The company operates in the Extended Reality (XR) market, and within that, the Virtual Reality (VR) and Augmented Reality (AR) markets.
Growth of VR devices in 2016-2019
The year 2018 was very positive Shareholder regarding the number of VR HMD sets sold. From unofficial data, it is known that Oculus Go (Facebook’s wireless goggles released in May 2018) exceeded one million units sold at the turn of the year. On the other hand, Sony reported that it sold 700,000 PlayStation VR units in the last quarter of 2018, helping to end 2018 with a total of more than 4 million units. Solid data also came at the beginning of the year – at the technology conference CES 2019 in the US – during the speech, CEO Jensen Huang of NVidia confirmed that VR dedicated to desktops i.e. PC VR (Oculus Rift, HTC Vive, Microsoft VR, etc.) broke the 4 million units sold mark. The current amount of VR hardware on the market is around 10 million devices.
Trends for 2019-2020
Virtual and augmented reality together form a market that, according to analysts at International Data Corporation (IDC), will reach a value of about $20 billion in 2019. In comparison, analysts at Super Data put the value at $10 billion. It can be concluded that the actual value of the market will form in the range of the above amounts. However, both sources agree on the market’s stable growth, where consumers will continue to be the primary driver of VR and AR solutions sales. The second major factor is VR and AR device sales, which will drive the industry. Several new headset models are expected to be released during 2019. This includes the Oculus Quest goggles, which Super Data predicts will sell more than 1 million units by the end of the year. Both motion tracking and the presented image are constantly improving, becoming more natural in perception and ceasing to hinder the player’s feelings. Additionally, assistive technologies are also developing – platforms for moving in VR, hand detection technologies in real space.
Geographically, the US will spend the most on VR and AR in 2019 – as much as $6.6 billion. Spending is expected to reach $6 billion in China, $1.76 billion in Japan, and $1.74 billion in Western Europe. IDC indicates that VR and AR will develop particularly dynamically in Canada (average annual growth in sales until 2022 at 84%), USA (77%), China (76%), and Western Europe (almost 76%). According to forecasts, however, this will not be a one-time increase but a steady trend. Such impressive dynamics will continue for at least the next few years. The VR experience is not only the image but, above all, a different way of controlling and interacting with the game.
Sony plans to continue supporting the VR platform. The company is happy with the sales of VR headset. To meet the consumers’ expectations, Sony is constantly improving its platform. Sony’s strong interest in the VR platform is also confirmed by leaks regarding the PlayStation 5, indicating that it is even being developed from scratch for virtual reality. Along with the new generation of consoles, the Japanese will probably create a new dedicated VR goggle. This can be evidenced by patents registered by Sony in the first quarter of 2019 for various solutions supporting console VR.
A new noticeable trend is a strong interest in “stand-alone” wireless VR goggles (do not require additional phone-type devices), as evidenced by great sales of Oculus Go. The VR market has high hopes for the release in Q2 2019 of the Oculus Quest goggles, which are the next wireless VR offering.
In summary: VR technology has been developing steadily since 2016. We can also talk about sales acceleration in the second half of 2018 of current VR solutions. A plethora of new patents, technology development, stable sales of existing solutions, and leaks from Google and Apple, which are dynamically developing their XR (VR and AR) divisions, bear witness to the fact that shortly we will see the resilient industry and market growth.
Trends for 2021-2022
VR games are next-generation video games that use virtual reality technology to provide entertainment from a first-person perspective. With the pandemic and new habits, there has been an increased interest in VR technology. Moreover, the lock-down period has proved to be a time of steady growth for this technology.
In 2020, interest in the virtual reality field was driven by many innovations that made VR even more attractive, with the arrival of the Oculus Quest 2 goggles, among others. The new platform changed the perspective of gaming, allowing for more freedom in gameplay and an even greater pick-up-and-go experience. Oculus VR goggles are mobile and autonomous, so the player does not need to have access to any other platform.
Market data shows that Meta sold between 500,000 and 1,000,000 Quest 2 goggles in Q4 2020. The easier availability of the goggles, their attractive price, and the emergence of even more interesting games dedicated to OQ2 have boosted the popularity of VR/AR systems in gaming.
In Q1 2020, the number of VR users doubled. VR games on Steam attracted 1.7 million new players, generating 71% revenue growth. Apps such as Rec and VRChat are also more popular than before.
Trends for 2021-2022
Virtual Reality supports online communication. Among the tools used for this purpose is Vive Sync, which enables meetings and 3D presentations of a project, building and more in VR. With the growing trend of remote working, the base of VR communication media will increase, and the current one will improve.
In 2022, many technologies will emerge to enable more accurate hand tracking of the body and facial expressions in the gaming industry. Innovations include combining ray-tracing (“ray-tracing”) with foveated rendering techniques. This will make in-game imagery even more real. Companies will increasingly bet on virtual reality solutions – whether in the context of hardware, apps, VR headsets dedicated to gamers or enterprises. As Zuckerberg announced – Facebook is working on an improved version of VR goggles.
Sony has announced the next version of the PSVR goggles, which differ from the previous version, among other things, higher resolution and image sharpness, a larger field of view and new controllers. The innovations will enable more advanced tracking of player movements, greater immersion in the virtual world and provide a more realistic experience. The new virtual reality goggles will be connected to the PlayStation 5 via a cable.
The emergence of new VR goggles will directly impact the production of titles explicitly dedicated to this platform. Technical conditions of the goggles, i.e. the additional power of the PlayStation 5 console, allows developers to produce titles with even better visuals.
Forecasts indicate that interest in hardware and VR technology will increase. Analyst firm Omdia predicts that the VR industry will be worth $10 billion by 2025, with 2021 being a critical growth period.
Analysts also predict that virtual reality games will be the fastest-growing branch of the gaming industry. The sector could be worth more than $4,2 billion in 2025.
Trend for 2022-2023
According to IDC (International Data Corporation), despite the global crisis, sales of VR goggles have seen steady, stable growth of 32% year-on-year, and by the end of this year, the entire sales segment is expected to be worth more than $9 billion. What’s more, experts predict that by the end of 2026 sales of VR devices will increase to as many as 31 million units per year. According to Statisia specialists, about 64 million people in the United States currently use VR technology, and the number of its regular users worldwide is more than 171 million. Projections for the growth of the VR community are also positive, with 216 million users globally by 2025.
The AR/VR/MR market is estimated to be worth $28 billion at the end of 2021, and will skyrocket to more than $252 billion in the next five years. Experts also point to the rapid growth of the VR gaming sector. At the end of 2021, the VR gaming industry generated a total of $1.1 billion, and experts predict that by the end of 2024, this amount will more than double to $2.4 billion (although there are also forecasts that far exceed these amounts).
Business Wire, reports that global VR/AR user spending will exceed $73 billion by the end of 2024.
Financial experts at PwC are also optimistic about the future and believe that the VR/AR market has the potential to boost the global economy by trillions of dollars over the next decade. It is expected that by 2030 the United States will see $484.2 billion in economic growth from it, boosting GDP by 2.83%. It is worth noting that 75% of the world’s biggest brands have taken an interest in VR technology or are currently developing projects hooked up in this space (Hypergrid Business).
There may be many reasons for such a bright future looming before the VR industry. Certainly, one of the most significant things here is the release of the new PS VR2 goggles, compatible with the modern PS5 console. A huge number of enthusiasts of perhaps the world’s most popular console in the world gained access to a modern, high-quality device that allowed them to discover the possibilities of virtual reality.
Thanks to numerous patches and updates, the Meta Quest 2, still the world’s most popular headset, also continues to enjoy its excellent reputation. As in previous years, in 2022 and 2023, Meta Quest 2 users gained access to a huge base of new applications and games dedicated to the device. In addition to the aforementioned headset, it is also worth highlighting PICO’s latest product, the PICO 4 goggles, which were released in October 2022 and significantly expanded the reach of VR technology in the Chinese market.