VR in China will be huge. Everyone is saying this. Once in a while all major VR blogs and magazines come out with an article saying that VR in China is huge, will be huge and that China will conquer the VR world. They talk about Chinese investments funds, startups, enormous VR centers, lots of VR arcades and with numbers they’ll prove you that US is just a little country compared to China. An example link for such Chinese-friendly articles is this one.

These articles are very interesting because they remember us that we are very Western-world-centered: we all look at US and the Silicon Valley as the tech paradise and we usually forgot the big red giant. China is huge and it’ll grow even more in the next times: it is predicted that in some years it will become the first economical power of the world. So, surely VR will be huge there. But I don’t share the same exact opinion of these articles… I’m not a business expert, but I know something about Chinese people and I know something about VR, so I can have some sensible thoughts on this topic.

First of all, I agree that VR will be huge in China. China has an enormous internal market, that can surely lead to lots of VR sales there. Furthermore, China, like Japan has still an arcade culture: it is common for parents to go shopping to the shopping centers and leave the kids playing in the arcades there while they buy stuff. So, lots of arcades in China are equipping themselves with VR experiences and VR is becoming well-known. Every Chinese people I met in the last times knows what VR is and has tried a VR headset somehow. BUT China is also still a country with lots of poor people and VR is still a lot expensive. Most people I know has tried only cheap mobile headsets and when I tell them I’ve a Rift they are very eager to try it. So, my opinion is that the internal market at the beginning will be just populated with super-cheap-and-crappy headsets. And most of the revenues will come from people going to arcades to have fun in VR.

China governments is used to make long economical planning (5 year long). This song can explain it in a very sober way.

Prime minister Xi Jin Ping has clearly stated that AR and VR are something in which China is interested and the country is headed in that directon. And if the government has decided this, it will surely happen (as when China decided to be an excellence in sports, for example… look how many medals they win at the olympic games). Lots of Chinese investments funds are investing in VR startups (not only Chinese startups); Chinese VR startups are popping out like mushrooms; China is taking smart people from the western world to start companies about VR storytelling and other stuff. Let’s all remember that HTC Vive is made by HTC, which is located in Taiwan and Vive is one of the most important virtual reality company of the world. HTC is creating an ecosystem around its device, fostering the growth of other Chinese companies, like TPCAST which created a piece of hardware that makes the Vive wireless.

china virtual reality
Chinese Prime Minister Xi Jin Ping looks at Hololens glasses… what application has he in his mind? (Image by UploadVR)

But, I’ll make you a single question: how many VR innovations that you know are actually born in China? Very few. The VR renaissance has been led by Oculus (U.S.); Vive room-scale is a product of Valve (U.S.); mobile headsets have been “invented” by Google (U.S.) and made better by Oculus (U.S.) and Samsung (Korea); mixed reality videos have been introduced by Radial Games (Canada); full body markerless virtual reality by Immotionar (Italy) (ok, just kidding on this). And so on. The only thing that comes to my mind is the wireless Vive made by TPCAST. If you know some Chinese people, you may know that creativity is not one of their best virtues. Chinese are really hard workers, but are very pragmatical people. Of course there are exceptions (all Chinese people are different, obviously), but usually Chinese are very good at copying, improving, reducing costs, but not that great in inventing (in that, we as Italians, are surely better). Most of VR headsets produced in China are just clones of other headsets: I’ve seen clear clones of Oculus Rift and Vive sold at a lower price. My idea here is that China will invest a lot in becoming the place where headsets are manufactured (Oculus headsets are made in China, for example) and since they’re not good at creating, investing in other people that will create for them. Either by importing talents or by investing in external companies, China can have other people bring forward the innovation for it. But this means that I still look at the US as the main source of innovation for the virtual reality field: innovation that will maybe come with the help of Chinese money.

Futhermore, China is very chaotic: a Chinese girl I met at the EIA accelerator still goes to the US to learn about innovation. She says that China has a great power, but is not growing in a coherent way. Someone talks as China as an economical “teenager”, meaning that has start growing economically from few years, so it has still not reached a stable phase: there’s a lot of pollution, economical inequality, fast growing and popping bubbles and so on. And it is also a very closed market: China is a closed world and there exists lots of products and companies that are very huge there and that we have not even heard of. So it is possible that there will be super-huge VR companies there that will live only thanks to a huge internal market, but that will never go outside the Great Wall borders. For example, thinking about messaging apps, WeChat is used by almost every Chinese, but I’m the only one having it among my Italian friends… and only because I use it to chat with Chinese people. Despite the fact it has some innovative features, WeChat is mostly an internal Chinese product.

TaoBao (of the Alibaba group) is a website where every Chinese person buys stuff. Almost no western people use it. I think you got the point. In VR, there’s a website like 87870 that offers VR news in Chinese… but I still prefer going to UploadVR or RoadToVR. Again, this is a popular website only for the internal market. So it may happen that we’ll have VR companies and innovations that will just stay in China.

So my personal opinion is that China will be very important for the virtual reality ecosystem, giving it investments and a huge market, but that it will not be the main driver for innovation. China will really disrupt the market when VR will be mature, as it is doing with smartphone nowadays. Once VR headsets will reach optimal performances and the quality difference between a Oculus headset and a Shenzhen-headset will be low, with the latter costing a lot less, Chinese headsets will conquer the world. This is exactly what’s happening with smartphones nowadays, with Chinese companies like Huawei and Xiaomi gaining market shares very fast.

Of course this is just my opinion, with a healthy touch of speculation. I’m very curious about your opinion… so, let me know it in the comments or on twitter (where you’re free to share my article 😉 )! 再见!

(Header image by Wikipedia)