We just lately printed our newest client VR market analysis, displaying that headset gross sales fell by 10% in 2024 to six.9 million items, down from 7.7 million in 2023. The market is anticipated to say no additional in 2025, in step with Omdia’s earlier projections. The outlook displays a difficult interval for the buyer VR trade forward of a forecasted rebound in 2026. On this weblog I lay out key drivers behind the downturn in 2024, in addition to the components driving the assumed development in 2026 and past.
VR headset gross sales see two consecutive years of decline, following the pandemic-induced upswing
The patron VR market continues to face important challenges, with a number of indicators highlighting an absence of momentum and adoption. The extremely anticipated Apple Imaginative and prescient Professional debut has did not ship the resurgence the trade hoped for, with restricted developer enthusiasm and fading momentum ten months post-launch. In the meantime, Meta’s latest entry-level Quest 3S has but to spark a notable gross sales increase, as evidenced by my evaluation of Black Friday headset gross sales throughout eight international locations, which reveals a 16% decline. PC VR adoption additionally stays stagnant, with Valve’s newest {Hardware} Survey revealing that just one.5% of Steam customers are participating with VR {hardware}. Including to this, Omdia’s provide chain insights affirm earlier experiences of Sony halting PlayStation VR2 manufacturing resulting from unsold stock, prompting the corporate to resort to heavy discounting to clear inventory.
The challenges are additional exacerbated in different markets and segments. VR headset gross sales in China have collapsed resulting from weak client demand, and the way forward for Pico stays unsure following layoffs and restructuring by its guardian firm, ByteDance. The TikTok proprietor, which acquired Pico in 2021, seems to be shedding curiosity within the phase. On the content material facet, builders are more and more questioning the return on funding for VR video games, with a latest Recreation Developer Collective survey revealing that half of respondents understand the VR market as both stagnant or in decline.
The variety of VR headsets in lively use fell by 8% in 2024 to 21.9 million. This was primarily resulting from a low share of Quest 2 house owners upgrading, over 20 million of which have been bought since 2020. In the meantime, $904 million was spent on VR content material in 2024; for context, video games console content material spend will generate $37.4 billion in 2024, highlighting the nascent nature of the buyer VR market. The present state of the VR market is characterised by waning client curiosity post-pandemic, a sluggish influx of compelling new content material, and rising skepticism amongst builders in regards to the viability of VR as a worthwhile platform.
Development is predicted to renew by 2026, however mass adoption of VR headsets of their present type stays unlikely
The anticipated return to development within the VR market is closely reliant on the anticipated launch of a extra reasonably priced Apple Imaginative and prescient Professional mannequin in 2026, which is projected to drive the market enlargement by 2029. Meta can also be anticipated to stay a key participant within the house, although its headset gross sales are more likely to stay flat. Meta’s latest transfer to open its Horizon OS to third-party producers underscores its continued dedication to VR, however the firm faces an uphill battle. In the meantime, Google’s announcement of the Android XR platform final week represents a much-needed competitors on this house, however its historical past of launching and shortly shuttering new initiatives tempers expectations. Developer and producer strategy to those initiatives can be cautious, subsequently, solely incremental progress is anticipated within the short-term.
The shape issue of present VR and passthrough blended actuality headsets stays a barrier to mass adoption. Client and producer curiosity is shifting towards light-weight glasses, promising all-day, anyplace entry to multimodal AI – as exemplified by Meta Ray-Ban glasses, which is seeing early indicators of success. Firms on this house hope that this strategy will assist normalize face-based spatial computing, which might in the end spur mass-market VR adoption. Nevertheless, the progress in direction of reaching this can be sluggish, and isn’t anticipated to occur inside this decade. Within the close to time period, VR is more likely to stay a distinct segment market, constrained by its current limitations and the rising trade concentrate on AR as the way forward for immersive know-how.
