VR/AR Lost Meta Universe
The lukewarm VR/AR wearable devices have been on fire for a while due to the rise of the meta-universe, and then returned to calm with the meta-universe.
In January, Microsoft laid off employees in departments such as Surface devices, HoloLens mixed reality hardware and Xbox. The HoloLens team, which is responsible for mixed reality hardware (MR), was subject to massive layoffs, although Microsoft said it would continue to work in the field of mixed reality and support for the current HoloLens.
In February, some media broke the news that Tencent's XR team had cancelled all its positions, and more than 300 employees in the department would be given a two-month buffer period to find internal living water or external opportunities. Tencent has since denied rumors that the XR team has been disbanded and stressed that it will not give up exploring XR, but also admitted that it is adjusting its direction.
In the same month, PICO, a VR vendor owned by Byte Jump, carried out a new round of staff optimization, with a team of about 2,000 people, the optimization ratio is 20%-30%, which means that nearly 400-600 people will be laid off. PICO officials said that this staff optimization is a normal organizational structure adjustment, and business operations will not be affected.
It can be found that although Tencent XR, Microsoft, PICO and other manufacturers optimize sex layoffs and reduce investment, their determination to lay out VR/AR has never changed. The reason for this is simply that the VR/AR industry has huge imagination space and long-term growth potential.
01 Foreseeable broad prospect
AR/VR devices are coming out all the time, but there are still many people who do not know much about it. In simple terms, AR (augmented reality), i.e., the real-world viewing experience is enhanced by devices. VR (i.e., virtual reality), i.e., the integrated use of computer graphics systems and various display and control interface devices, provides immersive technology in a computer-generated interactive three-dimensional environment.
Over the years, AR/VR technology is widely used to promote the digital upgrade of various industries and create a larger blue ocean market, becoming the direction of concern for many major technology companies.
According to IDC forecasts, the total global augmented and virtual reality (AR/VR) investment scale is close to $12.54 billion in 2021 and is expected to increase to $50.88 billion in 2026, with a five-year compound growth rate (CAGR) of 32.3%. At the same time, China's AR/VR market will maintain a high growth rate of 42.2% CAGR from 2021 to 2026, and will grow to be one of the most important markets for global AR/VR.
Not only that, after a long exploration period, the industry's development prospects have become clearer.
First of all, AR/VR industry pioneers have been working on the B and C markets for a long time and have come up with a more mature commercialization model, especially in the field of wearable smart products, which has laid a considerable territory. AR/VR devices are widely used in games, AR advertising, VR cloud tourism and other products are relatively mature, and AR/VR technology will be widely used in many industries in the future, so the commercialization space is self-evident.
Second, AR/VR devices continue to explore the integration with medical, aerospace, industrial and other industries, and their importance is increasing. AR/VR devices can help enterprises improve quality, reduce costs and increase efficiency, for example, in the medical industry, AR/VR devices can be more intuitive, real-time and accurate operation and information presentation to help doctors diagnose and treat diseases.
Then again, thanks to VR/AR technological advances and cost reductions, consumer recognition has increased and market penetration continues to rise. For consumers, VR/AR devices are a bridge between reality and virtual scenarios, greatly expanding the boundaries of user experience, which is both fresh, novel and interesting.
Although VR/AR technology has a large application space and a vast business blue ocean, it has not been able to achieve popularity due to technical bottlenecks and imperfect AI infrastructure, and the road to scale of VR/AR is a long way to go.
02 The dilemma of sales decline faced
The popular VR/AR devices are mainly wearable products, such as glasses, helmets, etc. Therefore, the high and low sales of VR/AR headsets can reflect the boom of VR/AR industry to a certain extent.
Data from Loto Technology shows that in the quarter of 2023*, sales of VR/AR virtual reality devices on major online retail platforms were 67,000 units, down 17% year-on-year, and the average price reached $3,469, down $21 from the same period. In addition, according to international data company data, the global VR/AR headset shipments in 2022 will only be 8.8 million units, down 20.9% year-on-year.
As the saying goes, "A grain of dust of the times is a mountain when it falls on an individual", VR/AR device sales are on a downward trend overall, and VR/AR manufacturers such as Thunderbird and Nreal are having a hard time.
The new entrant in the AR industry, Thunderbird, has many names, "industry dark horse" and "outbreak faction", and there are many words of praise and few voices of doubt. The fact is also true, less than 2 years after its establishment, Thunderbird ranked first in the industry with a 28.4% share (2022 domestic consumer-grade AR glasses sales online channel).
In fact, the industry growth dark horse also faces multiple challenges. First, the content ecology of consumer-grade AR glasses is not rich enough, and Thunderbird AR glasses do not get the corresponding content match, so I am afraid it is difficult to maintain high growth. Second, the popularity of consumer-grade AR glasses is not high, and Thunderbird needs to spend time, energy and money to cultivate user habits. Third, consumer AR glasses have technical defects, and it is difficult to achieve large-scale commercialization overnight.
No coincidence, industry veteran Nreal is also facing growth pressure.
Internally, AR glasses technology research and development costs are high, and it is difficult to scale the product to the ground, so Nreal is difficult to achieve self-blooding in a short time, relying on financing funds to support the pressure. Externally, Huawei, Xiaomi, Byte Jump and other Internet companies are rushing in, and Nreal is facing huge competitive pressure.
PICO, a VR vendor owned by Byte Jump, plans to lower its sales target for 2023, also confirming that the current state of the VR/AR industry is not optimistic. PICO said, "The 2023 target has been adjusted downward somewhat from 2022 (a target of 1 million units, with actual sales of about 750,000 units), and it is not convenient to announce the specific data target, but it will be higher than 500,000 ".
VR/AR devices have not yet reached the full outbreak stage, Nreal, Thunderbird and PICO will still continue to explore the scale of VR/AR devices on the ground and unlock more intelligent technologies and application scenarios.
03 Content bottleneck and technical wild hope
After more than a decade of exploration, AR/VR industry still has not become a mainstream product. In addition to the technical shortage, it also lacks phenomenal application scenarios and rich content ecology.
In terms of content, the relative scarcity of domestic VR content is mainly due to the small number of VR developers and the lack of a systematic talent training system, with most of the content introduced from overseas, and the content ecology needs to be expanded.
According to the public data, VR/AR content includes entertainment content, education content, live content, real estate and home content, medical and health content, industrial manufacturing content, cultural and travel content and others, accounting for 54.6%, 16.0%, 8.3%, 7.8%, 5.4%, 4.1%, 0.9% and 2.9% of the VR/AR content market respectively.
Even in the game field, which accounts for a larger share of VR/AR, there are problems of insufficient content stock and imperfect content ecology. It is understood that in the first half of 2022, the domestic head VR content platform Pico Store only 42 new works on line, and most VR content from overseas introduction, domestic works accounted for only 7, accounting for only 16.67%.
In terms of scenarios, VR/AR technology tries to integrate with multiple industries and derive various new models. According to incomplete statistics, VR/AR technology has been widely used in artificial intelligence, education and training, medical health, game entertainment, film and animation, digital tourism, digital interactive media, virtual community, digital city, design planning, display marketing, industrial simulation, emergency preparedness and other industries.
However, VR/AR technology has not penetrated into the key links of the industry chain, and few industries have been completely transformed or subverted by VR/AR technology, which is the reason why the VR/AR industry has not yet formed a large scale. How to make wide and deep AR/VR application scenarios and make VR/AR become an irreplaceable technical means is a big test for VR/AR manufacturers.
In terms of technology, AI is the core technology of VR/AR industry, and the refinement of core technologies such as computer vision and deep learning is expected to drive VR/AR devices into the fast lane of development.
For example, "ChatGPT + AR/VR" has collided with new technology sparks. British startup XRAI Glass has integrated OpenAI's ChatGPT technology into its app and AR glasses to provide real-time captioned augmented reality glasses for the deaf and hearing impaired.
In addition, optical, display and chip technologies continue to innovate, greatly improving the performance of VR devices, while attempts at "optical waveguide + MicroLED" solutions may promote the popularity of consumer-grade AR products. The development of artificial intelligence technology makes VR/AR devices thinner and lighter, with better interactive experience, and the future "AR/VR+" is expected to broaden the commercialization space and imagination of VR/AR devices.
In short, as VR/AR continues to expand application scenarios, enrich content ecology, and break through technical bottlenecks, the AR/VR industry will usher in an explosive period and will form a "quality content-user-developer-platform With the continuous expansion of application scenes and enrichment of content ecology as well as the breakthrough of technical bottleneck, the AR/VR industry will see an explosion, and a benign VR/AR ecosystem of "quality content-user-developer-platform" will be formed.
04 Tend to be diversified, high quality and popular
In the short term, VR/AR is indulging in the smoke of the meta-universe "flame out", and the sales and sound volume have declined. In the long term, Nreal, Thunderbird, PICO and Apple and other technology companies actively layout, will push up the industry boom, VR/AR devices will tend to diversify, high quality, mass.
On the one hand, the development of artificial intelligence technology drives VR/AR manufacturers to develop high-quality and refined VR/AR devices to meet the growing intelligent demand of consumers. From Apple's official announcement of MR headset, we can see that the technology accumulation of VR/AR manufacturers for many years is expected to drive the value of VR/AR devices to a new level.
Some media broke the news that Apple MR headset is expected to be launched in the second half of 2023, supporting both VR and AR, which allows users to switch between VR and AR. The headset is said to include many features, including iPad apps, meditation apps, live virtual reality and news viewing, third-party game adaptations, and work apps for virtual meeting rooms.
On the other hand, the connection between VR/AR technology and various industries is getting closer and closer, and while "VR/AR+" releases intelligent capabilities, various forms of VR/AR devices will be diversified and popularized. From the layout of more and more Internet enterprises, technology enterprises and startups, it can be seen that in the near future, *cost-effective VR/AR devices will enter ordinary people's homes.
For Nreal, Thunderbird, PICO and other VR/AR manufacturers, 2023 is a year full of challenges and the most anticipated year.