had held more than 50 live events, attracting millions of users around the world. Artists who perform virtually through Wave include electronic artists Tinashe, REZZ and Lindsey Stirling, and Wave has also performed by bands and singers such as The Weeknd, John Legend, Wilco, Foo Fighters or Cage the Elephant.
VR technology has been used to bring drama online at home and abroad, bringing audiences an immersive viewing experience. Abroad, since 1992, the University of Kansas has established a virtual reality theater art research institute called i.e.VR, and launched The Adding Machine, Wings, Tesla Electric and Machinal three experimental plays with hybrid VR technology. Domestically, Guangzhou Opera House has created a "5G Smart Theater", a multi-perspective 4K+VR ballet "Don Quixote" for 5G live performances, as well as acrobatic dramas such as "Butterfly" and ballet "Swan Lake", which bring the audience an independent and immersive viewing experience through TV, mobile phone and VR three screens, realizing the multiple values of "cloud performing arts" innovative stage art expression and audience interactive viewing methods. In August this year, "Sleepless Nights" began an experimental exploration of immersive live broadcasting, using 5G high-definition and multi-view real-time transmission technology to create a "fanwai" version that continues the theatrical dream for audiences.
Virtual reality technology is combined with live performances to enrich interactive forms and bring immersive interactive virtual entertainment experience to the audience. Abroad, Katy Perry sang the new single "Daisies" on the American idol show, applying XR technology to TV production for the first time, enabling interaction with virtual elements such as a pair of giant hands and a large number of floating daisies. Domestically, Fengshang Culture uses Unreal Engine and real-time rendering technology to carry out AR creative design and production of offline performing arts projects, such as the virtual performance "Night of Light Gathering" cooperated with the Winter Olympics Organizing Committee in January this year, which not only realized the interaction of second- and third-dimensional artists with space, but also used XR to produce bullet time effects, bringing film and television texture to visual presentation with technology, and strongly empowering the performance effect. Seyu Technology, in which Jebsen is a shareholder, cooperated with CCTV, Hunan Satellite TV and other well-known TV stations to create AR programs such as "2021 CCTV Spring Festival Gala "Cow Up" using virtual synthesis technology, realizing the effect of Andy Lau, Wang Yibo and Guan Xiaotong interacting on the same stage.
Market space: China is expected to be 7.8 billion in 2026, CAGR 36% in 2022-26
China: According to the China Performance Association, the size of China's performance market in 2021 was 33.6 billion yuan, and we expect the space of China's virtual reality + entertainment market to be 7.8 billion yuan in 2026, with a CAGR of 36% in 2022-26. Based on assumptions: 1) the scale of China's performance market returns to growth; 2) The proportion of virtual reality + performing arts entertainment continues to increase, and is expected to increase to 12% by 2026.
Global: According to Statista's forecast, global revenue from all types of live performances is expected to reach $74.9 billion in 2022 and is expected to reach $93.7 billion in 2024. We expect the global virtual reality + entertainment market to be worth $13.5 billion in 2026, with a CAGR of 55% for 2022-26. Based on assumptions: 1) global revenue from all types of live performances will continue to grow from 2025 to 2026; 2) The global penetration rate of virtual reality + performing arts and entertainment has steadily increased, and China is consistent with the world.
Virtual reality + smart city
With rapid development led by policies, South Korea may provide guidance for domestic development paths
According to the virtual reality plan of the Ministry of Industry and Information Technology, virtual reality + city refers to exploring the integrated application of virtual reality in urban governance to form urban visual management solutions. Promote the application of life assistant based on user location service (LBS) and high-precision visual positioning service (VPS), and support centimeter-level spatial computing and large-scale real-time user interaction in multiple scenarios. Improve digital space operation service capabilities, explore indoor and outdoor real-world 3D commercial construction models, and create efficient and convenient personalized smart life information services that integrate virtual and real for scenarios such as transportation, catering and shopping, entertainment and leisure.
We believe that from digital twins to virtual reality, virtual reality is the next direction of urban construction. A digital twin is a digital model or copy of a physical asset of an entire city, giving the physical city a digital clone with a 1:1 mapping to digitize, virtualize, and visualize all states. From a city management perspective, a digital twin of the entire city can effectively assist in urban planning and the operation and maintenance of physical assets. Looking forward to the future, the iterative upgrade of VR/AR technology is expected to promote the ultimate form of virtual and real coexistence in urban digital construction. On the basis of digital twin, virtual and real cogeneration emphasizes the interaction effect of multiple subjects, so that the original virtual platform not only provides visualization capabilities, but also realizes the comprehensive connection and high collaboration between virtual and reality. We believe that virtual reality + smart city is still in the exploration stage, but the overseas realization path is more clear; With the successive entry of the government in China, it is expected to achieve rapid development. At the same time, in the development of virtual reality + smart city, the government's attitude, policy line, and support are crucial, and it is recommended to pay attention to the introduction of follow-up policy rules.
# 1: The realization path of virtual reality + smart city in overseas (South Korea) is clearer, or it provides guidance for domestic development
In November 21, the Seoul government (SMG) of South Korea released the "Metaverse Seoul Five-Year Plan", announcing that a total of 20 projects in 7 major fields of economy, education, tourism, communication, city, administration and infrastructure will be fully rolled out, with a total investment plan 3.9 billion won, corresponding to approximately 20.78 million RMB. In the planning, Seoul's metaverse ecology is mainly divided into three phases: introduction (2022), expansion (2023-2024), and settlement (2025-2026). The first phase of Seoul will build a high-performance platform called Metaverse Seoul and provide services in areas such as economy, education, and tourism. According to SMG's official website, the Seoul Metropolitan Government opened the "Metaverse Seoul City Hall" to the public as an experimental service in May 2022, and after the private trial operation of Metaverse Seoul in August, the first phase of the metaverse project has been basically completed in 2022. In the future, the Seoul Metropolitan Government will also expand the application of the metaverse platform to all areas of municipal management to improve the efficiency of government officials.
1) Economy
On the economic front, SMG will make full use of the metaverse to nurture the industrial ecosystem. SMG will rebuild the Seoul Fintech Lab on the metaverse platform and build a fintech cluster that integrates online and offline, aiming to become Asia's leading fintech city. In the Seoul FinTech Lab, SMG will issue relevant support policies, increase the introduction of enterprises, help the construction of private cooperation mechanisms, and provide enterprises with industry data support, expert consultation and other services. In addition, SMG will set up "Invest Seoul" for foreign investors to provide them with information on investment/entrepreneurship trends in Seoul, foreign investment incentives and other information, and will also provide one-stop XR business services for foreign investors through virtual avatars in the metaverse to improve Seoul's investment promotion ecosystem. At the same time, SMG will launch "Campus Town" on the metaverse platform, which provides channels for creators to communicate and exchange with each other, and related entrepreneurial training will also be held in the metaverse to continue to empower creators. In addition, SMG will also launch a digital content production platform in the metaverse to promote the development of the industry through online and offline integration through cooperation with relevant metaverse companies.
2) Education
According to SMG's official website, education is one of the larger application areas of the metaverse. First of all, SMG will develop immersive digital content based on metaverse technology, provide students with diversified courses, and cope with the increasing demand for professional competencies in the future, while learning in the metaverse is more interactive, so that participants can fully communicate and communicate with each other to achieve two-way transfer of knowledge. In addition, SMG will launch a youth guidance center in the metaverse, where teenagers can freely consult experts, including learning, career, friendship, school violence and other topics can be answered, so as to break the limitations of time and space, create a free and stable learning environment, and reduce the impact of negative factors on teenagers. Ultimately, SMG will also launch Seoul Open City University in the metaverse, aiming to cultivate citizens' lifelong learning habits and transform them into knowledge producers through models such as "citizen lecture halls" to form new value, and the virtual university will also provide citizens with high-quality lectures to improve the city's humanities.
3) Tourism
In terms of tourism, the metaverse can break the boundaries of time and space for technical marketing and enhance Seoul's cultural competitiveness around the world. First of all, Seoul will adopt the model of online experience promotion + offline actual consumption. According to SMG's official website, famous attractions such as Gwanghwamun Square, Deoksugung Palace and Namdaemun Market will be built on the platform's virtual tourism zone, damaged buildings such as Dunguimun will also be reshaped in the virtual space, and tourists can take tour buses to tour the metaverse attractions, online and offline, and promote tourists to actually visit Seoul after the virtual experience.
SMG said that traditional festivals in South Korea will also be held in the metaverse platform. In the future, citizens can say goodbye to the flat visual experience on Zoom and Youtube, and can truly participate in the virtual space of the metaverse, and traditional festivals such as the Seoul Drum Festival will be launched on the platform one after another, reducing the actual impact of the epidemic on citizens' lives.
In the future, SMG will continue to increase the amount and realism of travel content, so that users can enjoy the scenery without actually visiting. In the metaverse era, SMG will continue to improve the quality and realism of content, and SMG also plans to map real-world museums and art galleries online to continue to enrich the tourism content ecology, so that users can experience Seoul's virtual exhibition facilities anytime, anywhere without visiting in person.
4) Communication
In the future, SMG will integrate complaints and inquiries into the Metaverse 120 Center. SMG said that it will launch the Metaverse 120 Center in 2023, and in the future, AI-intelligent civil servants will be able to issue civil documents on the spot, accept and classify civil lawsuits, and make it easier for citizens to enjoy services such as booking processing and information consultation. In addition, SMG will also launch the Seoul Citizen Platform based on the metaverse's virtual space and software technology, where citizens and businesses can freely create, such as holding personal exhibitions and opening stores. SMG expects that with the development of the ecosystem, new professions such as map creators, visual designers, and content creators will be born in the future, and the platform ecology will continue to be enriched.
SMG will also launch the virtual mayor's office as an important channel for cities to communicate with citizens. According to SMG's official website, a virtual mayor's office will be created in the metaverse in the future, and the area will be open to citizens and provide citizens with announcements related to major policies in Seoul as an important channel for connecting and communicating with citizens.
5) City
SMG will build a digital city based on XR technology combined with virtual reality. Based on new technologies such as digital twins, AI, and XR, SMG will connect the real world and the virtual world to construct an immersive experience. Specifically, SMG will develop XR spatial maps and high-precision maps of cities through public-private partnerships to lay the foundation for the production of XR content such as culture, tourism, and route guidance, while SMG will also experience the feeling of time travel using technologies such as cultural heritage restoration. In addition, SMG will develop XR content and services for the visually and hearing-impaired, facilitating their living environment through technologies such as image recognition and voice output.
In the future, SMG will expand XR-based smart city management. SMG said that in the future, smart devices will be used to check and manage the safety measures of the streets in real time, and at the same time, it will also realize smart city control through sensors, such as using new technologies such as AI, communications, XR, and establishing a city management system through IoT systems.
6) Administration
Use metaverse technology to build an advanced meeting environment. SMG said that from 2021, it will pilot metaverse conferences in the form of public-private partnerships, and then enhance independence, expand scenes to hearings, forums, etc., realize the sharing of specific content such as 3D objects and 360-degree VR sound, adapt to both mobile and PC terminals on the terminal, improve ease of use, and realize real-time interpretation and translation functions for international conferences in the future.
Actively use AI and XR technology to simplify office processes and improve efficiency. SMG said that in the future, AI civil servants will handle simple and repetitive tasks to improve administrative efficiency, while real-world employees will focus on citizen services and drive innovation in work styles. At the same time, SMG will also build intelligent offices based on advanced technologies, and users can use VDI technology to achieve remote management, making virtual and real communication and collaboration smoother, and information resource allocation more reasonable.
SMG will also provide big data services to the public and private sectors. SMG will continue to launch search and application services based on metaverse big data, enabling citizens to intuitively use and share receipts, including population, economy, environment and other fields, and will introduce AI technology to improve the convenience of data extraction in the future.
7) Infrastructure
In terms of infrastructure, SMG will launch the first metaverse platform built by the municipality, which will be divided into three phases (2022: introduction period; 2023-24: Expansion period; 2025-26: Layout period) for construction. The Metaverse Seoul Metaverse Platform will become an important part of the Seoul Metaverse ecosystem, a carrier for economic, tourism, education and other activities, providing public services that can break the boundaries of time and space and cross language barriers, and will expand to the field of administrative work to improve the efficiency of public servants. SMG has preliminarily completed the construction of the metaverse platform in 2022.
SMG will also launch a guiding policy based on the Seoul metaverse. In order to prevent the abuse of the Seoul Metaverse, SMG will also establish corresponding guiding policies, through the detection and analysis of the metaverse, will block specific words and actions, and guide and establish a healthy and safe code of conduct for citizens.
# 2: Support policies from central and local governments have been introduced. With the central government's attitude towards the metaverse gradually becoming clear, local governments have also issued support policies since 2021 to encourage the development of virtual reality + urban metaverse. For example, on July 8, 2022, the Shanghai Municipal People's Government issued the "Shanghai Action Plan for Cultivating a New Track of the "Metaverse" (2022-2025)", which describes the relevant description of smart cities: "In terms of urban governance, establish urban digital sand tables, strengthen risk early warning and emergency management levels"; The Action Plan for the Integrated Development of Virtual Reality and Industry Applications (2022-2026) released in November 2022 pointed out that the integrated application of virtual reality in urban governance will be explored to form urban visual management solutions; In December 2022, the Zhejiang Metaverse Industry Development Action Plan (2023-2025) pointed out that it is necessary to strengthen the role of the metaverse in empowering and enhancing the urban brain, and build a digital twin city with comprehensive connection and high synergy between virtual space and the real world.
# 3: China's virtual reality + smart city multi-scene landing is quickly implemented
Domestic enterprises continue to use emerging technologies such as augmented reality, artificial intelligence, and the Internet of Things, combined with smart city industry application scenarios, independently develop industrial platforms, and empower the digital construction of cities:
1) Intelligent transportation: According to the official website of Liangfengtai, in 2020, Liangfeng Tai launched the product research and development of the smart high-speed platform, creating a "Zhaotong high-speed intelligent platform" for Zhaotong and helping the construction of "digital Zhaotong".
2) Smart port: According to the official website of Liangliang Vision, Liangliang Vision cooperated with Dalian Port to launch a smart port solution based on smart glasses to improve the overall operation efficiency and safety service level of the port.
3) Smart government affairs: According to the official website of iFLYTEK, the virtual human interaction platform released by iFLYTEK makes the construction of digital government more affinity, and at the same time launches a 2×4/7 government service "without closing"; According to the official website of Fengyuzhu, in January 2022, Fengyuzhu and Shanghai Fengxian New City Construction and Development Company signed a metaverse pilot strategic cooperation agreement, and the two parties plan to build the new cultural landmark "Nine Trees Future Art Center" in Fengxian District into the metaverse city hall of Fengxian New City in Baidu Xilang Metaverse Platform.
4) Smart community: According to the official website of iFLYTEK, iFLYTEK provides smart community solutions applied to various scenarios based on AI technology, including: smart buildings, community security, smart elderly care, smart hospitals, property management and other smart community overall solutions; Access control gates, large-screen monitoring, voice elevators, AR fitness and other community supporting equipment; Smart home solutions such as smart kitchens, voice panels, home robots, and fresh air systems.
5) Smart airport: According to the official website of Liangfengtai, Liangfeng Tai and Yunnan Airport jointly launched the "Cloud Eye Intelligence Joint Operation System" to create a multi-directional, multi-dimensional and three-dimensional deep-level perception and early warning defense line, and build a new format of smart airport security.
Market space: China is expected to be 13.1 billion in 2026, CAGR 51% in 2022-26
We expect China's virtual reality + smart city market to be 1.7 billion yuan in 2021 and 13.1 billion yuan in 2026, with a CAGR of 51% in 2022-26. Our calculations are based on: 1) IDC expects spending in China's smart city market to increase from $30.2 billion in 2021 to $38.9 billion in 2023, and we expect relatively stable growth in 2024-26 to reach $54 billion in 2026; 2) We expect virtual reality to increase the share of spending in smart cities from 0.8% in 2021 to 3.5% in 2026.
We expect the global virtual reality + smart city market to be worth $2.7 billion in 2021 and $12.7 billion in 2026, with a CAGR of 37% in 2022-26; The scale of overseas virtual reality + smart city will be 2.4 billion US dollars in 2021, and it is expected to reach 10.8 billion US dollars in 2026, with a CAGR of 35% in 2022-26; In 2026, China's virtual reality + smart city global market share will reach 14.9%. Our calculations are based on: 1) China's smart city expenditure as a percentage of nominal GDP increased from 0.18% in 2021 to 0.25% in 2026, which we believe applies to the global world, referring to IMF forecasts, the global smart city scale will increase from US$178.3 billion in 2021 to US$316.9 billion in 2026; 2) Virtual reality increased its share of spending in global smart cities from 1.5% in 2021 to 4.0% in 2026.
Virtual reality + disability assistance
The application of disability assistance currently focuses on audiovisual impairment assistance and sports rehabilitation, and started overseas earlier
According to the Virtual Reality Technology Action Plan, virtual reality technology is expected to be applied in scenarios such as users' travel assistance, skill training, spiritual care, cultural tourism and leisure, social communication, education and employment, and life and shopping, so as to empower vulnerable people with disabilities. Encourage the promotion of a number of virtual reality devices adapted to vulnerable people with disabilities to help the construction of "information barrier-free" services. At present, the application of virtual reality in the field of disability assistance at home and abroad is mainly concentrated in the field of audiovisual impairment assistance and sports rehabilitation assistance, which started early overseas and continued to follow up in China.
1) Audiovisual impairment assistance
Virtual reality technology and its application can solve the problem of low vision in visually impaired people. According to the WHO, more than 250 million people worldwide are visually impaired, and VR technology is being used to help many of them.
Overseas manufacturers have realized the application of virtual reality technology in the fields of presbyopia, low vision and other solutions. In 2019, Stanford University published a paper on "Autofocals" about eye movement tracking and autofocus on whatever the user is viewing. Autofocals can help solve presbyopia. Compared to inflexible but inexpensive bifocals and progressive lenses, these VR glasses can automatically focus without manual adjustment. Autofocals is filled with fluids that expand and contract with the changing point of view and integrates eye tracking sensors. With lenses and trackers in place, the researchers also developed software that can extract eye-tracking data to ensure that the glasses are available to the user
For the right focus. In 2020, British AR hardware manufacturer GiveVision invented a device called SightPlus, which aims to restore vision to people whose vision has deteriorated beyond repair by projecting real-world video onto the working area of the retina. According to a clinical trial conducted at Moorfields Moorfield Eye Hospital, nearly 70 percent of users of SightPlus prototype devices reported that their vision improved to 0.2logMAR or higher, close to normal vision levels. The company is currently working with Sony (UK Technical Center) to develop next-generation products.
In China, virtual reality technology has also been applied at the enterprise and hospital level. The AR headset developed by AR/VR optical module company Nedjia can greatly improve the wearer's vision, and according to individual differences, it can improve the level of 4-10 rows of eye charts, and even reach the level of literacy in the legal sense. At present, domestic manufacturers such as Nedja have served a number of customers with low vision products at home and abroad. Acesight AR visual aid of Nedgar Optical Solutions, augmented reality technology + AI intelligent algorithm distinguishes the images of nearby objects to achieve the effect of reconstructing the patient's vision. According to the symptoms of different visually impaired patients, such as macular degeneration, glaucoma, diabetic retinopathy, retinitis pigmentosa, staggat eye disease, etc., the pattern is adjusted in a targeted manner, highlighting the most critical images, and quickly improving near and far vision.
Different from the traditional boring and monotonous visual training methods, with the intervention of multimedia technology and intelligent equipment, visual function training has been greatly improved in terms of interest and comprehensiveness. In October 2022, the Shanghai Eye Disease Prevention and Treatment Center (Shanghai Eye Hospital) announced the availability of VR devices for patients to perform visual function tests and vision training programs.
The leading domestic AR manufacturers focused their new AR glasses on the hearing-impaired, and released the industry's first mass-produced AR captioned glasses - Hearer in September 2022. Listener is the world's first binocular waveguide wireless all-in-one AR glasses weighing less than 80g, which has a high transparency display effect and instant speech transcription ability, which can help the hearing-impaired people, the elderly with hearing loss and cross-border communication people remove communication barriers. In terms of structure, the listener adopts the self-developed "octahedral" array optical waveguide module, which has good performance in terms of eye brightness, light transmittance, light leakage control, etc., to ensure that users can see the subtitle clearly and the environment clearly.
2) Sports rehabilitation assistance
Virtual reality technology is expected to be used to help patients with hemiplegia regain lower limb tactile and muscle control, and exoskeleton robots based on brain-computer interface technology restore the motor skills of paraplegic patients. According to the official website of Xuanwu Hospital of Capital Medical University, the "Walk again project" (WAP) restores the motor function of paraplegic patients through revolutionary brain-computer interface technology, benefiting the majority of spinal cord injury patients and more patients with motor dysfunction, is a non-profit international research consortium, and 150 scientists from nearly 20 research centers around the world have joined the Walk Regain Program. In 2019, Xuanwu Hospital of Capital Medical University and the Clinical Translational Research Center of Brain-like Intelligence of China International Institute of Neuroscience obtained exclusive authorization for the WAP project, becoming the only WAP center in Asia. The application of virtual reality technology is expected to help patients who have not or never felt autonomous walking for a long time to re-learn the concept of walking, and then cooperate with customized exoskeleton mechanical prosthesis, connected to the helmet to obtain brain signals for walking.
Motor function therapy requires repeated training and the achievement of certain training tasks to produce results, virtual reality related technology is used in related therapy and rehabilitation training scenarios to improve patients' interest and enthusiasm in training. Repeated rehabilitation exercises play a very important role in the exercise of the cerebral cortex, but repeated rehabilitation does not produce exercise rehabilitation. Repetitive rehabilitation training must complete a series of specific tasks to have a certain effect on sports rehabilitation. The Fraunhofer Institute in Berlin, Germany, has developed the Haptic Walker robot system, which integrates virtual reality technology to combine walking rehabilitation training with real scenes on the basis of this technology to improve patients' interest and enthusiasm for training. The patient stands on the activity pedal of the robot, simulates a variety of training scenarios such as flat bottom, going up and down the stairs, and the weight loss bracket above reduces the weight of the patient.
Market space: China is expected to be 10.4 billion by 2026, CAGR 52% in 2022-26
China: According to Guanyan Tianxia, the market size of the vision correction industry in mainland China will reach 190 billion yuan in 2022, and the market size is expected to reach 299 billion yuan in 2026, with a CAGR of 13% from 2022 to 2026. According to iResearch, the market size of the rehabilitation medical service industry in mainland China will be about 101.1 billion yuan in 2021, and in the future, in the post-epidemic era, with the acceleration of population aging, the awakening of national rehabilitation awareness and the strong promotion of national policies, the market size of rehabilitation medical service industry will continue to grow, and it is expected that the market size of rehabilitation medical services in China will reach 268.6 billion yuan in 2025. We expect the scale of virtual reality + disability assistance in the relevant market to increase from about 0.5% in 2021 to 1.6% in 2026, and the comprehensive size of the virtual reality + disability disability market space in 21/26 is about 13/10.4 billion yuan, respectively, with a CAGR of 52% in 2022-26.
Global: According to Fact & Factors, the global XR+ healthcare market is expected to grow from $2.7 billion in 2020 to $41 billion by 2026. We expect that the proportion of assistive medical treatment for disabilities related to audiovisual impairment assistance and sports rehabilitation assistance will grow steadily, and the global virtual reality + disability assistance market size may reach $7.2 billion by 2026.