World view: The battle for dominance in VR entertainment

Market analysts Greenlight Insights explore the rise of Location-based Virtual Reality Entertainment in the US and Asia-Pacific.
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Location-based virtual reality entertainment (LBVRE) is on the rise in North America.

Greenlight Insights’ research indicates that the LBVRE industry, currently valued around $40.8 million dollars will grow dramatically to almost $187 million by 2021. While this growth is positive, it is nothing when compared to the Asia-Pacific market, which is currently valued around $155 million and will reach nearly $825 million by 2021.

This market, led by China, is on a similar path but led by different factors from North America. The differences fundamentally come down to dissimilar behaviors between the North American consumer and the Asia-Pacific consumer.

In North America, consumers want social content - think of the popular Escape the Room experiences frequenting North American cities. This is also clearly seen when examining the top-selling video games in the US. Multiplayer titles like Call of Duty: Infinite Warfare and Battlefield 1 dominated the sales charts in 2016. Minecraft has sold over 122 million copies, largely attributed to its multiplayer world-building. Virtual Reality does not yet have this kind of inclusive experience, not in the home and not within LBVRE. In the Asia-Pacific market, the lack of compelling social content does not matter.

Asia-Pacific LBVRE consumers are more drawn in by content in general – content that is easier to obtain. When looking at software infrastructure, Asia-Pacific is generally far ahead of North America. Services like Viveport, which is illegal in North American LBVRE, are fully integrated into large markets like China. This helps LBVRE centers spread and regulate the virtual reality experiences that are available. This infrastructure also helps filter out the less-than-stellar content that can turn off the public.

Content, however, does not matter as much as the lower entry cost for Chinese VR arcades. The U.S. Disposable Personal Income is $14,490.10 compared to China’s $4,989.31, meaning that Chinese consumers in general have much less money to spend. Chinese VR arcades have succeeded largely because they are so affordable. This is also true of Japan, where consumers can spend less than $5 USD per hour on LBVRE.

Greenlight Insight’s research found that LBVRE performs best in cities, and Asia-Pacific is no different in this regard. That said, the Asia-Pacific region supports a much larger population than North America. Shanghai has roughly three times the population of New York City. This translates to three times as many consumers looking to spend money on fun activities.

Moreover, Asia-Pacific LBVRE centers have been smart about their location placement. Institutions in Japan, for instance, are likely to open near popular tourist attractions or in family-friendly centers. This further maximizes the amount of foot traffic and potential customers.

This combination of low entry cost, high population, prime location, and accessible content has propelled the Asia-Pacific LBVRE market into a global leader. Even as more compelling virtual reality entertainment develops, there is no reason to think that this region will lose its place at the top. Advances in virtual reality technology continue to be rolled out weekly, most of which will help the LBVRE segment across the globe. This is an industry still very much in its infancy. 

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