Financial investment in virtual reality (VR) and augmented reality (AR) technology in the United States is on the decline – and on the rise in China, according to new data from fiscal advisor Digi-Capital.
North American investment in VR/AR fell about 92% to $120 million in the third quarter 2018 from $1.5 billion in Q4 2017. The majority previously invested in smart glasses, video games, location-based entertainment, video, advertising and marketing.
Indeed, global shipments of AR and VR headsets dropped more than 30% this year, according to International Data Corp. A separate report found significant declines in sales of VR headsets on Amazon from Sony, Samsung, Facebook and HTC.
Digi-Capital said global VR/AR investment has declined about 10% per quarter after plateauing at $2 billion in Q4 2017. In China, VR/AR investment has approached $3.9 billion.
Goldman Sachs projects Asia – spearheaded by China – will be become the world’s largest VR market by 2021 with 45% market share.
“American and Chinese investment had an inverse relationship in the last 12 months,” Tim Merel, managing director at Digi-Capital, said in a statement.“American investors increasingly chose to stay on the sidelines, while Chinese investor confidence grew to back up clear vision with long-term investments. The differences in the data couldn’t be starker.”