In the past year, the VR/AR industry has stepped up a higher ladder from the capital market, upstream supply chain, brand enterprises, content developers to the consumer market. Based on the editor’s summary of past experience, industry observation and market judgment, we hereby release “Insight into Ten Trends of Global AR/VR Market in 2023” for industry reference.
1、 The VR track has become the main track for giants to compete with, and it is difficult for new startups to compete with it
From the VR box in 2014 to the 6DoF VR all-in-one machine in 2022, the global VR industry has entered the initial stage of industrial development. The near-eye display technology, interactive sensing and content ecology have all ushered in different degrees of innovation. The entry and development of large factories have accelerated the landing and application of this series of technologies and content, and at the same time also intensified the industry competition.
Under this development trend, the current market competition pattern of VR players has been preliminarily determined, and the market barriers are constantly rising. At present, it has achieved a breakthrough of tens of millions of units. Considering the wide range of VR application scenarios, there is still great room for development in the future. However, due to years of market development and reshuffle, it is difficult for VR track startups to have entry advantages and entrepreneurial opportunities. The future VR hardware market will mainly focus on large manufacturers.
It is expected that in 2023, the increment of VR head display will be mainly displayed on PlayStation VR2, as well as the possible release of Apple’s MR head display and the chain reaction brought by Apple; Due to the high price of Quest series such as Pro, it is difficult to obtain the effect of the previous generation of products in the consumer market; Due to the price increase, Quest2 no longer has the offensive advantage in the face of Pico and other products; It is likely that Quest3, which will be released in 2023, will lead to a new explosion point. It mainly focuses on low-price consumption.
2、 The trend of AR entrepreneurial layout at the consumer end is coming, and it is expected that new products will be intensive in 2023
According to incomplete statistics, up to now, there are more than 50 AR brand manufacturers in the world. In addition to Google, Microsoft, Epson and other old players, AR start-ups in the past two years and new AR businesses in large factories are also particularly prominent.
AR start-ups mainly shift from traditional mobile phone industry executives and technical experts to “category” to AR smart glasses. The development of mobile phone market has reached the ceiling, and the huge gap in AR smart glasses allows them to see the future increment; The new AR business is mainly based on the “business extension” of traditional VR manufacturers and mobile phone manufacturers, from VR to XR, from mobile phones to AR glasses.
It is expected that 2023 will still be a year of intensive launch of AR new products. Manufacturers that may release/launch AR new glasses include Apple, Samsung, OPPO, Snap, Xiaomi, PICO, FFALCON, Rokid, Nreal, TQSKY, INMO, etc.
At present, its main application scenarios still focus on movie viewing and information prompt, including mobile phone, smart watch, vehicle and machine linkage, etc.
3、 From traditional e-commerce and interested e-commerce to VR/AR offline stores, cross-border sales and multiple marketing modes
The Internet has led to the rise of online e-commerce platforms, and short video has brought interest e-commerce based on live broadcast and video. As AR/VR, which focuses on close-eye display and immersive large-screen experience, offline stores are obviously the natural soil for its more suitable growth in the context of low user awareness.
In 2022, due to the demand of market expansion, Meta, PICO and other manufacturers opened offline direct stores, while Dapeng VR, YVR, Rokid, FFALCON and other companies have also launched different offline store strategies.
With the opening of the epidemic policy, the market strategic layout of major VR/AR manufacturers is expected to further expand the global offline VR/AR experience stores and outlets in 2023. Finally, a multimodal and multi-channel sales model of online+offline, self-support+tripartite cooperation will be formed.
4、 Accelerated landing of advanced VR near-eye display, processing chip and perceptual interaction technology
In 2022, 6DoF Pancake VR all-in-one machine will become the main product form in the market. Pancake folded optical path design compresses TTL through optical turn-back to achieve the purpose of reducing VR head display volume.
At present, there are obvious differences in the design of the folding optical path of various VR manufacturers Pancake. It is expected that in 2023, there will be more optimization in the optical transfer function, ghost rate reduction, refractive design and other aspects. Pancake folded optical path enters the second stage, from landing application to depth optimization.
On the premise that the optical path is determined, there are still many options for the display panel. The editor judged that before Micro-OLED could solve the problem between large size FOV and cost measurement, it is expected that Mini LED backlight technology will become the main transitional solution in 2023.
Chip giant Qualcomm brought Snapdragon XR2+in 2022. It is expected that the VR all-in-one machine released in 2023 will be based on Snapdragon XR2+, further improving the performance of VR all-in-one machine and reducing product power consumption. In terms of perceptual interaction, it is expected that in 2023, advanced human-computer interaction technologies such as eye tracking technology, gesture recognition, face recognition, etc. will be further implemented on consumer-grade VR all-in-one machines.
5、 Split XR glasses will be reduced to less than $300, and integrated AR glasses will gradually become the mainstream form
In 2022, there are many products of split XR glasses, and the homogenization phenomenon is relatively serious. With the market price less than $400, it occupies the leading position in the AR/XR glasses market. With the scale benefit of the industry, it is expected that the price of split XR glasses will be reduced to less than $300 in 2023, further opening the consumer market.
Although the split XR glasses are the mainstream of the C-end market, under the situation of increasing market competition, it is expected that the integrated AR glasses will gradually become the main C-end product form of manufacturers in 2023. Relying on smart phones, we have formed a diversified AR hardware market with multiple application scenarios, multiple optical solutions and multiple product positioning, highlighting the product differentiation of various brands.
As a new AR mobile platform, Snapdragon AR2 platform can not completely implement its performance and function in the product for a short time. In 2023, low-power wearable processors will still have a life cycle.
6、 Works with strong social attributes are more likely to become popular, and more 3A works are listed
In 2022, the basic experience of VR hardware will be further improved, and the content ecology has become an important chip for brand VR manufacturers to seize the consumer market. In particular, with the launch of Sony PS VR2, it will bring more 3A level masterpieces. Known VR masterpieces including Horizon: The Call of the Mountain, Biochemical Crisis 8, GT Racing 7, Ghost Hunters, Behemoths and Walking Dead will be launched in 2023.
Works with strong social attributes are more likely to become popular. Among the top 10 VR games in 2022 selected by the industry, four are strong social attributes, such as Zenith: The Last City, Among Us VR, Gym Class-Basketball VR, and Gorilla Tag. Although many MetaUniverse applications have been listed since last year, there are some differences between strong social works and MetaUniverse applications. The former is more purposeful, the game is more playable and user stickiness is higher; While many of the Meta Universe also have built-in game playing methods, it is difficult for the games in it to be as popular as Gorilla Tag and Inside the Backrooms.
From the perspective of content, in 2023, exclusive/self-made VR games, VR social, VR office, VR live broadcast and film and television content will further increase, but the game segment is still the one with strong willingness to pay. At the same time, it is expected that more meta-universe products will be launched in 2023, but in the case of limited traffic, many works without core features and advantages will be difficult to obtain the important data of “number of people online at the same time”.
7、 AR application scenarios continue to be explored, and it is expected that the consumer’s native AR content will start in 2023
At present, the AR application ecosystem is mainly based on mobile phones. With the introduction of integrated AR glasses, the maturity of optical display technology, and the market volume, the brand has started to make its own or cooperate with software developers to create native AR content based on AR glasses.
Among the native AR content, the application of VSLAM algorithm through the camera is the most important. It is expected that the native AR content will usher in the initial stage in 2023, but in the early stage, most of the performance is weak, and the brand needs to provide incentives and support.
It is worth noting that the release of Apple MR products will accelerate the development progress of AR software content, attract more developers and stimulate market potential.
8、 MR trend deepened, full-color perspective became standard
In 2022, VR head display will no longer adhere to the “closed experience” and add RGB cameras to achieve full-color perspective, which has become the trend of integrated VR products. Representative products include Quest Pro, PICO 4, Adventure MIX MR, HTC Vive XR Elite, etc.
Based on full-color perspective, VR games, VR social networking, VR office and other scenes can emerge more ways of playing in combination with the real world. It is expected that the content of MR will be further increased in 2023, and the full-color perspective technology will move towards a more mature stage.
9、 VR/AR+B/G market is still the main “profit” position
In 2017-2021, when VR/AR was silent in the C-end market, business from the B/G end supported many enterprises to overcome difficulties.
Such as multi-domain MR solution provider Microsoft, multi-domain AR solution provider Vuzix, educational VR solution provider ClassVR, industrial AR overall solution provider Ryowell, offline entertainment, educational VR solution provider Dapeng VR, etc.
When it is difficult to realize scale market benefits at the C end, the VR/AR+B/G end market is still the main profit position. According to the statistics of Zhan Xinyuan Universe, there will be a total of 421 bidding projects in 2022, involving 169.343 billion yuan. The bidding subjects include government, enterprises, universities, secondary schools/vocational schools, banks, cultural and tourism companies, mobile communication companies, newspapers, museums, etc.
With the opening of the epidemic, the economic recovery and the maturity of VR/AR software and hardware, it is expected that the B/G market cooperation will be further expanded in 2023, and the in-depth customized VR/AR software and hardware integration solution will become the mainstream form of cooperation in the future.
10、 The overall amount of VR/AR industry financing will increase, and the number of investments will decrease
In 2023, the investment and financing market environment will be improved compared with that in 2022, especially the opening up of the epidemic situation, which will help the implementation of enterprise projects and the progress of investment and financing. However, investment and financing will show a more obvious polarization trend, with more funds flowing to early projects and mid-late projects. Financial investment will be more inclined to early seed and angel round project investment; State-owned assets and strategic investment will tend to be more stable projects in the middle and later stages.
In 2023, financial investment institutions, industrial investors and state-owned assets will be more cautious. On the one hand, affected by uncertain international relations and economic environment factors, the difficulty of raising funds has increased, and the downturn of the secondary market has been transmitted to the primary venture capital market; On the other hand, the operating data of financing enterprises is also difficult to support the overvalued value, and it is difficult for investors to grasp the entry time. In addition, the expectation of VR/AR market is not optimistic enough, and the delay of market maturity at home and abroad is also a major factor.
However, some big variables will not be excluded in 2023. For example, if Apple’s MR product is released in 2023, it will drive the overall activity from the capital, industry and market levels.
It is expected that in 2023, more investment will be concentrated on leading enterprises and star projects, and the overall financing amount of the industry will further increase, but the financing amount may decrease. At this stage, compared with VR hardware, it is expected that the VR software and content sector will receive more financing in 2023, while the AR sector, which is still in the early stage of industrial development, will show diversification.