Report: VR And AR Developers Aren’t Making Enough Money To Justify Investments
According to the 34-page survey, 50 percent of VR and AR developers indicated that they will require more financing in the future, stating they will need additional rounds of more than $1 million. In order to raise this level of investment, companies typically need to have the ambition to achieve at least $10 million in revenue within five years. However, the average developer in the survey expects their firm to generate “only” $1.3 million.
“When the financials are not compelling enough, developers will have to show other reasons why investors should invest in them,” Coen Sanderink, business developer at BOM, told VentureBeat. “Investors will be looking for potential market leaders with focus and strong client relationships because it allows them to create additional revenue models and value.”
That wide gap between the needs of each business and their revenue-generating opportunity is a warning sign.
In addition to the funding gap, the study details the current sales of VR and AR displays, forecasts future sales, profiles the industry and its employees, and provides insight into how developers will spend their budgets. And while the survey focuses on the Netherlands, Belgium, and Germany, the data is relevant to most markets. The Netherlands, for example, is a popular mobile app “soft launch” location, due to its consumers having a similar profile to those in the U.S.
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