Impact Analysis of Covid-19
The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.
Virtual reality refers to a simulated environment created by using software and hardware, in order to provide real environment experience to users. Virtual reality is experienced through sound and sight. Users are required to use gloves, earphones, and helmet that equipped with sensors to experience virtual reality. Virtual reality can be divided into a simulation of a real environment for education and training and development of an imagined environment for a story or a game. Virtual reality in gaming is referred to the use of sound and graphics technology in games where the user wears a head-mounted display (HMD), gloves, or glasses as part of their experience. In virtual gaming, biosensors are used to understand the movement of muscles and nerves properly.
The global virtual reality in gaming market is estimated to account for US$ 38,331.5 Mn in terms of value by the end of 2027.
Market Dynamics- Drivers
- Rapid innovation in technology is expected to drive growth of the global virtual reality in gaming market during the forecast period
Gaming industry is rapidly adopting advanced technologies than other entertainment sectors. End users are increasingly expecting real environment of games, due to advancement in technology. One of the key advantages of VR is that it provides a realistic representation of the player during the game, which makes it more intuitive and lucrative for existing users. Besides, graphics play a vital role in the realistic gaming experience. Technologies such as 3D effects and interactive graphics provide real-time experience to the user. For instance, the gaming device such as Oculus Rift 3D gaming glasses that are equipped with two high definitions (HD) screens for both the eyes provides a better view during the game. The feeling of real presence can be achieved on five aspects including interaction, emotions, immersion, real-time and cognitive science. Thus, these factors are expected to drive growth of the global virtual reality in gaming market during the forecast period.
- Rising disposable income of consumers is expected to propel the global virtual reality in gaming market growth over the forecast period
Users are seeking new and advanced technology in entertainment, due to rising disposable income. According to the U.S. Bureau of Economic Analysis, the total disposable personal income in the U.S. increased to US$ 12,822.6 billion in April 2014 from US$ 12,778.0 billion in March 2014. Virtual reality in gaming provides an attractive source of entertainment as user can experience the real environment during the game. Furthermore, according to the World Bank, the average purchasing power parity per capita of the U.S. in 2012 was USD 52,610. Hence, these factors are expected to propel the global virtual reality in gaming market growth over the forecast period.
North America held dominant position in the global virtual reality in gaming market in 2019, accounting for 35.6% share in terms of value, followed by Europe, APAC and ROW respectively.
Figure 1: Global Virtual Reality in Gaming Market Share (%), in terms of Value, By Region, 2019
Market Dynamics- Restraints
- High cost of reality gaming devices is expected to restrain growth of the global virtual reality in gaming market growth over the forecast period
The basic cost of virtual reality gaming devices is significantly is high as compared to conventional video games. Since designing virtual reality game system involves a significant investment, the average VR gaming devices are expensive. For instance, For instance, the total cost to create a virtual reality system with a virtual environment is between US$ 20,000 to US$ 25,000. Some of the virtual reality helmets cost around US$ 2,000. The introductory price for Sony PlayStation 4 was US$ 399 and the price range for the game is between US$ 40 and US$ 100. Hence, these factors are expected to restrain growth of the global virtual reality in gaming market during the forecast period.
- High complexity associated with virtual reality gaming device is expected to hinder the global virtual reality in gaming market growth over the forecast period
The technology involved in virtual reality is highly complex and is operated by limited users. Many games use massively multiplayer online game architecture, which is difficult to upgrade if needed by the user. Further, the demand for better characters and stories in the game increases the complexity of visual display. Efficient streaming of content to wireless portable devices and for game download has also been an important issue. Streaming of media plays a prominent role in delivery of dynamic content to personal computer (PC) based virtual reality gaming. Hence, these factors are expected to hamper the global virtual reality in gaming market growth over the forecast period.
Virtual Reality in Gaming Market Report Coverage
||Market Size in 2019:
||US$ 5,839.9 Mn
|Historical Data for:
||2016 to 2019
||2020 to 2027
|Forecast Period 2020 to 2027 CAGR:
||2027 Value Projection:
||US$ 38,331.5 Mn
- North America: U.S., Canada
- Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe
- Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific
- RoW: Brazil, Argentina, Mexico, GCC Countries, Israel, South Africa, and RoW
- By Type: Software, Hardware.
- By Console type: MAC, X-BOX, Play Station, PC, Nintendo Wii.
Electronic Arts Inc., Kaneva LLC, Nintendo Co. Ltd, Avatar Reality Inc., Sony Corporation, Oculus VR, Activision Publishing Inc., and Sega Corporation.
- Rapid innovation in technology
- Rising disposable income of consumers
|Restraints & Challenges:
- High cost of reality gaming devices
- High complexity associated with virtual reality gaming device
- Development of comfortable and compact VR gaming can present lucrative growth opportunities
Currently, the various input devices used for virtual reality games including glasses or goggles, head-mounted display (HMD), gloves, data suites, joysticks, and workbenches are quite expensive and uncomfortable to use. Furthermore, there are haptic devices that enable a user to feel a sense of touch when they operate an object within a virtual environment. However, virtual reality gears and devices are incomprehensible and uncomfortable. Major market players are focused on research and development activities, in order to provide more comfortable and compact VR gaming devices. As a result of this, the gears will be lighter, smaller, and affordable. The bulky head-mounted display would be replaced with small-sized lighter models that are comfortable to use and become more compact.
- Research and development activities by market players can provide major business opportunities
Key companies in the market are focused on research and development activities, in order to innovate novel products and expand the market presence. For instance, in April 2014, Electronic Arts Inc. launched the FIFA World Cup game for XBOX 360 and PS3 console as a standalone product. Furthermore, in December 2013, Nintendo Co. Ltd. Introduced a new game with working title Hyrule Warriors, a hack and slash action video game.
Figure 2: Global Virtual Reality in Gaming Market Value (US$ Mn), 2017 - 2027
The global virtual reality in gaming market was valued at US$ 5,839.9 Mn in 2019 and is expected to reach a value of US$ 38,331.5 Mn by 2027 at a CAGR of 28.6% between 2020 and 2027.
- Emergence of microdisplays is a major trend
A microdisplay is a miniaturized display with screen size less than two inches diagonal. These devices are used in rear-projection TVs and in head-mounted displays (HMDs) to enhance the user experience. Key players in the market are increasingly adopting microdisplays in virtual gaming to provide an enhanced user experience. It offers improved UXGA resolution and high speed and also avoids motion sickness during usage. This trend is expected to continue during the forecast period, owing to the diverse use of microdisplays.
- Mergers and acquisitions among major market players
Major players in the market are involved in merger and acquisition activities, in order to enhance the market presence and gain a competitive edge in the market. For instance, in July 2013, Linden Lab Inc. acquired Desura Net Private Limited, a digital distributor for personal computer gamers.
Value Chain Analysis
Developer of virtual reality games include the companies focused on designing and implementing the features of the game. The development process of a game includes pre-production stage, software development and post-production stage. Pre-production stage involves designing of prototypes and features of a game. Software development starts after the approval of the design, which involves development of graphics and sound technology. First party developers are those who manufacture and develop games and consoles exclusively for the company. Second party developer include two different types of developers – those owning independent studios and entering into contracts with platform holders (the development is usually exclusive to that platform), and studios that are wholly or partially owned by platform holders. Third party developers are called upon by publishers to develop a title for one system. Both, the publisher and the developer have considerable inputs in developing content and design for the game. An example of a third party developer is Turtle Beach which is a third party headset manufacturer for PlayStation 3 and XBOX 360. Independent developers are not owned by a single publisher. Some of the developers self-publish their game relying on internet and other publicity media such as word-of-mouth.
Global Virtual Reality in Gaming Market - Impact of Coronavirus (Covid-19) Pandemic
Many countries around the globe such as India, Spain and Italy have imposed nationwide lockdown. For Instance, India have imposed lockdown from 25 March to 1 June till the further notice. In this lockdown retail shops and the malls remained closed. Due to lockdown, the sales of electronics and gaming devices affected drastically. Moreover in India, the manufacturing facilities operated in limited manpower. Hence, COVID-19 restrained the growth of the market during the year 2020.
Key companies operating in the global virtual reality in gaming market are Electronic Arts Inc., Kaneva LLC, Nintendo Co. Ltd, Avatar Reality Inc., Sony Corporation, Oculus VR, Activision Publishing Inc., and Sega Corporation.
- Major companies are focused on product launches, in order to enhance the product portfolio. For instance, in March 2019, Nintendo Co. Ltd. launched a virtual reality cardboard headset for Switch.
- Key players are involved in collaboration and partnership, in order to gain a competitive edge in the market. For instance, in June 2020, Sony Corporation’s PlayStation collaborated with the UN Environment Programme (UNEP) to create immersive virtual reality experience designed to increase global awareness about climate change.