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Zen Soo

Over 85 million virtual reality (VR) headsets will be in use in China by 2021, as digital entertainment continues to surge, spurring strong growth in industries such as internet video, cinema and video games, a new report from PwC claims.
Its Global Entertainment and Media Outlook 2017-2021 found that China’s demand for virtual reality VR headsets will reach 85.9 million within five years, overtaking the US’s projected 68 million.
“The entire VR market is new, with increasing VR device penetration and continual investment in the industry, its potential is very promising, even if profitability is an issue at present,” said Jane Kong, PwC China entertainment and media partner.
VR content revenue is forecast to hit US$3.6 billion in China by 2021 with over half coming from video, and 46 per cent from gaming.
“No one will get rich from hardware alone. The end game for these firms will be attempting to become the standard platform for VR and start to charge royalties or commission from content sales,” Kong said.
A main driver of China’s entertainment and media industry is also internet video, which reached US$1.8 billion in revenue last year.

Although regulations against so-called over-the-top (OTT) services – audio, video, and other media transmitted via the internet as a stand-alone product – were introduced towards the end of 2015, PwC believes OTT still has “room for growth”, with consumers expected to spend almost US$4.5 billion in 2021 on the internet video industry.
“Over the next five years, China will witness a significant shift of viewing video content from free-to-air to paid video-on-demand services. Offering premium foreign and domestic content is key for OTT providers,” said Cecilia Yau, PwC Hong Kong Entertainment and Media Leader.
Box office revenues have also shown that Chinese consumers still have strong demand for cinema. Last year, China’s box office was worth US$6.2 billion, and this is expected to soar to US$10.7 billion by 2021 as the country continues to build more cinemas.
The total number of cinema screens exceeded the US in 2016, with 41,056 screens compared with 40,928 in the US. By 2021, China will also lead with 575 IMAX 3D screens, more than any other country in the world.

According to PwC, China’s video gaming industry continues to thrive, with the market expected to be worth US$26.2 billion by 2021, making China the second-largest after the US.
Social gaming revenue overtook traditional games in China in 2015, and video games made in China have also found a foothold in markets such as US, Japan and Korea, spurring overseas market growth to increase by close to 150 per cent.
In Hong Kong, social gaming revenue increased by almost 26 per cent to rake in US$373 million, surpassing traditional gaming revenues of US$360 million for the first time in 2016, the report found.
Hong Kong’s total video games revenue for 2016 was US$742 million, which reflects the increasing importance of this segment in the entertainment and media sector, PwC said.
The popularity of gaming as well as the city’s infrastructure, such as high internet speeds, means Hong Kong is well positioned to become an “Asia-Pacific or global hub for e-sports”, said Wilson Chow, PwC China and Hong Kong TMT Leader.
“The Hong Kong government and business tycoons are supportive, and investment has been made in this field,” Chow said.
“We find that in China, Korea and Japan, people are very receptive to e-sports, and these countries have been reporting quite a significant growth [in this area].”


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Chinese will use 86 million virtual reality headsets within five years

Visitors test virtual reality VR headsets during the Computex Show in Taipei last month. More then 16.000 companies took part in the even. Photo: AFP

Members of the media wear virtual reality headsets featuring the Tmall Cat, mascot for Alibaba Group Holding Ltd.'s Tmall online marketplace, at Alibaba's annual November 11 Singles' Day online shopping event in Shenzhen, China, on Friday, Nov. 11, 2016. Alibaba broke its $14 billion Singles' Day sales record with room to spare, offering assurances about the strength of the Chinese consumer despite the nation's economic slowdown. Photographer: Qilai Shen/Bloomberg

PwC China and Hong Kong, TMT Leader Wilson Chow at the PwC Global Entertainment & Media Outlook 2017-2021 at the East Town Building in Wan Chai. 08JUN17 SCMP / Jonathan Wong

5G mobile technology will usher in a golden era for virtual reality, augmented reality, Shezhen tech giants say

Peng Liyuan, wife of Chinese President Xi Jinping, examines Microsoft's HoloLens device during a tour of Microsoft's main campus in Redmond, Washington September 23, 2015. REUTERS/Ted S. Warren/Pool TPX IMAGES OF THE DAY

A holographic image of Larry King was projected during a June 24, 2016 demonstration at Hong Kong Science and Technology Park. The HumaGrams technology enables two way interaction with an audience, according to ARHT Media. Photo: David Wong

Alibaba uses virtual reality to make shopping more interactive

Alibaba launched its VR strategy in March by setting up the GnomeMagic Lab to develop related technologies. Photo: Reuters

(160525) -- GUIZHOU, May 25, 2016 (Xinhua) -- A visitor gives a trial for a VR technology product during Guiyang International Big Data Expo 2016 in Guiyang, capital of southwest China's Guizhou Province, May 25, 2016. The 5-day expo exhibits the world's latest development of cutting-edge big data-based technologies, products and solutions. The 2016 China Big Data Industry Summit & China E-Commerce Innovation and Development Summit are also held during the expo. (Xinhua/Ou Dongqu) (wx)

China Hi-Tech Fair highlights virtual reality and smart city solutions as start-ups focus on research, not robots

新华社照片，深圳，2016年11月16日
    第十八届高交会在深圳开幕
    11月16日，第十八届中国国际高新技术成果交易会在广东深圳开幕。
    新华社记者 毛思倩 摄

Virtual reality (VR) was one of the technologies that took the spotlight at this year’s China Hi-Tech Fair. Photo: SCMP Pictures

China’s Palace Museum’s virtual reality ‘reconstructs’ ancient kilns that made emperors’ porcelain treasures

Up to 165 ceramic relics uncovered in Jingde at the site of the ancient kilns and factories are now on display at the Palace Museum. Photo: SCMP Pictures

China’s ZTE is betting on popularity of virtual reality and high definition videos

ZTE’s booth at the Mobile World Congress Shanghai event. The company is betting big on the popularity of VR and HD videos with its new ‘big video’ solution. Photo: SCMP Pictures

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VR content revenue forecast to be worth US$3.6 billion in China by 2021, says PwC.


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