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China VR spending to quadruple

News, 17 February 2016

BEIJING: Spending on virtual reality in China is forecast to almost quadruple in 2016 and to more than double again in 2017.

Figures from research firm Analysys International Enfodesk, reported by eMarketer, suggest that revenues from hardware, software, content and other services associated with virtual reality stood at just RMB180m ($28.9m) in 2015 but these are set to surge in the next couple of years.

The firm's 2016 China Virtual Reality Devices Research report predicted growth of 372% in 2016, taking VR spending to RMB 850m ($136m). This will slow to 154% in 2017 when total spending will reach RMB 2,160m.

eMarketer advised, however, that projected figures should be treated with caution since the eventual level of uptake of VR devices and associated content was not yet clear.

Separately, Lisa Cosmas Hanson, managing partner and founder of Niko Partners, put China's VR market at anywhere between $46m and $76m in 2016 with the potential to rapidly develop into a $1bn industry.

"The Chinese government sees VR as such a prominent segment that this year's ChinaJoy conference will have a special VR section," she told Fortune. "VR is very hot in China now."

ChinaJoy, or the China Digital Entertainment Expo & Conference, is a gaming and digital entertainment exhibition that takes place in Shanghai at the end of July. VR also featured heavily at the recent Taipei Game Show.

According to Hanson, low-end mobile VR devices are becoming popular with Chinese consumers; almost half a million Baofeng Magic Glass VR headsets were shifted in three months at the end of last year.

"Chinese gamers are extremely price sensitive, and therefore the higher priced products will have a tough time, but will be in high demand among a smaller subset of the gaming population," she said.

Another option for gamers could be a visit to a VR theme park - Shanda Group, a Chinese online gaming operator, recently announced plans to build the country's first.

Data sourced from eMarketer, Fortune, China Post, CRI English; additional content by Warc staff