TrendForce’s latest market survey finds that VR devices will enjoy strong sales this Christmas season on account that game consoles are also going to be popular gift purchases. Based on TrendForce’s latest analysis, annual shipments of VR devices worldwide (excluding mobile VR device) are projected to reach 2.91 million units for 2016 and grow massively by 75% to 5.1 million units for 2017. In terms of ranking of brands by shipments, Sony is expected to take first place this year, followed by Oculus in second and HTC in third.
“Shipments of PS VR, Oculus Rift and HTC Vive have all being constrained by low production yields and shortages of key components,” said Jason Tsai, wearable device analyst at TrendForce. “Generally speaking, the market supply of VR devices will remain tight until 2018.”
On the demand side, much of VR device sales for 2016 will depend on consumer demand during Christmas holidays. As sales of gaming hardware and software are now at their seasonal peak, sales of VR devices are expected to surge as well. Due to the novelty factor, VR devices are expected to be one of the hot holiday gift options.
In terms of annual volumes, Sony is projected to ship around 1.5 million units this year. “Despite the AMOLED panel shortage and the low production yield, Sony has the highest annual figure compared with the other two major brands,” said Tsai.
Tsai also pointed out that December will account for at least half of PS VR sales for the year because PS VR as a console accessory will follow the sales pattern of PS4. “The stock of PS VR in retail channels will probably be almost depleted by the end of the holiday period,” added Tsai. “Sony therefore will be working hard to increase shipments next year in part to meet the strong demand and in part to fulfill the orders that were not completed in 2016. Additionally, Sony will also launch more exclusive PS VR games developed by third-parties next year. TrendForce forecasts that shipments of PS VR device for 2017 will reach about 2.5 million units, representing an impressive annual growth of 66.7%.”
Shipments of Oculus Rift and HTC Vive for this year will respectively come to 650,000 and 460,000, according to TrendForce’s estimation. While Oculus and HTC lag behind Sony in volumes, their products are also in high demand. TrendForce expects inventories of Rift and Vive in retail channels will be tight during the busy season, but there is no risk of these two devices being out of stock compared with PS VR.
Annual shipments of Rift and Vive for 2017 are forecast to reach 1.2 million and 600,000 units, respectively. Oculus and HTC will continue to strengthen their supply chains next year to raise their shipments. Furthermore, both brands plan to launch their next-generation VR devices sometime between the fourth quarter of 2017 and first quarter of 2018 as to create new demand.
Revenue of global VR market will total US$22.4 billion in 2020 with software making up a larger revenue share compared with hardware
The revenue of the global VR market in 2016 will total just US$1.9 billion, according to TrendForce’s estimation. Revenue sources include hardware and software but exclude revenue from mobile VR devices. As hardware is the focus during this early period of development for VR technologies, it also accounts for a greater share of the total revenue relative to software.
Because the development of the current VR market is hardware-driven, growth is being delayed by shortages of components, especially AMOLED panels. It will take time for the display industry to significantly expand the overall production capacity for AMOLED panels. Meanwhile, the widespread adoption of AMOLED among smartphones is squeezing the supply going to VR devices. Branded VR device vendors this year have found that issues with component supply, along with the low yield rates during the production, have caused their shipments to be lower than their targets.
TrendForce expects the VR market will begin to expand at a more rapid pace in 2018, when hardware shipments begin to stabilize. By 2020, global VR market will grow to US$22.4 billion, and software will have a larger revenue share compared with hardware. Various VR-related applications will also take off at that time.