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VR Excitement Index: 10.2
Virtual Reality

While we are big believers in virtual reality, along with many in the tech space, public perception of it is still a question mark. VR is far from mainstream with only a few million users globally today. We developed our VR Excitement Index to measure and track the average consumer’s interest in virtual reality. We asked over 500 US consumers about topics ranging from their interest level in various VR use cases to what’s held them back from trying VR. Then we distilled the data down to an index value that we will publish regularly. An index value of 100 suggests widespread usage of and peak excitement for VR; an index value of 0 suggests no public interest in VR.

So, what does a VR Excitement Index value of 10.2 mean? We think it quantifies consensus thinking that “VR is in its early stages”. We’re probably at the bottom of the first or top of the second inning. There’s a lot of game left to be played.

To that point only 1 in 10 US consumers have tried VR with a limited few trying more than one type of headset. Samsung’s Gear VR platform is the most widely used platform, which we view as surprising given that there are significantly more Google Cardboard units in the wild. The reason for the gap may be that Samsung, along with many US retailers and carriers, have made efforts over the past year to promote the VR as a must have gadget for Galaxy smartphone owners. By comparison, Google Cardboard is not as well-known as a consumer brand and, given most Google Cardboards are made out of cardboard instead of plastic, they might end up being recycled.

Access to VR headsets is the biggest limitation to consumer’s trying it. Of those who have not tried VR, 45% say that it’s because they don’t have access to a VR headset. Price isn’t a dominant concern – only 25% indicated that price is holding them back from trying VR. 36% of consumers say they simply aren’t interested in VR.  These consumers may be harder to convince longer term, but also are likely the typical tech late adopters and not core to the success of VR.

Breaking down interest by use case, we were surprised to see that gaming was not at the top of the list. Highest interest lies in entertainment (movies, television and other passive VR content), training and education, and gaming, in that order. Perhaps freely available content from YouTube and the New York Times’ NYTVR is driving user interest in entertainment. While interest in any single VR use case did not exceed a 6 on a 10 point rating scale in our survey, we expect this rating to rise as better content becomes mainstream. The first “blockbuster” VR movie would likely generate a significant increase in consumer interest.

Mild interest across the board for VR use cases isn’t all that surprising. We think the data underscores VR’s early stages, while showing healthy signs of adoption and interest. For now, entertainment lies at the center of the VR value proposition for the average consumer, but gaming will provide the carrot for hardcore users that drive the technology forward. The high level of interest in training and education in a virtual environment was also surprising. Perhaps it’s driven by the fact that in-person training is usually so boring. It’s also terribly inefficient and costly – all of which VR will improve.

To recap, we see three drivers to near-term VR interest:

  1. Improving consumer awareness – see Samsung Gear VR’s holiday campaign
  2. Increasing the amount and quality of VR entertainment content
  3. Headset adoption

We’ll update the VR Excitement Index regularly as we track the progress of the VR theme on the road to 100.


Disclaimer: We actively write about the themes in which we invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.  

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