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Virtual Reality Market: The New Headset

Table of Contents

Introduction
Opportunity Recognition
Customer Profile Analysis
Assumptions Testing and Validation
Value Proposition
Conclusion
References

Introduction

This report describes a new virtual reality headset that will bring an innovative experience to the customers. Instead of projecting the picture to ones eye, it will project the image directly to the brain creating a dream-like experience. The value proposition of the concept includes four key characteristics. First, the new product will be unique since it will be an innovative device that has never been produced before. Second, the price of the headset will be low in comparison with its competitors. Third, the headset will be comfortable, as the person will not have to wear it to start using it. Finally, customers will be able to use the headset with any platform.

This paper includes four key sections, including opportunity recognition, customer profile analysis, assumptions testing and validation, and entrepreneurial solution. First, the report describes and justifies the problem it aims at addressing. Second, an in-depth analysis of the potential target customers is provided. Third, a critical discussion of the central assumptions, such as the problem, pain points, the market, customers, and key technologies. Fourth, the key elements of the business that will distinguish it from the competitors are discussed. The report is concluded with a brief summary of the crucial points.

Opportunity Recognition

The new headset will compete in the virtual reality (VR) market as it is the closest analog of the device. The VR market is one of the most promising markets in the world, as it was projected to grow at a CAGR of 19.0% between 2021 and 2027 (Valuates Reports, 2021). The Business Insider reported that even though VR has been around for more than 20 years, it has not reached the expected success (Huang & Webb, 2021). In other words, despite significant advances in VR technology, it is still envisioned as the future of entertainment rather than being the present.

There are several pains the customers experience associated with using VR headsets that prevent VR headsets from being widespread. First, the VR headsets are costly, as the entry models are at least $500, with the professional kits being around $1,000 (Huang & Webb, 2021). Second, the VR headsets are very platform-specific, which limits the customers opportunity to use it with different games (Huang & Webb, 2021). Finally, the headsets are often large and uncomfortable to use, which leads to decreased customer satisfaction. The new headset is expected to address all three of the identified problems by using innovative technology.

Customer Profile Analysis

The audience that utilizes virtual reality is diverse; however, there are certain trends in demographics and the purpose of use. First, it should be mentioned that VR is enjoyable for all generations, which implies that the target audience can be of any age (Leibach, 2015). Sánchez-Cabrero et al. (2018) stated that the users of VR were aged between 35 and 42 most frequently, as they could afford the headsets. However, it is generally believed that younger generations, such as Gen Y and Gen Z (Leibach, 2015).

Second, it should be mentioned that VR is used primarily by males rather than females. A study by Sánchez-Cabrero et al. (2018) revealed that 80% of VR users were males. Third, the analysis revealed that the customers use virtual reality for gaming rather than watching movies or PC use (Sánchez-Cabrero et al., 2018). However, it should be noted that none of the females reported using VR for gaming (Sánchez-Cabrero et al., 2018). Finally, the majority of users reported that they use VR only occasionally or once a week.

In summary, the target audience of the product are males between 20 and 45 that are expected to use the headset for occasional gaming.

Assumptions Testing and Validation

This section describes key assumptions that were used to predetermine the success of the new product. These assumptions are listed and validated below.

The VR market will be growing fast. The assessment of market growth revealed that the VR market will grow from $7,719.6 million in 2020 to $26,860 million in 2027 (Valuates Reports, 2021).
Barriers to wide adoption of VR are cost, compatibility, and lack of comfortability. Huang and Webb (2021) stated that the prices of the professional VR kits might be above $1,000, and they are very platform-oriented. Moreover, Huang and Webb (2021) stated that headsets could be massive, which decreases their convenience.
The new headset will be used primarily for gaming. A study by Sánchez-Cabrero et al. (2018) demonstrated that approximately 70% of VR users utilize it for gaming.
Technology will develop enough to be able to produce a dream-like experience. VR research and development is expanding rapidly, opening new horizons and technologies every day (Oakley, 2017).
A similar product will not be released before the proposed product. Research revealed no similar products in development.

Value Proposition

In order to address the problems in the VR industry identified previously in this report, a new product is proposed. The product will be able to compete with the current and future VR headsets as it has crucial characteristics that serve as critical success factors. The headsets competitive advantage is based on four aspects, including uniqueness, affordability, comfortability, and compatibility. The value proposition is conceptualized in Figure 1 below.

Uniqueness. The headset will send the signal directly to the brain creating a unique dream-like experience, which is a unique type of entertainment not available through any other platforms.
Affordability. The final version will cost around $350, which is much less than the current prices on Pro versions of headsets that reach over $1,000.
Comfortability. The headset will be lightweight and comfortable for wearing. Moreover, the customers will be provided an option to implant a chip so that the headset can send the signal to the brain without wearing the headset.
Compatibility. The headset will be compatible with all the platforms and controllers.

Conclusion

This report revealed that the current situation in the VR market is favorable for introducing a new headset that will send waves to the brain and create a dream-like experience during gaming and watching the movie. First, the analysis demonstrated that the market is expected to grow in the nearest future due to the growing demand for VR products. Second, the introduction of the new headset will help to address the key pains of the customer, which include high cost, lack of compatibility with different platforms, and lack of comfort in wearing the headsets. Finally, the new product is expected to be successful as it will provide a unique experience to the customers. No analogs are present in the market, which will help the new product compete successfully against other VR headsets in the market.

References

Huang, M., & Webb, K. (2021). The reason virtual reality still hasnt taken off. Business Insider.

Leibach, H. (2015). Meet the Consumers That Will Make or Break Virtual Reality Next Year. Singularity Hub.

Oakley, K. (2017). The exciting world of virtual reality. Forrest Brown.

Sánchez-Cabrero, R., Barrientos-Fernández, A., Arigita-García, A., Mañoso-Pacheco, L., & Costa-Román, O. (2018). Demographic data, habits of use and personal impression of the first generation of users of virtual reality viewers in Spain. Data in Brief, 21, 26512657.

Valuates Reports. (2021). Virtual Reality (VR) Market Size is Projected to Reach USD 26860 Million By 2027 At A CAGR of 19.0% Valuates Reports. PR Newswire.

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