Pico recently raised its VR equipment sales target, and China’s VR duration sales may maintain rapid growth in 2022: according to wellsennxr report, Pico’s global shipments in the first quarter of 2022 were about 170000 units, with a market share of about 6.18%, and iqiyi’s global shipments were about 23000 units, with a market share of about 0.84%. After the acquisition of Pico by bytewo, Pico’s sales volume has recently increased and its annual sales forecast has been raised due to its platform traffic support and marketing of promotional activities. We believe that Pico is currently expanding rapidly by relying on bytewo’s traffic and capital advantages to realize the laying of online Tiktok + offline physical store sales channels. According to IDC’s prediction, global VR equipment shipments will increase by 43.6% year-on-year in 2022. In 2021, Chinese VR manufacturers such as Pico, adventure and Nolo successively launched consumer VR hardware products to accelerate the iteration of VR hardware; Recently, Tencent plans to acquire Black Shark VR hardware and Dapeng may launch consumer VR products. It is expected that the price threshold of consumer VR products will continue to decrease, the penetration rate of VR hardware is expected to further increase, and the sales volume of VR market in China may maintain rapid growth.
Game application is an important part of VR content ecology at present, and comprehensive applications such as overseas social networking, office and metauniverse are rising: meta has cultivated a content ecosystem with a virtuous cycle through years of support in capital, technology and platform, and successfully incubated many popular VR games and applications, For example, in the early stage of the epidemic, with the rise of overseas home fitness demand, several fitness VR applications including supernatural and fitxr were favored. Recently, 12 VR games including social werewolf killing among us and Football NFL were announced. With the maturity of VR content ecology, meta has gradually shifted its focus to comprehensive applications such as social networking, office and metauniverse, and taken similar measures to support the developers and content ecology of its next-generation social platform horizon worlds. The Horizon team will successively support a series of metauniverse portals with different configuration requirements, such as web pages, smart phones and game console pages, so as to realize phased access to metauniverse scenes. We have set up a social center to benchmark the construction of meta social ecology. It is suggested to continue to pay attention to the development of VR social ecology in China: Pico mainly introduces games verified by Quest platform, such as multi in one sports VR and VFC fighter, and learns from meta to build a positive cycle of VR content ecology from both technical and financial aspects, However, at this stage, the application quantity and quality of Pico store are still different from those of mainstream VR game stores. Pico’s VR content ecology is still in the initial stage of construction and needs the company’s continuous investment and support; In terms of social networking, the recent recruitment information shows that Pico is currently setting up a social center, which is expected to create a differentiated content ecological pattern by learning from Quest’s layout in social content; In contrast, iqiyi, the flagship model Adventure 3 released last September, pays more attention to the content needs of VR core game users. After activating the first batch of users with high-quality free games and punch in plan, iqiyi continues to provide high-quality game content, including after the fall, the first 3A VR action FPS game in China. Therefore, we believe that in terms of content ecology, hardware companies represented by Pico and iqiyi have not formed a complete self-developed content ecological chain, focusing on introducing overseas high-quality game content and creating applications with social attributes; China’s leading game manufacturers such as Tencent and Netease may accelerate VR game research and development and overseas high-quality VR game agents. In the long run, China’s major game manufacturers have good R & D strength and high-quality game IP. It is expected that monopolizing popular game content may become a key factor in the change of industry competition pattern in the future. Therefore, it is suggested to continue to pay attention to the online game situation of China’s VR stores and China’s major manufacturers such as Tencent Netease’s progress and layout in the R & D and agency of VR games. Panoramic video and sports fitness are important application scenarios for VR in China: Pico has launched several official movie watching software and video players, and iqiyi has built a VR zone to provide VR movie watching services for users of the whole platform by relying on the advantages of the video platform. In addition, go now (with snh48 public performance copyright), Tiktok, CCTV TV, BiliBili, douyu Applications such as xiguguo (with the copyright of variety arts such as “this is street dance”) provide VR panoramic viewing function. Recently, due to the repeated epidemic in many places in China, the demand for fitness VR applications deserves attention. Although Pico store currently has 17 sports and fitness games, including “multi in one sports VR”, at present, overseas popular home-based fitness applications such as “supernatural” have not been introduced into Chinese VR stores. Recently, the number of viewers of the follow-up fitness live broadcast represented by Liu Zhenhong on the Tiktok platform has exceeded 10 million, and the VR form of follow-up fitness application has been verified in the overseas market as early as the initial stage of the epidemic. Therefore, there is still a great demand in the field of VR follow-up fitness content. It is recommended to pay attention to the launch of overseas popular applications in China and the layout and R & D of Chinese game manufacturers in the field of VR fitness. With the continuous investment in VR hardware by leading companies worldwide, including Sony, valve and Tencent, we believe that the production and OEM of relevant VR equipment hardware are expected to be produced by Chinese VR equipment OEM / ODM enterprises. It is suggested to focus on China’s VR equipment industry chain, such as Goertek Inc(002241) , Shunyu optics, BOE, etc. In addition, we expect that the demand of VR / AR applications for content other than social and fitness games will gradually increase worldwide. Overseas, we suggest paying attention to the latest progress of meta social metauniverse horizon worlds and the birth of popular VR exclusive games under quest content ecology; In China, we suggest to focus on large game manufacturers such as Tencent and Netease to deeply layout the VR hardware industry chain and companies with VR game R & D and agency capabilities. Suggestions: 1) Internet giants with existing hardware layout, such as Tencent and byte beating; 2) Look forward to the traditional game manufacturers with VraR layout, such as Netease, MIHA tour, etc; 3) Game companies with good accumulation in the field of content and IP, such as Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , Perfect World Co.Ltd(002624) , Chinese mobile games, etc.
Risk tips: VR head shows the risk that the volume of goods is lower than expected, the impact of repeated local epidemics on China’s VR supply chain and manufacturing industry, the risk of changes in market competition pattern, the risk of stricter supervision of VR game industry, the risk of less than expected channel construction, and the risk of less than expected technological innovation.
