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Actuality take a look at for VR: Omdia forecasts decline as Apple’s entry fails to provoke market

Apple’s VR Entry Falls Short: Omdia Predicts Market Slowdown

By on December 21, 2024 0 19 Views

Not too long ago, we released our latest consumer VR market analysis, revealing that headset sales declined by 10% in 2024 to 6.9 million units, down from 7.7 million in 2023. This market is expected to remain flat in 2025, according to Omdia’s previous forecasts. The outlook indicates a challenging phase for the consumer VR sector before a projected recovery in 2026. In this blog, I outline the main factors contributing to the downturn in 2024, as well as the elements driving the anticipated growth in 2026 and beyond.

VR headset sales witness two successive years of decline, following the pandemic-driven surge

The consumer VR market continues to encounter significant challenges, with several indicators suggesting a lack of momentum and adoption. The highly anticipated Apple Vision Pro launch did not stimulate the revitalization the industry desired, suffering from limited developer interest and diminishing momentum ten months after its release. In the meantime, Meta’s latest entry-level Quest 3S has not produced a substantial sales boost, as shown by my analysis of Black Friday headset sales across eight countries, which indicates a 16% drop. Additionally, PC VR adoption remains flat, with Valve’s recent Hardware Survey revealing that merely 1.5% of Steam users are engaging with VR hardware. Furthermore, Omdia’s supply chain insights verify earlier reports of Sony suspending PlayStation VR2 production due to excess inventory, leading the company to implement deep discounts to clear stock.

The obstacles are further intensified in various markets and segments. VR headset sales in China have plummeted due to diminished consumer demand, and the future of Pico remains uncertain following layoffs and restructuring by its parent company, ByteDance. The owner of TikTok, which acquired Pico in 2021, seems to be losing interest in the segment. On the developer side, creators are increasingly questioning the return on investment for VR games, with a recent Game Developer Collective survey revealing that half of the participants view the VR market as either stagnant or declining.

The quantity of VR headsets in active use dropped by 8% in 2024 to 21.9 million. This was primarily due to a low percentage of Quest 2 owners upgrading, over 20 million of which were sold since 2020. Meanwhile, $904 million was invested in VR content in 2024; for context, console content spending is projected to generate $37.4 billion in 2024, underscoring the nascent nature of the consumer VR market. The current state of the VR market is characterized by declining consumer interest post-pandemic, a slow influx of engaging new content, and growing skepticism among developers regarding the feasibility of VR as a commercially successful platform.

Growth is anticipated to resume by 2026, but widespread adoption of VR headsets in their current form appears unlikely

The expected resurgence in the VR market heavily depends on the anticipated launch of a more affordable Apple Vision Pro model in 2026, which is projected to drive market expansion through 2029. Meta is also expected to continue playing a pivotal role in this space, although its headset sales are likely to remain flat. Meta’s recent move to open its Horizon OS to third-party manufacturers highlights its ongoing commitment to VR, though the company faces significant challenges ahead. Meanwhile, Google’s introduction of the Android XR platform last week represents a much-needed competition in this domain, but its history of launching and quickly discontinuing new initiatives raises caution. Developers and manufacturers may approach these initiatives with hesitation, leading to only incremental progress in the near term.

The design of new VR and passthrough mixed reality headsets continues to hinder mass adoption. Consumer and manufacturer interest is shifting towards lightweight glasses, promising all-day, anywhere access to multimodal AI – as seen with the initial success of Meta Ray-Ban glasses. Companies in this area hope this approach will help normalize face-based spatial computing, which may ultimately encourage mass-market VR adoption. However, th

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