Introduction to the Fourth Edition

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The Study

This report is the fourth in an ongoing series started in 1997 by CyberEdge Information Services, Inc. Each year we have conducted a survey of people around the world who are involved in visual simulation (VizSim) and virtual reality (VR). For the last three years we have asked essentially the same question. Frequently in this report we provide comparative data from previous years. This information is starting to reveal trends, especially in applications of VizSim/VR technology, vendor successes, and financial findings.

Our survey this year was comprised of 46 questions. Our respondents, replied from five continents, and primarily function in executive management, research, technical management, and marketing. They provided more than 161,000 individual data points, giving us a depth and breadth never before achieved in looking at the VizSim industry. The study's finding are accurate to +/-5.9% at the 95% level. In other words, you can be 95% sure that the figures we present here are accurate to +/-5.9%. This also means that differences of less than 6% are insignificant.

This report is divided into four main sections. Section One presents findings related to finance. Section Two describes the demographic characteristics of the industry. Section Three provides the technology findings, and satisfaction ratings. Section Four offers our recommendations and the Opportunity Index™, which is our tool for assessing the areas of greatest opportunity in VizSim systems and components. Each section is summarized below.

The VizSim Industry

The year 2001 marks a milestone of sorts for the VizSim industry. For the first time since we have been tracking it, since 1991, the industry's growth reversed. We see a 17% decline in industry remedies this year. Though more systems are being sold, the average price has declined enough to reduce the gross value.

For the purposes of this study we look at all VizSim systems, which we define for the purposes of this report as the use of 3D, real-time, interactive computer graphics to create a user-responsive environment. Any application of such a system is included in our study design. This definition includes 3D chat rooms on the Internet and multi-million dollar oil exploration systems, as well as anything in between or beyond that scope. Because of this very broad definition of the field, we are able to obtain a very complete sense of the industry.

We find that Manufacturing and Research are the two fastest growing application sectors. Entertainment activity seems to be slowing relative to the rest of the industry. It is reassuring to see that the applications of VizSim in manufacturing, long expected to be of major importance, are finally coming on line.

With the growth of the industry, we find people selling and using VizSim on every continent but Antarctica. They are using systems to help conceive, design, build, test, sell, and train users about products and processes of many kinds. From 3D chat rooms, which we estimate have around 40,000 users worldwide (from data obtained elsewhere), to medical training, to automotive design and crash testing to testing virtual prototypes of future weapons systems, VizSim is making bottom-line contributions that have caused companies to add it to their technology mix.

We find that there are around 8,500 companies involved with VizSim worldwide, representing nearly half a million individuals, and about 40% of them are strictly end users. This is a continuing trend, and implies that one of the common insider complaints, that VizSim companies just sell to each other, is no longer valid. We find a total industry value of around US$22 billion with annual growth of around -17%. Average system cost is around $92,000.

VizSim people are largely in North America, where 58% of the population will be found, with another 28% in Europe. They are reading at least 164 different publications, though just 9 titles were cited more than 5 times.

This study does not survey technology in terms of innovation or capabilities, but we do look at what users think about the systems and components they use, and the companies they get them from. We find a lot left to be desired in systems and components. Like last year, our respondents only give systems and most components a "C" grade.

In order to help the readers of this report focus on areas of opportunity, we offer the Opportunity Index™. This tool looks at the lowest rated features of the eight components we asked about, as well as VizSim systems in general. We present this information so that one can see where the greatest engineering and marketing leverage may be obtained in each focus area. We expect this information to be used in business planning, product development, and purchasing and investment decisions. Please send your messages or questions regarding this study to research at cyberedge.com.

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