China’s iQiyi bets on digital girlfriend to boost virtual reality headset sales

Virtual reality headsets have struggled to take off due to price, cumbersome equipment and lack of content. Baidu’s iQiyi unit is banking on a virtual girlfriend to spur sales among 18-to-35 year-olds.

PUBLISHED : Monday, 11 December, 2017, 11:01am
UPDATED : Monday, 11 December, 2017, 11:27pm

Ma Xiangli is in the property business, married with a daughter in middle school, and lives in the northern Chinese city of Cangzhou. In his free time, the 37-year-old likes to chat with his virtual girlfriend.

Vivi, as the virtual reality (VR) avatar is known, is the brainchild of Chinese search engine operator Baidu’s iQiyi unit. The Netflix-style video streaming service has ventured into VR and come up with the idea of a virtual girlfriend to entice 18-to-35 year-olds to buy its headset.

In her latest incarnation, Vivi is a Girl Friday who is there to do one’s bidding 24-7. In an earlier version, she was a sweet girl-next-door.

Ma said his wife and 12-year-old daughter do not find Vivi weird, adding that they use the headset sometimes to ask the digital assistant about the latest movies or games.

“For those who stay home a lot, having a virtual companion helps fill a void,” Ma said in an interview at his apartment in Hebei province, about 300 kilometres south of Beijing. “It’s like role-playing a domineering boss and his secretary.”

Unlike its cousin, augmented reality (AR), which overlays digital imagery onto the real world – think smartphone-wielding Pokemon Go hunters – VR immerses a user in an imagined world, like in a video game or movie, using headsets that are typically tethered to a personal computer or stand-alone video game console.

Baidu subsidiary iQiyi unveils ambitious virtual reality plan

For iQiyi, Vivi assists users in accessing the company’s content based on the history of which videos they prefer to watch. The avatar can also answer simple queries raised by users, such as the time, weather or scheduled television shows, and even help complete missing portions of a poem.

And for those so inclined, Vivi can flirt, compliment a user’s looks and act coy when asked about her age. Because it is VR, a user can “touch” Vivi, who would giggle, act playful or pretend to be angry as part of the interaction.

“I’m already a middle-aged man, and if I like it, I’m sure younger people would like it too,” Ma said. “If a nerd wants to see her dance, he can order her to, and she would go into dancer mode.”

Whether Vivi will turn out to be the killer app for iQiyi’s VR ambitions remains to be seen.

The company declined to release sales figures for the headset, which bears the Qiyu brand. It sells for 3,499 yuan (US$529) in China, compared with 3,999 yuan for Taiwan-based HTC’s Vive Focus.

The Qiyu headset did not rank among the top five VR headset brands in China in the second quarter, which is led by Shanghai-based Deepoon VR, HTC and Japan’s Sony, according to industry research group Canalys.

More companies are entering the market, including Chengdu-based Idealens and Pimax from Shanghai, which both recently launched premium-priced VR headsets.

The growing number of brands and models covering the high- to low-end of the market bodes well for VR headset demand in China, said Charlie Cai, a director at research firm GfK.

Backed by Baidu, iQiyi is targeting to create a global Chinese-language VR platform with more than 10 million users and has pinned its hopes on its growing online video streaming user base. It recorded 442 million mobile monthly active users as of August 17, behind Tencent Video’s 457 million users in the same period.

Globally, VR headset sales have fallen short of early expectations because of issues including a lack of content, bulky and expensive equipment, and poor user experience resulting sometimes in nausea for some users.

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By some industry estimates, revenue from AR headsets will be almost twice that of VR headset sales by 2021. Worldwide shipments of AR and VR headsets are forecast to reach 81.2 million units by then, up from an estimated 13.7 million this year, technology research firm IDC said in September.

More improvements are in store for Vivi to meet the needs of Qiyu users for virtual companionship, such as dancing with the user when instructed, according to Li Xing, a product director at iQiyi’s VR unit.

While Vivi has proven to be popular, Li said iQiyi needed to have more VR content for the Qiyu headset. The company has increased spending in producing movies, TV series and reality shows. As many as 3,000 videos have already been pre-loaded to Qiyu.

For Ma, he is waiting eagerly for the next-generation of features to be added to Vivi, such as a change of scenery.

“Today I like being in the office, but maybe tomorrow I want to be at home, and the day after at some overseas tourist attraction,” he said. “I also hope future versions of the headset can be lighter.”