Investors Looking to Capitalize on VR Tech as Facebook Inc (FB) and Sony (SNE) Battle for Supremacy

By Ryan Adsit

investors-looking-to-capitalize-on-vr-tech-as-facebook-inc-fb-and-sony-sne-battle-for-supremacyVirtual Reality is considered to be one of the hottest areas of innovation and technology growth which can impact many other sectors. Though it is still in its nascent stage, VR has lot of growth potential apart from gaming and entertainment industry. It can also be used in real-estate sector where customers can have a virtual tour of properties from a completely different location. With Virtual Reality picking up very fast, investors are trying to capitalize on VR adoption. Based on a research report from Nomura Securities, Facebook (FB) and Sony (SNE) are the major competitors in this business apart from Samsung which is also one of the players. They expect Facebook stocks to climb up from 2020 because of the high-margin royalty revenues. Corporate investors are spending lot of money on VR based start-ups similar to Venture capitalists as they are excited about the growth opportunities that VR can offer. The analysts at Digi-Capital expect the virtual reality and augmented reality market to hit $120 billion by 2020.

Facebook acquired VR based start-up Oculus in 2014 for $2 billion which was not so popular during that time. Now all the major tech-giants like Sony (SNE), Alphabet (GOOGL), Apple (AAPL) and Microsoft (MSFT) have started to invest in Virtual reality space with each of them having their own products like Apple’s VR Content, Sony’s PlayStation VR and Google’s Cardboard. Other companies which are investing in this segment include Samsung (KRX), HTC Corp (TPE), GoPro Inc (GoPro) and Nvidia (NVDA). 2016 is considered to be watershed year for Virtual reality based on Juniper Research and investors are trying to invest in this upcoming market in both public and private companies. Investors around the world have spent more than $602 million last year into companies based out of Virtual reality.

Facebook launched its Oculus Rift VR headset in March 2016 and people were going crazy about it. Soon HTC followed the trend by launching their Vive headset in April 2016. Sony has also launched their PlayStation VR headsets on October 13th 2016. These headsets are designed to be compatible with all their PlayStation consoles including PS4.  While Oculus Rift and HTC Vive VR headsets are priced at $799, Sony PlayStation VR headsets have been launched with a lesser price of $399 per piece. This can give Sony a winning edge over other competitors and it expects to sell around 1.4 million VR headsets by end of next year. Sony is going to have a tough race with Facebook on the VR market.

Nomura Securities has predicted that shipments of VR headsets will rise to 40 million by 2020 which is currently around 2 million. Also the customer market is expected to increase to $10 billion by 2020 with rise in sales of VR headsets, software and related accessories. Based on research by Nomura securities, Sony is expected to ship around 700k VR headsets this year while Facebook is expected to sell around 400k Oculus Rift VR headsets.

Sony is hoping on their newly VR headsets to drive sales and bring back their lost magic. The company returned to profitability earlier this year after reporting losses for last couple of years. Since Sony already has a huge user base for its PlayStation consoles, analysts expect that its VR headset sales will skyrocket this year. The users won’t mind paying another $399 for the VR headset to enjoy the amazing gaming experience. Sony (SNE) shares have been trading at $30.06 as of Nov 25, 2016.

Facebook already made a kick start in VR sector by launching their Oculus VR headset in March. Facebook stock has enjoyed a constant surge right from its IPO launch in May 2012 which was the biggest IPO in corporate history when it started trading at $38. Facebook shares are presently trading at $120.84 as of Nov 25, 2016 and the company has a market cap of $384 billion which is expected to grow further.  The stock prices of Facebook can be impacted based on major corporate announcements, Quarterly earnings reports, changes in top management and other controversial news. If you are trading binary options, you should make use of real time trading charts in order to understand the market trend and predict the future price movement accurately.