Advancements in Virtual Reality may create additional revenue streams for sports franchises, as well as enhance both consumer engagement and athlete training.
Virtual reality (VR) versus the real-life buzz of high-level sport – you might think it’s a no-contest! Afterall, can watching via a VR headset – no matter how immersive it may be – ever thrill us to the same extent as being physically present at a stadium full of rival fans in a high intensity contest? On an emotional level, the answer is probably not. But importantly, another part of the answer is – that’s not the point.
Because in sport, VR doesn’t need to be about replacing the thrill of being there. Rather, it’s about enhancing the experience for certain fans, deepening fan engagement and loyalty, and expanding the audience for games and events. It also gives those who can’t travel, or afford to travel, to sporting venues, ‘virtually’ the best seat in the house, notes a recent report published by Citi Global Insights.
It raises the prospect of additional revenue generation by deploying VR in sports in the not-too-distant future for franchises, broadcasters and organizations alike. In fact, global industry projections suggest the total market for VR in sports and entertainment is expected to reach $56.7 billion by 2031 from a $2.3 billion valuation in 2020; a projected compound annual growth rate (CAGR) of 32.5% through the forecast period.
And it isn’t all to do with money. VR is also about making athletes or competitors improve their performance through its use in coaching and training at an elite level, the report adds.
Existing television viewership of sporting events could be used as a basis to estimate a potential VR audience. So assuming that this is the very group of people to whom technologically enhanced viewing may likely appeal to. And if experiential enhancements to television or online viewing take off, they may well bring greater interaction among sports fans, and related business opportunities for facilitating this via immersive digital platforms.
Such experiences are no longer farfetched, thanks to developments in the Metaverse. It is a concept that may be the next generation of the internet, combining the physical and digital world in an immersive manner, possibly intermediated via devices such as mobile phones, in addition to VR and augmented reality (AR) hardware.
Or, to put it another way, the Metaverse is an internet that you don’t simply view but participate in, much of it contingent upon progress in VR/AR arenas. But focusing purely on the world of sports, hardware penetration will probably be a limiting factor for VR viewing of events by 2030.
For instance, in June 2022, Citi Research’s Global Technology report forecasted global VR devices to reach 66 million units by 2030, implying a penetration rate of 1% of online users worldwide, the vast majority of whom would be in developed markets.
Technology aside, in order to gauge the suitability of a particular sport for VR viewing, the Citi Global Insights report narrows a pool of 80 global sports down to 26 based on their popularity. Then three further criteria are considered – duration, technical feasibility, and audience engagement.
Thereafter, considering VR suitability for different sports, the report’s authors bracket them into three categories – high, medium and low; each of which will likely have a different VR penetration rate. This methodology places ice hockey and basketball atop sports particularly well suited for VR enhancements of the fan experience.
The report also attaches the caveat that while the weight (and prices) of VR headsets are coming down, most sports fans with access to such headsets will use them sparingly for now, and quite possibly for no longer than 30 minutes for a single viewing experience. Simply put, the current hardware is not that comfortable just yet for prolonged use.
However, continuous improvements on the hardware front may change all that over the coming years. The report expects the time limit for a single viewing to extend to at least 90 minutes by 2030. That’s long enough to cover the duration of some of the most popular sports, not just ice hockey and basketball. Contingent upon technological developments and fans’ adoption of more comfy wearable technology, a game-changing multibillion dollar market beckons.