image

CNBC

A million users in April show virtual reality is no fad

Oculus also says its Gear VR has attracted more than 250 app creators

PUBLISHED : Friday, 13 May, 2016, 12:43pm
UPDATED : Friday, 13 May, 2016, 3:02pm

You may have heard of virtual reality (VR). You may have even used it once. And then you might have thought it was just a passing fad.

But there are quite a few people who think otherwise.

On Wednesday, Facebook owned Oculus announced that over a million people used Samsung's Gear VR headset in April. Oculus, which Facebook bought for US$2 billion in 2014 , provides the software for Samsung's device.

Oculus also said developers have created more than 250 apps for the Gear VR, highlighting the attraction of VR platforms for developers.

While the numbers may seem small, it's only been six months since the launch of the Gear VR and analysts said the numbers signal growing momentum for the technology, albeit with a cautious approach.

"If you stand back and get beyond all the geeks shouting about it, you could say these numbers deliver cautious optimism for the potential of VR and 360 degree content," Ben Wood, chief of research at CCS Insight, says.

"VR isn't just something that's a thing that goes on your head. But it is also about the fact we are seeing a whole ecosystem built around it and with the marketing Samsung and Facebook are putting behind it, it's getting more prominent in the consumer consciousness."

And the momentum does not look like it's slowing. Vendors will ship 6.3 million virtual reality headsets globally in 2016, according to research from Canalys. Separate research from CCS Insight suggests that augmented reality and VR headsets could grow to 96 million units by 2020, at a value of US$14.5 billion.

That's why major technology players including Samsung, Google , Facebook and HTC are so keen on the space.

But quality content is going to be crucial for VR taking off in a big way, something that many of the major technology firms have realized.

One key stat provided by Oculus is that seven of the top 10 most used apps are videos and on any given day last month, nearly 80 per cent of people who used the Gear VR watched video content. This is something Samsung is looking to take advantage of with its Gear 360 camera which was released earlier this year and allows people to create 360 degree content.

In addition, both Facebook and YouTube with their billions of users, support 360 video and photos. On Wednesday, Facebook announced that 360 photos will now appear in users' news feeds. Previously they were in a separate section of the site. The move could surface more VR content to people and help the ecosystem.

"With the addition of affordable hardware we are going to see an explosion in content," Daniel Colaianni, co-founder of VR Bound, a virtual reality product price comparison site start-up.

"It is a good thing and a bad thing. So far the content has been for people who can afford to do it. But what's going to happen, just like when you go onto YouTube, there is a whole world content and some is not very good. But then you will get that special spark which comes through."

It's not just gaming and user-generated content that is going to be big in VR. Professional production companies are getting on board. Disney struck a deal to use Nokia's VR camera called OZO to create 360-degree content. And medical professionals are also starting to use the tech.

Google also appears to be stepping up its presence in the space. Media reports on Wednesday suggested the U.S. search giant could be launching a standalone VR headset at its Google I/O event next week.

With the biggest technology companies backing VR the signs look positive for VR.

"There are lots of signals which mean that it can start move beyond geek phase to early adopter and consumer phase," Wood said.