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Virtual Reality - UK - December 2017

“The market for VR headsets is growing rapidly but limited advertising has left awareness relatively low. New product launches, simpler set-up processes and falling prices will continue to boost take up, while innovative out of the home VR experiences are expanding. The key long-term will be creating engaging content that offers experiences other media cannot, capitalising on people’s initial curiosity and transforming it into regular use”.

– Adrian Reynolds, Consumer Technology Analyst

This report examines the following issues:

  • Awareness and direct experience are the priority for VR
  • High prices have limited take-up, particularly among Millennials
  • VR experiences outside the home are key to market growth

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Revenues growing rapidly despite declining average prices
              • Figure 1: Virtual reality market, 2016 and 2017
            • Launch activity and innovation
              • Facebook looks to take VR mainstream with standalone headset
                • Free-roaming VR set to launch in the UK
                  • IMAX opens dedicated VR centre in Manchester
                    • The consumer
                      • Over three quarters of people have never used VR
                        • Figure 2: Recent VR Headset use, October 2017
                      • Popularity of home use offers opportunities for headset sales
                        • Figure 3: Location of VR headset use, October 2017
                      • Two thirds of Millennials interested in VR films
                        • Figure 4: Interest in VR activities, October 2017
                      • The majority of people are interested in a range of VR applications
                        • Figure 5: Repertoire of interest in VR activities, October 2017
                      • Interest in VR is strong given the lack of advertising spend
                        • Figure 6: VR headset purchase plans, October 2017
                      • Cultural experiences could benefit from VR offerings
                        • Figure 7: Attitudes towards VR, October 2017
                      • What we think
                      • Issues and Insights

                        • Awareness and direct experience are the priority for VR
                          • The facts
                            • The implications
                              • High prices have limited take-up, particularly among Millennials
                                • The facts
                                  • The implications
                                    • VR experiences outside the home are key to market growth
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Revenues growing rapidly despite declining average prices
                                            • Processing power innovations driving VR quality
                                              • Price cuts to headsets and big sale events driving demand
                                                • VR advertising spend growth will boost consumer awareness
                                                  • Free content boosting interest in VR
                                                    • Football set to drive interest in VR
                                                    • Market Size

                                                      • Growing competition in the VR market
                                                        • Revenues growing rapidly despite declining average prices
                                                          • Figure 8: Estimated value and volume sales of virtual reality headsets, 2016 and 2017
                                                          • Figure 9: Virtual reality market, 2016 and 2017
                                                      • Market Drivers

                                                        • Processing power innovations driving VR quality
                                                          • Sony pushes VR content at Paris Games Week
                                                            • Figure 10: Sony’s PlayStation VR ‘Starter Pack’
                                                          • Price cuts to headsets and big sale events driving demand
                                                            • Free headsets to drive smartphone sales
                                                              • Football set to drive interest in VR
                                                                • Free content boosting interest in VR
                                                                  • VR advertising spend growth will boost consumer awareness
                                                                    • Immersive nature of VR offers new opportunities for advertisers
                                                                    • Launch Activity and Innovation – What You Need to Know

                                                                      • Facebook looks to take VR mainstream with standalone headset
                                                                        • Free-roaming VR set to launch in the UK
                                                                          • Google launches Daydream View 2
                                                                            • IMAX opens dedicated VR centre in Manchester
                                                                            • Launch Activity and Innovation

                                                                              • Facebook looks to take VR mainstream with standalone headset …
                                                                                • Figure 11: Oculus Go headset, scheduled for release in early 2018
                                                                              • … with an HTC launch also imminent
                                                                                • Google launches Daydream View 2
                                                                                  • Figure 12: Google’s Daydream View 2 headset
                                                                                • Free-roaming VR set to launch in the UK
                                                                                  • Figure 13: Ghostbusters Dimension ‘Hyper Reality’ experience
                                                                                • Logitech working on VR keyboards
                                                                                  • Figure 14: Logitech’s ‘Bridge’ keyboard for VR
                                                                                • IMAX opens dedicated VR centre in Manchester
                                                                                  • Figure 15: ODEON’S IMAX VR centre in Manchester
                                                                              • The Consumer – What You Need to Know

                                                                                • Over three quarters of people have never used VR
                                                                                  • Men are twice as likely to own a VR headset
                                                                                    • Popularity of home use offers opportunities for headset sales
                                                                                      • Intention to buy is strong given the lack of advertising
                                                                                        • Two thirds of Millennials are interested in VR films
                                                                                          • Gaming will remain a key factor in VR expansion
                                                                                            • Large proportion are interested in a VR arcade
                                                                                              • Falling prices will present strong opportunities among Millennials
                                                                                              • VR Headset Usage

                                                                                                • Men are twice as likely to own a VR headset
                                                                                                  • Over three quarters of people have never used VR …
                                                                                                    • Figure 16: Recent VR Headset use, October 2017
                                                                                                  • … rising to 82% of women who have never used VR
                                                                                                    • Parents and Millennials the most likely VR users
                                                                                                      • Figure 17: Recent VR use, by demographics, October 2017
                                                                                                  • Location of VR Use

                                                                                                    • Popularity of home use offers opportunities for headset sales
                                                                                                      • Men twice as likely to use VR cinema and theatre
                                                                                                        • Presence of children more likely to make people seek out VR
                                                                                                          • Figure 18: Location of VR headset use, October 2017
                                                                                                        • A third of Millennials have used VR in two or more locations
                                                                                                          • Figure 19: Repertoire of VR headset use locations, October 2017
                                                                                                      • Uses of VR

                                                                                                        • Two thirds of Millennials interested in VR films
                                                                                                          • Gaming will remain a key factor in VR expansion
                                                                                                              • Figure 20: Interest in VR activities, October 2017
                                                                                                            • Interest in VR live sport may be short-lived
                                                                                                              • A quarter of people are interested in using social media VR
                                                                                                                  • Figure 21: Interest in VR activities, by selected demographics, October 2017
                                                                                                                • Shopping could be a big VR market for Millennials
                                                                                                                  • VR and 360-degree video a natural progression for holiday market
                                                                                                                    • Figure 22: People ‘very interested’ in VR activities – all respondents and Millennials, October 2017
                                                                                                                  • The majority of people are interested in a range of VR applications
                                                                                                                    • Figure 23: Repertoire of interest in VR activities, October 2017
                                                                                                                • Intent to Buy

                                                                                                                  • Interest in VR is strong …
                                                                                                                    • … but increasing intent to buy will require more direct experience
                                                                                                                      • Figure 24: VR headset purchase plans, October 2017
                                                                                                                    • Men twice as likely to buy VR headsets in the next year
                                                                                                                      • Technologically engaged Millennials most likely to be early adopters
                                                                                                                        • Parents are showing a strong intent to buy
                                                                                                                          • Figure 25: VR headset purchase plans, by selected demographics, October 2017
                                                                                                                        • Most VR customers intend to buy high-end headsets
                                                                                                                          • Figure 26: VR headset purchase plans, by brand, October 2017
                                                                                                                      • Attitudes towards VR

                                                                                                                        • Cultural experiences could benefit from VR offerings
                                                                                                                          • Most VR users do not find the experience isolating
                                                                                                                            • Four in 10 interested in VR arcades
                                                                                                                              • Figure 27: Attitudes towards VR, October 2017
                                                                                                                            • Over half of people have been put off by high prices
                                                                                                                              • Product awareness is a key issue
                                                                                                                                • Second-generation and standalone headsets could boost take-up
                                                                                                                                  • Launches from key games franchises will boost interest in VR
                                                                                                                                    • Figure 28: Attitudes towards VR of those not owning headsets, October 2017
                                                                                                                                • CHAID analysis – Attitudes towards Virtual Reality

                                                                                                                                  • Methodology
                                                                                                                                    • VR headset price premiums are putting off young Millennials
                                                                                                                                      • Figure 29: Target groups based on attitudes towards VR headsets – CHAID – Tree output, October 2017
                                                                                                                                      • Figure 30: Target groups based on attitudes towards VR headsets– CHAID – Table output, October 2017
                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                      • Abbreviations
                                                                                                                                        • Consumer research methodology

                                                                                                                                        Virtual Reality - UK - December 2017

                                                                                                                                        US $2,552.20 (Excl.Tax)