The document discusses the risks of investing in virtual reality (VR). It notes that while VR revenues are predicted to grow dramatically by 2020, total investment in VR since 2012 has significantly exceeded the revenues generated. Specifically, VR investment from 2012-2015 was over $2 billion while revenues were only $0.1 billion for that period. The document cautions that barriers to adoption like high prices and lack of quality content make widespread VR adoption challenging. It argues that mobile VR saw more success initially due to its lower price point and greater accessibility compared to platforms requiring expensive hardware. Overall, the document aims to highlight uncertainties still facing the VR industry that could impact the returns on investments being made.

1. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
WHEN MONEY ISN’T A GOOD
THING
THE RISKS OF INVESTING IN VR
Casual Connect Europe 2017

2. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
2
STEPHANIE LLAMAS
VP of Research and Strategy
Head of VR/AR Strategy

3. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
3
The leading provider of market intelligence for digital games, eSports, gaming video platforms
and Virtual/Augment reality
• 78M unique users
• $3.2B of transaction data
• 42 of the top 50 game publishers worldwide
• Panel of 78K consumers

4. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
4
The VR Data Network is the first industry collaboration to quantify and validate the global VR
market
• Partners like headset makers, developers, platforms
• Partners get ongoing insights and data to improve strategy
• Reviewing applications now
Learn more: www.superdataresearch.com/superdata-vr-data-network/

5. Money is the
seed of money.
-Jean-Jacques Rousseau
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
s: 5
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
s:
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

6. 2016 2017 2018 2019 2020
$37.7B
$23.4B
$13.6B
$4.9B
$1.8B
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
6
Virtual Reality will reach $38B by 2020
Worldwide Virtual Reality revenue
+$35B
21x

7. 2012 2013 2014 2015 2016
$2.1B
$0.9B
$0.8B
$0.3B
$0.1B
$2.0B
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
7
Virtual Reality investment was more in 2016 alone than 2012-2015 combined
Worldwide Virtual Reality investment (excluding R&D and Facebook’s acquisi.on of Oculus)

8. 2012 2013 2014 2015 2016
$2.1B
$0.9B
$0.8B
$0.3B
$0.1B
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
8
Virtual Reality investment was more in 2016 alone than 2012-2015 combined
Worldwide Virtual Reality investment (excluding R&D and Facebook’s acquisi.on of Oculus)
$2.0B

9. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
9
VR revenues since 2012 are worth only 46% of investment dollars
VR investment vs. revenue (excluding R&D and Facebook’s acquisi.on of Oculus)
$0.1B
$2B
$1.8B
$2.1B
2012-2015 2016
InvestmentInvestment Revenue Revenue

10. $314.4M
$556.2M
$108.2M
$902.1M
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
10
VR revenues since 2016 are worth only 46% of investment dollars
VR so^ware investment
2012-2015 2016
InvestmentInvestment Revenue Revenue

11. $314.4M
$556.2M
$137.6M
$72.3M
$902.1M
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
11
VR revenues since 2016 are worth only 46% of investment dollars
VR so^ware investment
2012-2015 2016
InvestmentInvestment Revenue Revenue
$99.9M
$324.8M
Games

12. $314.4M
$556.2M
$137.6M
$72.3M
$902.1M
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
12
VR revenues since 2016 are worth only 46% of investment dollars
VR so^ware investment
2012-2015 2016
InvestmentInvestment Revenue Revenue
$99.9M
$324.8M
36% 92% 13% 44%Games

13. Technology is
anything that wasn’t
around when you
were born.
-Alan Kay
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
13
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

14. 25%
50%
75%
100%
1960 1970 1980 1990 2000 2010 2020
Color TV
VCR
PC
Internet
Cell phone
MAJOR U.S. TECHNOLOGY ADOPTION RATES BY HOUSEHOLD
14
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

15. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
15
Almost 220M consumers will use VR in 2020
Worldwide Virtual Reality monthly unique users (MUU)
2016 2017 2018 2019 2020
218.9M
143.8M
89.3M86.5M90.7M
+128M
2.4x

16. 25%
50%
75%
100%
1960 1970 1980 1990 2000 2010 2020
MAJOR U.S. TECHNOLOGY ADOPTION RATES BY HOUSEHOLD
VR
16
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

17. 25%
50%
75%
100%
1960 1970 1980 1990 2000 2010 2020E
VR
VR U.S. ADOPTION RATES BY HOUSEHOLD
5%
10%
15%
20%
2010
2011
2012
2013
2014
2015
2016
2017E
2018E
2019E
2020E
17
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

18. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
18
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
What you can’t
imagine, you can’t
discover.
-Albert Einstein

19. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
19
Mobile’s low barrier to entry made it a winner
Worldwide VR device consumer shipments, 2016
Oculus
Ri^
Google
Daydream
HTC Vive PlaySta.on
VR
Samsung
Gear VR
4.5M
0.7M
0.4M0.3M0.2M
•Proac.ve consumer

20. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
20
Mobile’s low barrier to entry made it a winner
Worldwide VR device consumer shipments, 2016
Oculus
Ri^
Google
Daydream
HTC Vive PlaySta.on
VR
Samsung
Gear VR
4.5M
0.7M
0.4M0.3M0.2M
•Proac.ve consumer
•Knowledgeable assistants

21. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
21
Mobile’s low barrier to entry made it a winner
Worldwide VR device consumer shipments, 2016
Oculus
Ri^
Google
Daydream
HTC Vive PlaySta.on
VR
Samsung
Gear VR
4.5M
0.7M
0.4M0.3M0.2M
•Proac.ve consumer
•Knowledgeable assistants
•Quality content

22. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
22
Mobile’s low barrier to entry made it a winner
Worldwide VR device consumer shipments, 2016
Oculus
Ri^
Google
Daydream
HTC Vive PlaySta.on
VR
Samsung
Gear VR
4.5M
0.7M
0.4M0.3M0.2M
•Proac.ve consumer
•Knowledgeable assistants
•Quality content
•Price

23. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
23
Mobile’s low barrier to entry made it a winner
Worldwide VR device consumer shipments, 2016
•Proac.ve consumer
•Knowledgeable assistants
•Quality content
•Price
•Awareness and interest
32%
US
consumers
who have an
interest in VR

24. 24
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

25. Experience from celebrity view
Gatorade partnered up with
MLB superstar Bryce Harper
to release a VR scenario that
gives viewers the chance to
see what it feels like to be in
the mind and body of Bryce
Harper in a clutch game time
situation.
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

26. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.

27. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
27
It’s not about impressions- it’s about the impression
VR games engagement
48
7
36
12
Sessions per month
Minutes per session
Games
44%2016

28. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
28
It’s not about impressions- it’s about the impression
VR games engagement
Games
30%
2020
Games
44%2016

29. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
29
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
It’s much easier to
make bad VR than
to make good VR.
-Chris Milk

30. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
30
The good news is VR users love games!
US users’ intended consump.on
To watch live events To watch short videos To have unique VR
experiences
To watch TV or movies To play games
81%
53%
38%
32%
19%

31. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
31
…but they aren’t sure how to pay for it
US VR users’ mone.za.on preferencesRem
ove
ads
Video
stream
ing
Vanity
item
s
In-app
purchases
TV
episode
dow
nloads
VR
version
of2D
contentVR
m
ovie
dow
nloadsFullVR
gam
e
purchases
54%
33%32%31%31%28%27%
22%

32. The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.
32
VR games will be worth more than $5B in 2020
VR games revenue
2016 2017 2018 2019 2020
$5.4B
$3.5B
$1.9B
$0.6B
$0.1B

33. 33
The Risks of Inves.ng in VR, Casual Connect Europe | © 2017 SuperData Research. All rights reserved.