A visitor uses a virtual reality headset at the booth of Meta Platforms during Hong Kong FinTech Week in Hong Kong on Monday. (AFP photo)
HONG KONG: The Chinese government wants to expand the country's virtual reality (VR) industry output by 2026 to 350 billion yuan (US$48 billion) – six times the level last year – showing Beijing's ambitions in becoming a world leader in metaverse technology.
The Ministry of Industry and Information Technology (MIIT) and four other agencies on Tuesday published a guideline, setting a national sales target for VR devices at 25 million units by 2026. That is significantly higher than last year’s shipments of 3.7 million unit, according to data from a research institute under state-run newspaper People’s Daily.
VR, one of the seven “key industries of the digital economy” designated by Beijing last year, will help China become a “powerhouse in manufacturing, cyberspace, culture and the digital economy”, the document said.
By 2026, China will have 100 “backbone enterprises” with a strong ability to innovate and create impact, along with 20 use cases with special characteristics, the guideline said. VR technology will be used in video gaming, short videos, fitness, education and other areas, it said.
Despite the country’s grand ambitions, its VR industry still lags behind foreign peers in content production and operating systems, according to Zhao Siquan, a China-based senior analyst at market research firm IDC.
“At present, the domestic VR industry still focuses on hardware manufacturing as a core competence, and the vast majority of enterprises are small in scale”, Zhao said.
“Key technologies like operating systems, development tools and system-on-chip are missing. There is still a significant gap with leading manufacturers overseas … Improvement in content richness is needed.”
The Chinese government has been throwing its weight behind VR technology since 2018, when the MIIT said it would accelerate the development of an industry that would “leverage an emerging market worth trillions of yuan”.
President Xi Jinping, in his letter to the 2018 World Conference on VR Industry in Nanchang, Jiangxi province, said, “China is willing to cooperate with other countries to make VR beneficial to everyone”.
China’s largest VR company at present is Pico. Bought by TikTok owner ByteDance last year, it held a 4.5% share in the global VR market, a fraction of Facebook owner Meta Platforms’ 90%, according to a report in June by IDC. The American giant acquired California-based Oculus VR in 2014.
The IDC report identified 2023 as a crucial year for the VR industry, with Meta, Pico and Sony expected to launch next-generation headsets alongside a mixed-reality headset from Apple.