Virtual reality (VR) – as the name suggests – is a product which merges a real life experience with that of a virtual world.
Though the technology has been discussed for years, the 2016 Consumer Electronics Show (CES) held in Las Vegas this month showed that VR is going to be very much a reality for shoppers this year (excuse the pun).
Well-known headsets such as the Oculus Rift, Sony Playstation VR and HTC Vive were all on display at the show in the build up to their retail release date.
The Oculus Rift headset
Oculus Rift will retail for US$599, while the prices of the other two have not been announced – although it’s expected the Playstation VR will be on the lower end of the price spectrum, while HTC Vive has been described as a premium product.
New Zealand consumers had their first taster of the virtual reality market last year in May when the Samsung Gear VR Innovator Edition was released.
Noel Leeming was the first to begin stocking the product, and was then joined by other tech retailers like Harvey Norman and JB Hi-Fi.
At the time, Noel Leeming general manager of merchandise Jason Bell said virtual reality products were still in the early adopter stage. “This is the first real consumer product we’ve seen in New Zealand come through,” he says. “But if you look globally, the forecast is quite staggering in terms of how big the market is going to get.”
The market is expected to escalate quite radically. Deloitte Global has predicted that virtual reality products will have their first billion-dollar sales year in 2016.
This will be comprised of US$700 million in hardware sales of the technology and the rest from content, with sales of about 2.5 million VR headsets and 10 million game copies.
So, how will the New Zealand market react to this technology hitting the shelves?
New Zealand Deloitte partner Paul Brabin says New Zealanders tend to warm to new technology pretty quickly, so virtual reality should be no different. “We’re early adopters of technology and have a really strong technology innovation sector in New Zealand. It’s a good market too because we’ve got a cross section of people who use technology, so most of the global consumer brands see us as a good place to test retail and brand launches.”
He says with the number of competitors in the tech retail market in New Zealand, virtual reality products could be a unique way to draw customers in. “Retailers are constantly challenged around how they differentiate against competitors and create something unique for the in-store experience, especially with online retailing versus the retail store experience. Virtual reality is one of these products that truly does tap into the excitement factor around technology,” Brabin says.
“From a customer experience point-of-view, it’s fantastic, right?”
Though some may balk at the steep price point of VR headsets, Brabin says they are placed within the aggressive price range of most other tech products people spend money on.
“The price of tech has come down quite rapidly in the past five years,” he says. “If you look at some of the discussion that comes out of those innovating in the tech space, virtual reality is in that price range of $500 to $800, relative to what other people might spend on other tech items like mobile devices.”
However, in Deloitte’s aforementioned 2016 predictions for VR, the company warned there is “considerable hype” surrounding it. It used the example of Google’s Google Glass, which was considered by many to be a failure as the search engine giant halted the glasses' sales in January last year.
“Recent breakthrough technologies that required consumers to wear something on their face have not proven to be mass market successes. While VR headsets may sell better than smart glasses or 3D TV glasses, also consider that using the technology may require a set of behavioural changes that the majority of people do not want to make,” the prediction said.