Virtual Reality industry has been on the rise since 2016. In 2016, only 28% of the general public was aware of virtual reality devices, demonstrating the industry’s potential for growth. Awareness of virtual reality devices rose to 51% in 2017. (Nielsen). Looking into the future, the global AR and VR market is expected to grow to $209.2 billion by 2022.

However, the rapid growth also shows a disruptive and transformative VR industry. VR companies, like VeeR, are examples of some of the industry-level changes. 

In the beginning, while tech companies focus on developing new tools and improving user experience, some proactive entrepreneurs have been looking into the easy access and mass delivery of VR content. VeeR VR, founded by three Chinese in late 2016, is a global VR content community aiming at a developing cross-platform solution for viewing and streaming 360 or VR media. 

VeeR was originally headquartered in Beijing, China but also established two branches in Silicon Valley, California and Shenzhen, China. It later moved its headquarter to San Francisco. Within one year of its official launch, it has grown into an international enterprise with millions of users from over 180 countries. The three co-founders have been featured by Forbes 30 under 30 Asia 2018 as honourees for the consumer technology sector, become the only founders of virtual reality technology company to make the list last year.

“Our original intention was to make the VR content accessible and bring the best viewing or editing experience to users,” said Denise Wu, the Head of Marketing of VeeR VR. Based on this intention, the company developed two unique features of VeeR – great content accessibility and a community to share the content easily.

Wu mentioned that when the VR industry was at its initial stage, there was an issue of accessibility and standardization of contents. “How do you upload the great work you did to platforms, how do you share them, and how do you watch them on different platforms – these are the issues we wanted to tackle. And this is the purpose of our company: to smooth the process of sharing content so that creators and spend more time on creating,” Wu said.

Although VeeR needs to fight with other giants like Youtube and Facebook, which already provided similar functions, VeeR has its own advantage: first, no platform has ever created such a huge community for VR sharing and editing. More importantly, all other platforms require the downloading of a third-party application to play the 360 video – you can’t just open a VR video in the browser, but it can be achieved with VeeR.

This could mean a lot. Platform-native is important to the audience because no one would love to download another app for the experience. In 2016 and 2017, if you see a VR film online, you have to go to (or download) Facebook or other third-party apps to view it. Platforms like Facebook did not support browser-viewing not because of the technical difficulties but because they want to monopolize the VR experience. Same for other VR apps, which put the app downloads over the quality and accessibility of the content itself. But VeeR broke the pattern. It directly connects viewers with the content, eliminating the frictions in between. 

VeeR also brings a cross-platform experience: it currently works on mobile, mobile VR headsets, web and support for other platforms like Oculus. And they tried to create a seamless experience between the various devices, with the UX being similar on all platform, with only some differences to optimize the UX on every one of them.

The other feature of VeeR was the easy share of its content. Study shows that 77% of virtual reality users want more social engagement (Forbes). With VeeR, people can find a community to create, edit and share 360 videos and photos. Just like Youtube, you can create and share 360 videos and see their analytics. But Veer is different from Youtube on that it builds an ecosystem dedicated to 360 videos, with various features specifically dedicated to them. 

The VR ecosystem includes VeeR Editor, a mobile app for editing 360 videos. So, VeeR VR lets you enjoy, comment share the content; VeeR Editor lets you edit and polish the content; VeeR Heat Map lets you, the content creator, analyze the appealing of your video to the public, highlighting which portions of the videos have been watched the most. There is a complete ecosystem that spans from content creation to customization, sharing, and analysis. None of the other platforms could achieve this specialty.

Nowadays, we’ve seen more and more VR-related products dominating the market, and the general trend for VR is “user-friendly.” Many companies launched high-quality professional 360 cameras, but oftentimes the cheaper 360 cameras with more costumer functions sell better. Instead of taking two hours to figure out how to import and export the video, buyers would be more likely to choose a camera easy to start. This is the same concept for the VeeR platform. It eliminates the gap between professionalism and customer functionality, making VR not exclusive to the public due to its technological barriers, but more accessible to the public.

With the mission of empowering everyone to create and share the next generation of media, VeeR has become one of the largest VR content hubs by both content and creator volume, and a trusted platform for VR professionals, production studios and prestigious brands on a global scale. 

VeeR was founded in China, which is a double-edged sword for the company. Content-wise, VR is accessible behind the Great Firewall in China. A large variety of affordable VR tools in China encouraged countless content creators to experiment with VR technology. Meanwhile, China is leading the way of the growth of VR, and China has become the largest standalone VR headset market in the world. This positioning in the Chinese market has helped VeeR in establishing various partnerships with big companies that want to perform marketing operations in China. However, the VR contents produced in China are still subject to government censorship; therefore, they are somewhat monotonous to the global market, said Wu.

In an interview I had with Wu earlier this year, she said that “because our model is quite special, I don’t think we have a lot of strong competitors.” She thinks that in China, none of the VR companies has the skill and audience base to compete with VeeR. She also referred to Facebook and YouTube as the only two powerful platforms that are experimenting with VR content.  

However, the industry has changed a lot over the year. With the mature of the VR technology, mass production of VR content and the lack of industry-standard regulation guidelines, the disparity in quality begins to show up on different VR platforms. 

That is when VeeR decided to switch its focus from easy access and mass production to high quality (or premium, according to its website) content. Months ago, the company’s CEO Jingshu Chen wrote a letter to VeeR users, explaining some big changes to the platform, including the elimination of low-quality content and the gradual transition from mobile to headsets. 

According to the letter, the company is “switching our focus to premium immersive films, including both linear and interactive videos. By doing this, we hope to bring the best immersive experience to the audience (online and offline), while providing a sustainable business model for content creators.”

For creators, VeeR introduced more opportunities for monetization and project funding and added benefits for verified creators. The company also stopped approving videos with a low resolution, content with low perceived entertainment value and mobile-uploaded content. It also removed the 360 photo function, which was introduced to VeeR Editor only last December.

For audiences, VeeR is encouraging (or forcing) them to switch from mobile app to headset. “The focus will be shifted to headsets. The mobile app will now be used to bookmark content for later viewing and purchase content more conveniently,” Chen wrote in the letter. 

This is not only a result of the overflowing of unfiltered content but also a countermove to the expanding power of other video platforms. YouTube, for example, is becoming more skillful on VR content display and meanwhile benefiting from its large audience base from traditional videos. If YouTube wins by multiplying its user quantity, VeeR is trying to gain momentum by polishing its quality. 

As Virtual Reality grows in the market in recent years, people can feel the overflowing supply and a higher demand for high-quality work. When first released, the majority of cutting-edge AR and VR technology cost thousands of dollars to buy. This was something that many people couldn’t afford, which often hindered the growth of the industry. Alongside this, the technology was often of relatively low quality, especially by today’s standards, which meant that many consumers weren’t getting enough value for their money. This is something that has been inverted in recent years. 

With the advancements that have been made in the industry, costs have plummeted while quality has skyrocketed, giving end-users much more value. This is something that is expected to continue in the future.

VeeR is a young company, but it did a great job of pioneering the industry by putting the audiences first. Through VeeR’s struggle to survive in the new trend of VR, we can take a glance at the consequence (both good and bad) of an overheating industry. 

China’s Douyu is one of China’s largest live-streaming sites that focuses on gaming and esports content. By out-fundraising rivals and poaching top streamers, it survived China’s live streaming war in 2016 to become an industry giant. 

Douyu is the second Twitch-like service backed by Tencent to go public in the United States. The other one is Huya, which signed a deal with Western competitive esports organization Team Liquid, one of the world’s most valuable esports teams according to Forbes.

But Douyu is more focused on the growth in its hometown. “As one of the first game-centric live streaming platforms to make the foray into eSports, we are strategically positioned to benefit from the proliferation of the eSports industry in China,” Douyu said on its corporate profile.

Huya and Douyu control over 60% of the Chinese game streaming industry. And this number is expected to grow even higher with further consolidation. Huya went public in May 2018, while Douyu recently IPO’ed in July 2019, both in the US. 

Huya is more than 80% larger than Douyu with a $4.9 billion valuation, and Douyu has a $2.7 billion valuation as of August 26. Moreover, compared to Douyu, Huya has a slightly higher tilt towards game streaming with over 50% revenue derived from gaming, compared to 45% for Douyu.

Last April, Douyu filed with the U.S. Securities and Exchange Commission as it prepares to raise up to $500 million on the NYSE less than a year after its archrival floated on the same stock market.

However, looking at Douyu’s quarterly financial results, it is noticeable that the company’s performance in the third quarter of 2019 is not as good as expected. “The Company expects its total net revenues to be in the range of RMB1,950 million to RMB2,000 million in the third quarter of 2019,” while the real total net revenue increased by 81.3% to RMB1,858.5 million (US$261.0 million) from RMB1,024.8 million in the same period of 2018. 

For the third quarter, Douyu’s net loss was RMB165.4 million (US$23.2 million) compared with RMB220.5 million in the same period of 2018, implying a net loss margin of 8.9% compared with 21.5% in the same period of 2018.

However, these streaming platforms also face other challenges like ethical guidelines and piracy concerns. When a gamer live-streamed on Douyu three days before a Nintendo Switch game’s release date,  viewers were quick to realize they were watching someone flagrantly play a pirated copy of an unreleased game. 

The streamer faced immediate backlash from Nintendo fans. Eventually, Nintendo also appeared to respond. A screenshot of a cease and desist letter said to be from the company started circulating online. The letter was said to be sent to a number of Chinese websites where users were sharing pirated copies of Switch games.

We were unable to verify the authenticity of the letter, but some Chinese websites were quick to respond. Some websites and forums known for hosting pirated games have now stopped allowing users to download Nintendo Switch ROMs.

Nintendo has a complicated relationship with China, which has long been a hotbed of game piracy. This isn’t even the first time a Chinese hacker has publicly flaunted a pirated Nintendo game ahead of its release.

With strong financial support and a large audience base, China is catching up with the world on its eSports and game live streaming services. With its unique duopoly model, each platform needs to find its distinctiveness and has to deal with other concerns along the way.

In October, China’s consumer-price index rose 3.8% compared to last year, the National Bureau of Statistics said Saturday — higher than a median of 3.5% predicted by economists polled by The Wall Street Journal, and far outpacing September’s 3.0%.

The Consumer Price Index or CPI measures changes in the prices paid by consumers for a basket of goods and services. It is widely used as an economic indicator. And It is the most widely used measure of inflation and the effectiveness of the government’s economic policy.

According to data released by NBS, “food/tabacco/wine” has the greatest increase, 11.4%, among all other categories. And among all food categories, pork price has the most significant jump: it rises 101.3%, accounting for 2.43 percentage points in the increase of the CPI.

A doubling of pork prices sent Chinese consumer inflation to its highest level in nearly eight years, constraining Beijing’s ability to stimulate the economy as growth continues to slow.

Soaring pork prices lifted overall food-price inflation to a more-than-11 year high, as consumer demand drove up prices for pork alternatives including eggs and other meat products. And the reason behind the price spike was African swine fever, a highly contagious virus that is lethal to pigs but not to humans.

During this summer, I worked as a reporter at “The Paper,” one of China’s most influential digital news outlets. And one of the investigative stories I worked on was about the outbreak of the African swine fever in Chinese rural villages in Jiangsu Province. Dozens of villagers reported large-scale death of pigs due to the disease. The videos they shot showed countless dead pigs abandoned by both sides of the road or in the ditch. They told me that “nearly all the pigs in the village died overnight.”

As a result, they sold the only surviving pigs at a very low price to reduce loss. Some of them sold the dead pigs at an even lower price. This contributed to a declining producer-price index (PPI) — pork-related products could buy the raw pork at a better price. However, the disease caused a sudden decline of pork available to the public and the demand for pork suddenly grow exponentially. Therefore, the CPI increased in response.

Another interesting trend I have noticed during my investigation was that the Chinese government has been trying really hard to cover the fact that the African swine fever has taken over. My story received a prior restraint and did not get published successfully dut to government censorship. During the first months of the outbreak, there was fairly less coverage of the disease in the mainstream media. On one hand, the government officials have announced in public that the fever has been eliminated, and they did not want the public to distrust them. On the other hand, admitting the disease would create a public disturbance that could further push down the pork prices. 

However, if the PRC does not address the issue directly and keep avoiding the topic, the situation will continue to worsen and push the CPI to a dangerous level.

While the prices charged by retailers to consumers are in an inflationary spiral, prices China’s factories charge to their clients are in a deflationary spiral. China’s PPI, seen as a key indicator of corporate profitability, dropped 1.6% into the deflationary territory from a year earlier, marking the steepest decline since July 2016. And it’s the result of both demand and supply pressures on the Chinese economy.

On the demand side, the exports weakened because of a slowing global economy and the ongoing trade war with America. Exports from China declined by 0.9% year-on-year to $212.93 billion in October of 2019, following a plunge of 3.2% in September, according to Tradingeconomics.com.

On the supply side, there’s excess factory capacity, due to the building of factories that practically duplicate each other, as discussed in a previous piece here. These factories churn out similar products and engage in a price war.

The increased CPI and decreased PPI may foresee inflation for China, and the Chinese government has to address the issue involved in order to get things back on track for 2020.

Reference:

2019年10月份居民消费价格同比上涨3.8%. http://www.stats.gov.cn/tjsj/zxfb/201911/t20191109_1708139.html.

“China Consumer Price Index (CPI).” China Consumer Price Index (CPI) | 2019 | Data | Chart | Calendar | Forecast, https://tradingeconomics.com/china/consumer-price-index-cpi.

MarketWatch. “China’s Consumer Inflation Hits Nearly 8-Year High.” MarketWatch, 11 Nov. 2019, https://www.marketwatch.com/story/chinas-consumer-inflation-hits-nearly-8-year-high-2019-11-10.

Mourdoukoutas, Panos. “China’s Price Trap.” Forbes, Forbes Magazine, 11 Nov. 2019, https://www.forbes.com/sites/panosmourdoukoutas/2019/11/10/chinas-price-trap/#ecf1c105454d.