Download - SVVR 2016 - The Business Of VR (4.28.16)
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THE BUSINESS OF VRAPRIL 2016Sivan I ram
s i van @r i ve r. co@s ivan i r am
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“…a new computing platform always
emerges every 10 or 15 years…”—Mark Zuckerberg, 2/28/16
Internet1995
Mobile2006
VR2016
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APPLICATIONS
Music Social Live Sports Games Journalism Real Estate
Entertainment Training Retail Health Education Productivity
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Virtual Reality Market Forecast
$150Bnmarket
Augmented and Virtual Reality market to hit $150 billion revenue by 2020. [Digi=Capital Report]
13,000%growth
Virtual Reality Market Expected to Grow by Over 13,000% in next 3 Years, Nearly 5 Times faster than the iPhone. [Kzero.co.uk]
12.2mheadsets
12.2 million VR headset devices to be sold in 2016. [Piper Jaffray] 7.7bn
software
Cumulative VR software revenue from 2014 to 2018 estimated at 7.7bn. [Kzero Report]
References: www.digi-capital.com piper2.bluematrix.com www.kzero.co.uk
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INVESTORS ARE MOVING IN
AR/VR Investment ActivityQ1’12-Q4-15
Stock Changes In Last 3 Months
17%
30%
13%
16%
42%
$2B $56M $35.5M
$100M $38M $22M
BIGGEST Deal
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TECHNOLOGY ADOPTION RATE
Electricity Telephone Radio TV PC Mobile Phones
Internet Smart Phones0
5
10
15
20
25
30
35
40
45
50Time To 25% Market Adoption (US)
1900 1950 2000
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• First mobile phone invented
in 1983, it took 13 (!) years to
become commercially available.
• It took smartphones 6 years to reach the early majority.
• If we begin the count with the
release of the Oculus DK1 (3/13), it
early majority adoption will occur in
2019.
• We believe VR would be sooner.
SMARTPHONES ADOPTION RATE
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CONSUMER PRICE POINTSHeadsets Content
$800
$400
$99
$30
$10
Free
Vive
Rift
PSVR
Gear VR, Merge VRSmart VR
Cardboard, Go4D
Magic Window
ViveViveRift, ViveRift, Gear VR
Cardboard, All
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“The High Cost Of Pricing Low”• Don’t only think about device cost, think Customer
Lifetime Value
• Consumer $ supports content development
• Apple users spend on content 4x compared to Android users - $200 vs. $50 (Fortune 2014)
• Premium prices on devices preserved on content and accessories
Pricing headsets low democratizes access, but also anchors low perceived value.
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VR ENTERTAINMENT DISTRIBUTION
• Free for users• Maximum exposure
• Ad-rev model• Requires user volume
User Generated Content (UGC)Marketing
Free Content For Consumers
• Paid by consumers• VOD/Subscription
Film, Music, Sports
Premium Content (Paid)
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SUMMARY• Every major tech company is investing in VR, and the
market values it. Early consumer signals are STRONG
• The fact that mass consumer adoption is “4-5” years away, doesn’t mean we can’t build great valuable businesses TODAY
• Not all content is equal. Some content should NOT be free.
• Don’t be pressured to eliminate margins to “force” adoption
• Build KILLER apps. Think 10x experiences
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Q&A1. Reach out: [email protected], @sivaniram2. Download our app: RiverStudios (Available via AppStore & Google Play)
3. Visit our website: www.river.co4. Tweet about us: @RiverVR