Reality check for VR: Omdia forecasts decline as Apple's entry fails to galvanize market

Rhea-AI Summary

Virtual Reality (VR) market faces significant challenges as headset sales dropped 10% to 6.9 million units in 2024 from 7.7 million in 2023, according to Omdia's latest research. The number of active VR headsets declined 8% to 21.9 million, with Apple Vision Pro's launch failing to revitalize the market and Meta's Quest 3S showing underwhelming sales.

VR content spending reached $904 million in 2024, projected to grow to $1.3bn by 2029, significantly lower compared to console gaming's $37.4 billion. The market outlook remains challenging, with developer interest and declining consumer engagement. Manufacturers are now shifting focus towards lightweight AR glasses with AI integration, hoping to normalize face-based spatial computing for future mass-market VR adoption.

Positive

• VR content spending expected to grow from $904M in 2024 to $1.3B by 2029

Negative

• Headset sales declined 10% YoY to 6.9M units in 2024
• Active VR headsets decreased 8% to 21.9M in 2024
• Apple Vision Pro failed to revitalize market interest
• Meta Quest 3S shows disappointing early sales data
• developer interest and declining consumer engagement
• VR content revenue significantly trails gaming console content ($904M vs $37.4B in 2024)

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LONDON, Dec. 12, 2024 /PRNewswire/ -- Omdia's latest research shows that the consumer VR market continued to decline in 2024. Headset sales volumes fell by 10% in 2024 to 6.9 million units, down from 7.7 million in 2023. The market is expected to decline further in 2025, in line with Omdia's earlier projections. The outlook reflects a challenging period for the consumer VR industry ahead of a forecasted rebound in 2026.

"The Apple Vision Pro's highly anticipated debut failed to spark the resurgence that the VR industry hoped for, with momentum fading and significant developer interest still lacking ten months on," commented George Jijiashvili, Senior Principal Analyst at Omdia. "Meanwhile, early sales data for the new entry-level Quest 3S reflects no significant boost to Meta's headset sales, reinforcing Omdia's view that VR will remain a niche market as long as it remains in its current form."

The number of VR headsets in active use fell by 8% in 2024 to 21.9 million. This was primarily due to a low share of Quest 2 owners upgrading, over 20 million of which have been sold since 2020. Nevertheless, growth is predicted by 2029, contingent on Meta's continued commitment to this category and the anticipated launch of a more affordable Apple Vision Pro model in 2026.

Omdia's latest Consumer VR Headset and Content Revenue Forecast shows $904 million spent on VR content in 2024, growing to $1.3bn by 2029. In comparison, games console content spend will generate $37.4 billion in 2024, highlighting the nascent nature of the consumer VR market.

Dwindling consumer engagement since the pandemic period, limited compelling new content, and developers questioning the ROI of VR projects paint a troubling outlook. With device manufacturers hesitant to commit significant investments, the current developments suggest a pivot away from VR and passthrough mixed reality in current headsets. "The focus is shifting to lightweight AR glasses, offering all-day, 'anywhere' access to multimodal AI. Manufacturers hope that this approach will help normalize face-based spatial computing, which will ultimately spur mass-market VR adoption," added Jijiashvili.

ABOUT OMDIA

Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets combined with our actionable insights empower organizations to make smart growth decisions.

Contact

Fasiha Khan: fasiha.khan@omdia.com

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SOURCE Omdia

FAQ

What caused the VR market decline in 2024?

The VR market declined due to low Quest 2 upgrade rates, developer interest, declining consumer engagement, and Apple Vision Pro's failure to spark market revival.

How much did VR headset sales drop in 2024?

VR headset sales dropped 10% from 7.7 million units in 2023 to 6.9 million units in 2024.

What is the projected VR content revenue by 2029?

VR content revenue is projected to grow from $904 million in 2024 to $1.3 billion by 2029.

How many active VR headsets were there in 2024?

The number of active VR headsets fell by 8% to 21.9 million in 2024.

What is the industry's new focus after VR market challenges?

The industry is shifting focus to lightweight AR glasses with all-day, 'anywhere' access to multimodal AI, aiming to normalize face-based spatial computing.