(Chinese Version)

Just a couple of weeks ago, the VR section was having an extremely well performance on the A-Shares market (Shares in mainland China-based companies that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange.) On November 19th, the VR section jumped by 9% with around 20 stocks reached the limit-up.

Pushed by the global VR industry, the VR market in China also becomes hot as its stock market performance shines. Samsung recently launched its consumer product in the line of VR, dubbed as “the gear VR”. The forerunner of the VR industry, Oculus, is going to launch their consumer product Rift, a VR helmet, soon as well. And in China, Chinese VR maker 3Glasses will roll out its beta version of VR helmet series.

Everything seems to be indicating that VR products for the consumer marker are indeed coming. But, are Chinese VR companies ready for this turning point?

Most VR products in China are currently designed for developers, and people barely buy them despite their low price

VR is not something new as a number of Chinese companies have already entered this field and launched products of their own.

When you search the key word Virtual Reality on an e-commerce platform, you will find relevant products are already quite affordable. There are even lots of VR products that are priced at around one hundred RMB. For example, Baofeng’s Mojing is priced at 99, and the most expensive model from Baofeng is no more than 500 RMB.

The affordable price lowers the threshold for consumers who want to experience VR technology. However, this doesn’t necessarily mean that VR products have become consumer-level merchandise. It’s reported that at present most VR products in China are designed for developers except for Baofeng Mojing. Other manufactures haven’t made their shipment figures public yet. Our journalists have been digging around and asked a few manufacturers, and we learned that the numbers didn’t look good. “A shipment rate of no more than a couple tens of thousand is very rare in the industry,” founder of Glasoo, Zhao Shanshan, commented.

Giants like Samsung and Oculus etc. are now targeting the consumer market and Chinese VR makers are not far behind. Qin Kai from seasoned Shenzhen-based VR company 3Glasses’s brand strategy department introduced that next year 3Glasses would launch a VR device for the consumer market in order to test the water. “This is a consumer VR product to test the reaction from the market,” he said. “But still it’s not the product for ordinary consumers yet.” 3Glasses started to study and develop VR helmets since 2012 and had completed its R&D on its first generation product, 3GlassesD1. The company’s second-generation product 3GlassesD2 is also ready to be launched. “The issue of sharpness and delay rate is the biggest difference between consumer products and developer ones,” Qin Hao further explained. “Consumer products will have better lens, optics algorithm, and vision compatibility compared to that of developer versions.”

A little known fact here is that VR products have relatively high technical thresholds. “Making a VR product is not just about developing some high-tech glasses or a helmet,” Peng Fan, co-founder of 7invensun that dedicates to the field of eyeball movement tracking technologies, said. “3D reconstruction technique, which is very essential in the VR sector, is something that Chinese companies are lagging behind in.”

“Even in terms of hardware, we are also behind international heavyweights,” Qin Kai stated. “Even if we can make great hardware now, we still can’t accomplish commercialization.” The current industry chain is far from mature, and therefore it’s very difficult to have mass production, let alone maintaining a good quality.

The cost of developing is even higher than mobile gaming content, the lack of good content still haunts the industry

“Consumers pay not only for the hardware, but also the content. Without an adequate amount of good content, there’s no way of attracting more consumers,” VR industry insider He Wei stated. When VR products are finally entering the consumer market, there must be enough great content to support the development.

“The advance of VR technologies is an revolution in the information world. We are empowered to develop a new form to tell stories,” this is how Zhao Shanshan sees VR. At present, VR companies in China don’t really pay much attention to the content. In contrast to the field of hardware, the content sector is seemingly abandoned.

Hardware makers all know at heart that the game-changer in the future VR market would be the content. That’s why they have already started to deploy their industry layout long ago. Qin Kai stated that 3Glasses would cooperate with Mili Pictures to develop Dragon Nest’s VR version. Besides that, 3Glasses is also coopering with many other VR game developing teams to make exclusive games. 3Glasses is going to release its VR movie trailers next year in partnership with several film companies.

Let’s look at the gaming content as an example to further elaborate on this obstacle the VR industry has to tackle. At present it’s expensive to develop a VR game for the fact that developers nowadays still don’t possess enough experiences in making original VR content and interactive design, meaning they literally have to start from scratch. “If we were to convert an existing 3D game into a VR game, then the interactive design, gameplay mechanism, and the vision of the player etc. would need to be modified in accordance with the VR hardware. In some way it’s like you have to start all over again. That’s why the cost goes higher.”

A developer from the gaming sector explained further with an example: a team that has 30 developers will need 6 months and around one million RMB fund to make an original VR game, but as for developing a mobile game, the needed fund and time will be just half of that cost. Due to the high development cost and the uncertainties in the market, big companies like Tencent, NetEase, and 360 are still observing the situation instead of stepping in. Most companies in China that actually conduct VR R&D are small and mid-sized startups.

“The concept of VR became popular in such a short time, leaving so little time for hardware makers or content developers to catch up,” Fang Xiangyuan, co-founder of Time VR said, looking a bit disappointed. “Whether it’s in China or worldwide, we still haven’t seen any VR game that qualifies as good. Since the VR hardware sector is still gaining momentum, there’s no guarantee that any VR games could become popular.” On November 23rd, Fang Xiangyuan and his team at Time VR developed a VR game called Finding, which was launched on the gearVR platform. It’s reported that on gearVR there are only two games are from China.

Capital prefers hardware over content, consumer VR products still have a long way to go

Industry insider revealed that VR products’ future in the consumer market lies in two factors: the maturity of hardware and the cost; the maturity of the ecosystem. So far the VR industry in China possesses neither of these two important advantages.

“The Chinese VR industry is still in the learning phase, which means Chinese VR companies are short of knowledge in relevant technologies and the ability to execute. And there isn’t any clear business model yet,” Qin Kai said. Anyhow, the VR sector is still a very promising investment target in the eyes of investors. “The VR industry has come near the point where the industry will start to boom at a rocket speed, but it remains unknown whether the industry could enter the golden age or not next year. Everything depends on whether the progress and development the industry has made and will achieve can support a sudden golden age,” an investor from Addor Capital stated.

So far investment organizations tend to focus more on companies that develop hardware instead of content. Addor Capital, for instance, has invested tens of millions of RMB in hardware makers. An industry insider revealed that the long development cycle was at fault for this phenomenon. The worst part is, without investment, it’s impossible to make contents that can attract consumers.

From the stone age to the Internet era, from 2D media to 3D animation, and eventually we have virtual reality. The world made humans, and humans are shaping the world with the tools in their hands. And now, the tools we use are shaping our sensory experience. “Virtual reality is the ultimate form of media. The ideal VR products for the consumer market in the future should be as small as glasses people nowadays wear. At present, VR products are just like all those cellular phones back in the 90s,” this is the ultimate expectation Fang Xiangyuan has from VR products geared toward consumers.

Cutting-edge technologies and progressive industries more or less face similar obstacles. And the VR industry is just like the Internet industry 10 years ago, struggling, but promising.

(Like our Facebook page and follow us now on Twitter @tmtpostenglish and on Medium @TMTpost.)

[The article is published and edited with authorization from the author @ITtimes, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at ECHO), working for TMTpost.