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Google VR exec: Consumer engagement a major challenge

Consumer engagement is a key objective for Google's virtual reality platform Daydream and other VR players in the industry, according to Greg Ivanov, Daydream's head of business development for Europe, the Middle East and Africa.

Speaking on the sidelines of MIPTV in Cannes, France, Ivanov told S&P Global Market Intelligence that standing out from the competition and capturing consumer engagement will be a matter of content.

Daydream, the Android-powered mobile platform that encompasses software and hardware, is the successor to Cardboard, a disposable VR headset and platform released by Google in 2014.

Regarding new content on the Daydream platform, Ivanov revealed that a key segment of interest going forward is sports. Although he admitted live sports may not be the most "compelling" route for Google, he suggested the company may focus on behind-the-scenes VR content or other forms of "storytelling around sport" instead.

Daydream's interactive model naturally lends itself to higher engagement than Cardboard, Ivanov noted. However, the company's key target would be to drive recurring usage.

"We want to get past the Cardboard curiosity stage ... [and] get people to use it regularly," he said.

Ivanov's comments follow underwhelming demand for VR, with headset sales falling short of projections. Even though the VR industry is said to have generated $1.8 billion in revenue during 2016, according to a joint report by SuperData Research and the analytics division of games engine Unity3D, this falls below the company's expectation of $5.1 billion for the year.

SNL ImageGoogle's Pixel phone and Daydream View headset
Source: Daydream

Showcased at Google's I/O annual developer conference in 2016, Daydream reflects a mobile-first strategy in VR that capitalizes on the increasing amount of time consumers spend on mobile devices.

While established players such as Facebook Inc., HTC Corp and Sony have thrown their weight behind pricier VR headsets, Google's unique selling point is its ability to deliver premium VR content both on mobile screens and at a lower price point.

"Our approach is 'VR for everyone,' so we want to make it as accessible as possible," Ivanov said.

But with more headsets set to hit the market in 2017, the race to establish market leadership only adds to the growing problem of industry fragmentation in software quality and compatibility.