Virtual reality set to take off in 2016, researcher says

Sales of virtual-reality devices will soar to 14 million in 2016 and jump to 38 million by the end of 2020, predicts research firm TrendForce.

Virtual reality is set to make a splash in 2016. And its ripples in the tech market will only grow as time goes on, according to a new study.

Virtual-reality device sales will hit 14 million units worldwide in 2016, providing a strong launch point for the category, according to data released Tuesday from the Topology Research Institute, a division of research firm TrendForce. Even though "few" will be sold this year, the firm expects sales to rise to 18 million units in 2017 and 22 million by the end of 2018. In 2020, sales could reach 38 million units worldwide, said TrendForce.

Virtual reality, or VR, has become a buzzworthy segment of the tech industry as major companies like Facebook-owned Oculus, HTC, Samsung and Sony all dive into the emerging market. Virtual-reality devices, typically headsets, immerse users in three-dimensional worlds, letting them look around and feel as if they're in another place. Initially, the chief use for virtual reality is expected to be gaming.

Sony's Project Morpheus will be among the VR devices hitting store shelves next year. James Martin/CNET

Virtual-reality games require less resources to produce than virtual-reality movies, according to TrendForce. "First-person games in particular can be ported to VR devices with some modifications," the firm said in a release Tuesday. "The relatively low costs and minimal time requirement thus will be strong incentives for game developers as they will become major content providers for VR hardware."

Last month, HTC marketing chief Jeff Gattis said that 2016 will be "critical" for the VR industry. HTC plans to have its own Vine virtual-reality headset on store shelves in 2016 (though it may launch later this year). When it does launch, the Vine will face a slew of competitors, including the highly anticipated Oculus Rift and Sony's Project Morpheus. Several other companies also plan to soon offer virtual-reality products.

Since gaming will be the first major application for VR, easy access to video games that gamers actually want to play could prove critical. Last month, Avi Greengart, an analyst at Current Analysis, said in an interview that games will need to justify an investment in devices that promise to be expensive.

"Next year will be the debut of extremely expensive new game consoles," he said, referring to VR headsets that could cost more than devices like Microsoft's Xbox One or Sony's PlayStation 4. Although most companies haven't announced pricing, some reports suggest high-end products, like the Oculus Rift, could cost as much as $1,500.

In the future, virtual reality is expected to expand beyond gaming. Virtual-reality movies, which will pull viewers into the environment of a film, will eventually make their presence felt.

"It has to go beyond gaming," Gattis said last month. "Entertainment will be key." He added that when the industry finds a way to make VR titles a legitimate entertainment option, it'll allow the market to become "less niche and [go] mainstream."

TrendForce said the success of virtual reality will ultimately be driven by profit in the hardware space. As soon as market "participants have achieved concrete sales results and made profit," the firm said, a growing number of "content services for VR hardware" will be made available.

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