THE RISE OF

VIRTUAL REALITY

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THE RISE OF VIRTUAL REALITY

1.1 Introduction

that the latter leverages data from a pre-determined world, while AR must
gather and process data from a dynamic world.
Juniper defines VR as:

The concept of a VR (virtual reality) or virtual world has long been the
subject of visionary thought and the last few decades have seen
numerous attempts to commercalise the technology. However the
industry has not yet taken off.
Throughout the 1990s VR became increasingly popular, yet with the
technology not quite developed enough to match the media hype, the
industry died down.
Defined as a computer generated artificial reality, VR is the simulation of
a three dimensional image or enviroment that can be experienced and
interacted with, most commonly through stereoscopic goggles.

Virtual Reality leverages pre-determined audio and visual

data from a digital source, using specific software and
hardware to create an interactive and artificial
environment for the user.

1.2 The Development of VR by Industry

1.2.1 Console Games

With the advances in techology and the corresponding growth in interest

from major key players, VR is now in a position where the market can
finally take off. The technology is poised to transform the entertainment
industry over coming years, whilst holding promising potential to quickly
expand into other markets such as industrial and healthcare.

The games industry is expected to be the driving force behind the initial
development of the VR market. The major developers are all primed for
the entertainment industry and the success of future applications is likely
to fan out from the device penetration as provided by the games market.

1.1.1 Definition of VR

Consequently Juniper expects the most significant development of VR

within the forecast period to be in the games market.

The difference between VR and AR (Augmented Reality) is immediately

apparent as VR transports the user to an entirely computer-generated
world, where visual perception of the physical world is lost.
Indeed, the fact that AR requires interaction with the physical world
makes the technology, in some senses, more complex than VR, given

THE RISE OF VIRTUAL REALITY

Figure 1: Project Morpheus Demonstration at GDC 2015

Source: Sony via PCPro.co.uk

1.2.2 The Film Industry

While games are likely to be the main driving force of VR, potential
opportunities for the film industry are also likely to be a major part in the
initial development of the technology. On a basic level, various cinema
applications already allow traditional formats to be watched in the
cinematic experience of VR.
However, as with game adaptations, these are likely to suffer from a
novelty factor and merely provide a bridge between these traditional
formats and purpose-built VR films.

Figure 2: Welcome to Aleppo Screenshot

Source: Ryot YouTube

1.2.3 Adult Entertainment

Another emerging sector of the VR ecosystem is the potential for the
adult market. Porn industry representatives believe that VR is still very
much in its development stage and will not see large-scale uptake during
our forecast period. However, work is currently underway to shoot VR
porn, as well as to apply it to up-coming devices such as Red Light
Center developed by Utherverse, designed for Oculus Rift and debuted at
the AVN Expo. A handful of websites are currently also devoted to
producing hard core content for VR headsets.

1.2.4 Gambling
While Juniper feels VR is still a few years away from being perfected, we
have already seen entrants from the gambling market in the market,
providing an insight into the future prospects for gambling applications.

THE RISE OF VIRTUAL REALITY

Figure 3: William Hills VR Racing

offering the potential to quickly expand into other markets such as

industrial and healthcare.

Far East & China will witness increased development and production
activities, driven by a sharp rise in consumer demand.

Hardware retail revenue from VR HMD headset sales will exceed

$4 billion by 2020.

Figure 4: Number of VR HMD Devices (m), Split by 8 Key Regions

30 Million
Source: William Hill

1.2.5 Industries beyond the Consumer Sphere

Beyond consumer applications, VR is beginning to show potential in
many other areas, with a major footing in applications such as military
training, and offering opportunities to areas such as medical and even
nuclear facilities.

1.3 VR HMD Shipment Forecast Summary

Juniper Research forecasts that wearable VR HMD (Head Mounted
Display) shipments will approach 30 million globally by 2020, compared
to just over 3 million in 2016.
Our research observes that with technological advances, such as low
latency and smarter graphics, coupled with the corresponding growth in
interest from major players, VR is now in a position where the market can
finally take off. The technology is poised to transform the entertainment
industry, including games and video, over the next few years, whilst

North America

Latin America

West Europe

Central & East Europe

Far East & China

Indian Subcontinent

Rest of Asia Pacific

Africa & Middle East

Source: Juniper Research

THE RISE OF VIRTUAL REALITY

Order the Full Research

Key Trends and Market Developments discusses sector dynamics

allied to a series of strategic recommendations for players across the
value chain.

Future Outlook and Road Mapping investigates key market

Virtual Reality: Market Dynamics & Future Prospects 2015-2020

Junipers Virtual Reality Insights research report provides a
comprehensive analysis of the developments in the VR industry across
multiple verticals. The research delivers an authoritative view on the
current market landscape and the future roadmap for VR.

opportunities for stakeholders alongside a number of case studies.

Market Sizing and Forecasts 5 year forecasts for VR headset

shipments, installed base and hardware retail revenue.

Key Features
Publications Details

Provides an in-depth analysis into the current forces driving the VR

(Virtual Reality) market.
Strategic review of the most important trends and opportunities in the
rapidly evolving VR marketplace.
Investigates key industry hurdles, such as technological difficulties and
ethical challenges.
Juniper Road Mapping of VR: Now, Near Future & Far Future
Opportunities.
Comprehensive market forecast set, projecting the size and value of
VR headsets.

Publication date: September 2015

Authors: Nitin Bhas & Joe Crabtree
Contact Jon King, Sales & Marketing Manager, for more information:
Jon.King@juniperresearch.com
Juniper Research Ltd, Church Cottage House, Church Square,
Basingstoke, Hampshire RG21 7QW UK
Tel: UK: +44 (0)1256 830001/475656 USA: +1 408 716 5483
(International answering service) Fax: +44(0)1256 830093
http://www.juniperresearch.com

Whats in this Research?

Juniper Research's latest Virtual Reality Insights Research report
evaluates the key developments in this fast growing market, including an
in-depth discussion of key market challenges and future growth drivers.
The research suite is delivered in PDF format and includes: