2016 will be a breakthrough year for virtual reality (VR) in the video games industry, according to the latest Global Entertainment and Media Outlook from PwC.
This year sees the release of the first high-end consumer-ready VR headsets from Oculus, Sony and HTC, with others set to follow, the report said. These new devices could transform the video games sector.
Although such devices will initially be the preserve of serious gamers, the quality of experience they offer is likely to trigger wider consumer uptake in 2017 and 2018.
But PwC noted that the content-based business models for VR devices will take longer to develop, and significant revenues are unlikely to be seen until at least 2018.
The report also said that 2016 will see existing online/microtransaction business models expanding to new markets — opening up new ways to play and new advertising opportunities, and helping global revenues from online/microtransaction PC games to grow at a compound annual rate of 6.7%, reaching $28bn (£20bn) by 2020.
Looking at the wider entertainment and media industry, PwC expects global revenues to rise at a compound annual rate of 4.4%, from $1.72tn (£1.2tn) in 2015 to $2.14tn (£1.5tn) in 2020.
In the UK, the entertainment and media industry is predicted to overtake Germany in 2017 to become the largest in Europe, the Middle East and Africa (EMEA). By 2020, PwC believes the UK’s entertainment and media industry will be worth £68.2bn compared to Germany’s £61.3bn.
Phil Stokes, UK head of Entertainment & Media at PwC, said:
“Advertising revenues are driving this growth, as the industry identifies new ways of measuring and tracking performance in a connected, mobile and digital world. Internet access combined with tablet and smartphone penetration has created a golden age for individuals interacting with media and the appetite of UK consumers shows no signs of slowing.
“It’s increasingly clear that consumers see no significant divide between digital and traditional media: what they want is more flexibility, freedom and convenience in when and how they consume any kind of content.”