6 Things You Need To Know About Chinese VR Market
I am a VR PM based in Shenzhen, China. This post is for all my foreign friends…
1. Chinese Policy
Chinese government encourages companies and developers to work on VR/AR technology. President Xi Jinping highlighted China’s need to establish an innovative world economy and he sees the growth of VR being an integral part to that.
“First, we need to build an innovative world economy to generate new drivers of growth. Innovation holds the key to fundamentally unleashing the growth potential. The new round of scientific and industrial revolution with Internet at its core is gathering momentum, and new technologies such as artificial intelligence and virtual reality are developing by leaps and bounds…”
“The combination of the virtual economy and the real economy will bring revolutionary changes to our way of work and way of life.”
But one thing I need to point out is, we have strict regulations on content supervision, especially under President Xi’s power, in the past couple years, we’ve already put the CEO of kuaibo (one of the hottest video player app in China) in prison, even you cannot blame everything on this company or CEO himself.
If you are doing VR pornography, you can never get into China market LEGALLY.
Although you may see “Girls” as the most popular type of VR video in every app, those “porn-ish” videos always get the highest views. These companies are really good at playing and scrapping these rules, in Chinese we call it “edge ball”.
There’s even a company flew to Japan and shot a Japanese AV porn star. It is so popular among users that soon becomes a series in China.
It’s sad for VR. ??
2. Environment
In recent years, VR/AR has already built its own reputation among majority of people. According Huawei iLab data, compared with 2015, “VR” jumps 709% higher in 2016 on Baidu (Chinese Google)’s hot words.
And Beijing, Shanghai and Shenzhen, those big cities take nearly 50% of content consuming. 75.80% people they purchased VR headset due to their curiosity.
For example, I come from a secondary small city in northwestern China, which is the least developed part of China.
But when I got home this January, my father shared with me a link with a bunch of VR experience stores in our city. I went to one with my friends, and I was surprised that all these store have HTC Vive, Playstation VR and GearVR. (Facebook is banned in China, it makes sense I didn’t see any Oculus Rift)
I also saw some teenagers waiting in line to play Resident Evil 7. And it is super cheap, even for students, only cost us $3 USD playing for 1.5 hour.
However, the definition of VR/AR technology varies a lot from person to person. My father asked me the same question couple times:
What is VR?
And every time I had different answers with different examples. See there’s no ultimate definition that they can remember for customers, they define VR with their own experience and words they read or heard on Internet.
Besides, there’re way too many Chinese companies doing VR hardware in 2016, ranging from $1 USD cardboard to $700 USD high end devices like HTC Vive.
The customers don’t know how to select the right one for themselves.
Once they pick the wrong one, they will have a completely different, negative perspective on VR hardware and content, which decays the VR market.
In my opinion,
To guide people re-understand and re-experience VR/AR technology should come to the first place.
3. Technology
Current Chinese VR/AR technology is still based off the open source technology on Github, like Google VR SDK, Facebook Pyramid and etc. However, starting from 2016 and this year, you will see more Chinese startup improving these advanced technology.
I’m also one of them, we are improving encoding and decoding efficiency for livestream. During the recent tests, for 4K video, it’s 35% more encoding efficiency than Facebook Pyramid, and when it comes to higher resolution like 8K or 12K, the number could jump to 300%.
But the majority of Chinese market are currently still in the process of utilizing this technology, not improving or creating new ones.
Hardware
Because China has the world’s best manufactories with extremely low cost. There’re hundreds of companies building their own headset in 2016.
And all the content on each platform are exactly the same, which making it even harder for customers to choose what is the real and good VR content, what is just “edge ball” content, which they put you in a theater, and you just sit there watching a 2D film on the big screen in front of you.
Many companies have already realized that you cannot build the healthy VR ecosystem with only hardware devices, you need to create your own content, which is the key for attracting customers to your platform.
People won’t buy your headset unless you have the best content in the market.
So I also see many hardware companies started looking for cooperation and creating their own content. They are trying to tackle hardware, software, app development, content creation and distribution, the result usually is not that ideal.
As Gary Keller, the author of The One Thing says,
Extraordinary results happen only when you give the best you have to become the best you can be at your most important work.
Multitasking is a lie. This is why I think the companies trying to solve every problems are going to fail in 2017.
Software
I did a experiment: I simply search “VR” in Google Play Store, and a Chinese app store. It’s really easy to tell the difference if you do it too.
In Google Play Store, there’re only 4–5 content aggregation or VR tool apps, the rest are all independent games, which means there’re a lot of companies and developers are creating VR content.
When it comes to Chinese app store, it’s completely opposite. Only 4–5 apps are independent games, and they are developed by foreign companies and individuals, the rest of them are VR content platform supported by big firms like Youku(Chinese YouTube), LeTV (Chinese Netflix) and Xiaomi(The fourth giants after Tencent, Alibaba and Baidu).
Content is the king.
In 2017, I suppose there will be more and more content creators.
Others
Full body, or even positional tracking and gesture recognition, there’s not too much technical accumulation in China. We’re still imitating and catching up with the world first class technology.
4. Users
According Tencent’s data, I made a spreadsheet:
Generally users can be divided into these 3 types. VR Activist, just interested in VR and people who only heard about VR.
If you do the math, there will be at least 643.6 million people willing to spend more than ￥1,000 RMB ($150 USD) on VR devices, which generates ￥6.4 billion RMB at minimum. That’s nearly $1 billion USD.
Mobile VR
When it comes to Chinese market, not so many people like American adopters all have a Oculus or Vive. People simply just don’t like big heavy and inconvenient stuff like XBox and Playstation, as well as HTC Vive and Oculus. So I guess mobile VR must be the biggest market in China.
In 2015，Xbox and PS4 reached 2.4 million sales around world, but they only sold 550 thousand in China.
Based on data in 2016, China has 62.5 million smart phone users, even 1% of them decide to purchase in VR, that will be 625 thousand people.
In China, minority do not mean small number.
5. Big Events/Examples
At the end of 2016 and early this year, there’re many VR livestream big events in China. Today I will try to cover 3 most popular ones including Chinese New Year Festival, Double 11 Shopping Festival and Queen Wang Fei’s Music Concert.
1. Chinese New Year Festival
As you may know, Chinese New Year Show is one of the most popular TV show. In January, they invited VR technology into the show, synchronized the entire 5–6 hour show.
There are 3 different scenes and content showing to the auidence.
“Virtual Realitized” synchronized TAPED show
4 different cities‘ venues and scenery
Behind the Scene
According to the photo above, you might say I don’t think this is a fully 360 degree recorded video. Yes, it’s only 180 degree scene, because they cut the other half the of video. They said it’s boring watching audience eating and chatting there. (Except music festival, most of the concerts and shows, people usually are seated.)
So here comes my question:
If it’s boring, why using VR?
The reason I choose to watch in VR, is that I want to experience being around people, cheering and shouting for the team we love. I want that atmosphere.
If you are familiar with livelike’s FOX sports VR or NEXT VR’s livestream, you probably realize that when crop the other half 180 degree, they still keep the audience in your sight.
But Chinese New Year team completely took that away, I don’t see there’s a significance shooting it in VR.
2. Double 11 Shopping Festival
If you know Jack Ma’s Alibaba, you probably also heard he created the a shopping festival call Double 11, also known as Singles’ Day. On November 11th, billions of Chinese will go to Taobao and buy stuff even they don’t need, as if they are free.
In 2016, Alibaba hit ￥120.7 billion RMB, equals to $17.75 billion USD in just 24 hours.
They also invited VR/AR technology into this 24-hour shopping festival, they call it Buy+. And you will be on the tour travelling through the world famous shopping center.
You can go to NYC Macy’s for clothing, Japanese mall for makeup and Australian farm for milk.
You see some videos there allowing you to explore, but under most of the circumstances, it’s like using Google Maps’ Street View for shopping, which means they are static 360 degree photos, you can drag and drop the pin to walk around in the shopping mall.
3. Wang Fei’s Music Concert
Wang Fei is one of the hottest singers in China, people call her queen. On December 30th, 2016, her concert was shot in both OTT(Over the top content) and VR.
Normally the best camera spots will leave for traditional camera, but this time, VR camera got one of the best spots with a big screen on the back, audience can also see some details of Wang.
The camera they were using are Kronos and Zeus 360, shot in 8K, 75fps, and livestreamed in 4K, 3 DoF, with some comments and presents features on screen for audience’s interaction.
What’s more, the VR ticket costs only ￥30 RMB, which is only $5 USD, every body could afford it. However, I also saw some people complaining about the quality of this VR experience. There’s popular article named:
Queen Wang, Why We Can’t See You Face?
He started in VR, but then switched to traditional 720P livestream. Im his words, this concert is totally not worthy his 30 RMB.
According to one of the biggest CDN Akamai’s Internet speed report in Q2, 2016:
America: 15.3 Mbps
Korea: 27 Mbps
Hong Kong: 19.5 Mbps
— — World Average: 6.1 Mbps — —
China: 5.2 Mbps
Sorry, we are the one slowing the world down. I guess this is the reason why people hold different opinions on Wang’s VR livestream concert. Someone is watcing in 4K, others are watching in 240P. ??
6. Challenges
1. Comfort & Convenience
Most of Chinese headsets are not a pleasure to wear on for a long period of time. Besides, the low bit rate video content makes people feel sick after experiencing it. And it is never an easy task to switch to a different game in virtual reality.
According to iResearch’s report, when users are asked
What matters most in VR headsets?
Comfort comes at the first place with 46.0%, following screen resolution 44.3%, convenience 40.6%, good content 40.3%, precise control 40.0%, cool looking 18.3% and others.
2. The Quality of Content
At the beginning, there’s not much variety of content. They’re just VR games(including education, architecture app), 360 degree videos and livestream and social apps…
The quality of 360 degree videos varies a lot, which provides a rough experience:
I think everyone in VR industry is trying to find problems that ONLY can be solved in virtual reality. Because we all believe that
VR is definitely something more than what we think of now.
The best time for VR is still yet to come, but soon. So be prepared.
3. UX Design
Currently we don’t have enough interaction gesture or control in VR world. HTC Vive and Oculus those high end devices are doing pretty well, but I believe to make mobile VR more affordable and better designed, is the key of VR development.
Samsung Gear VR or Google Daydream already set up the standard for this industry, and those controllers works well. But once you want to write down something, it’s not a good experience.
Voice recognition, force feedback and holographic helmet mounted display, they are cool though, there’s still a long way to integrate them into VR interaction entries. And I’ll be there.
We are still groping and creating this new user interface in VR. But let’s be positive! ??
4. Hardware
As more cellphones start equipping Snapdragon 835 CPU and better QHD display and become “VR READY”, the heat problem may be solved in next few years.
But how should we make VR headset more portable to carry and comfortable to wear on, this remains a challenge.
My name is Zake Zhang. In 2016, I spent most of my time at an accelerator school called Watson University in Boulder, Colorado. It’s also where I found myself fascinated by VR/AR technology and started doing my own VR education project.
Currently I work at a startup focusing on improving facebook’s pyramid to solve rendering speed and latency problems in Shenzhen, China and Millbrae, California.
I hope this article can help you know more about Chinese VR market, and if you have more questions, please leave a comment below and I will try to answer all of them ASAP. ??
References
- 2016 VR Big Data Research — Huawei iLab
2. Wang Fei Livestream Concert Analysis — Huawei iLab
3. 2016 VR Market in China — iResearch Consulting
4. 2016 VR Risk and Ecology Report — Tencent
…and more (I can’t remember)…