VR Headset Sales Dropped in 2022
Virtual reality headset sales in the U.S. dropped 2% year over year to $1.1 billion by early December 2022 according to data by NPD Group. Global shipments for virtual reality headsets dropped by over 12% to 9.6 million units in 2022.
It is now a year since Meta rebranded from Facebook, signaling its pivot to the metaverse where it is currently pouring in over $10 billion every year. Still, in spite of the considerable investments by Meta, VR is yet to take off in a really big way and go mainstream.
In the U.S., VR headset sales dropped 2% from the previous year. Much of Meta’s revenues come from Facebook’s advertising business.
However, Meta’s core business, advertising, is currently undergoing a slump due to the tough global economic situation and changes in Apple policy. Zuckerberg pivoted to the metaverse, betting on this new frontier of technology to power Meta’s business in the future. The analyst firm CCS Insight has now released data that shows that global shipments of virtual reality headsets and augmented reality headsets declined by over 12% year over year with just 9.6 million headsets being shipped in 2022.
Overall, the current shipments and sales of VR headsets paint a less rosy picture for Meta and the industry at large. Meta’s stock price plummeted, losing two-thirds of its value in 2022 alone. The Meta stock price has been on a downward spiral ever since Zuckerberg announced that he intended to spend billions of dollars to take the metaverse mainstream. Since then, numerous skeptics have emerged who mock Zuckerberg’s messianic obsession with the metaverse and see it as investing in a bottomless pit.
Zuckerberg regards his metaverse investments as a long game that will pay off a decade or so from now and will, most probably take at least a decade to go mainstream. He projects that the metaverse will be worth hundreds of billions of dollars in commerce.
While Meta remains the biggest investor in the metaverse, a number of other tech companies and venture firms are also betting big on virtual reality and augmented reality and its potential to disrupt the workplace, education, industry, sports, and fitness.
Although the market is still dominated by the Meta Quest 2 headset, sales of the company’s flagship Quest headset declined in 2022. While this was a tough year for XR hardware sales, the decline is also attributable to the fact that the device had a very big year in 2021, according to analysts. In 2021, a number of promotions boosted VR headset sales, leading to potentially, millions of shipments. In 2021, Meta’s VR headset revenues doubled from the previous $530 million in 2020 revenues.
In 2022, there were lower sales and shipments due to a confluence of factors.
Launched in 2020, the Quest 2 headset has now been around for more than two years and has lost its initial market appeal. The recently released Meta Quest Pro headset costs $1,500 and targets enterprise use cases. This still leaves the Quest 2 headset as the go-to consumer VR headset within reach of many buyers. The Quest 2 price was raised by $100 last year in response to inflationary pressures.
The Apple XR Play
Like 2022, the year 2023 is also expected to be a “slow” one for the virtual reality market due to inflation and a weak economy, according to the CCS Insight report.
The consumer budget will continue to tighten and VR headsets, considered non-essential purchases, will be impacted by the tightening of the purses.
Sony’s next-generation virtual reality headset, the PlayStation 2 launches in February 2023 and will boost the market offerings currently available in the VR hardware segment. However, the headset isn’t expected to radically shake the VR market in the same way that the Meta Quest 2 did. The PSVR 2 is not a standalone headset and must be powered by the PlayStation 5 console. The Quest 2’s success has mostly been due to its standalone design, on top of its affordable pricing that was, for close to two years, within easy reach of most consumers. The PSVR 2 market will pretty much be limited to PlayStation owners.
However, the biggest elephant in the room in 2023 will be Apple’s much-rumored advanced VR headset said to have color passthrough and other mixed reality functions. True to other Apple products, it could be a compelling piece of hardware, complete with a software ecosystem that could rival Meta’s.
Apple could shake the market a bit given its position in the consumer technology market where it is already known for sleek hardware and that could make VR hardware devices in general more attractive to mainstream buyers.
Apple also has the advantage of a very loyal fanbase and many of them are already comfortable with digging deeper into their pockets for its sleek product. It is therefore expected that if Apple launches a headset, even an expensive one, its many fans would troop in to lay their hands on the product, thereby winning new fans for VR.
The Apple headset is expected to be released in 2023 although the company is yet to confirm or deny its existence.
Analysts believe Apple could be successful in launching a business-oriented virtual reality headset that could rope in more developers into the community. However, if the Apple headset were to be too expensive, it would still leave out a large section of potential users and the Apple headset would have little overall impact on the industry.
Some analysts believe virtual reality would break into the mainstream, no matter the prices or technical proficiency of current VR headsets if it were to get a killer app.
Indeed, there are some VR games that have had some good traction and cultivated a robust user community such as Beat Saber and Resident Evil. VR fitness apps could also rope in many new users. The same trend has been seen in the console market where blockbuster games have shipped hundreds of millions of products.https://virtualrealitytimes.com/2022/12/31/vr-headset-sales-dropped-in-2022/https://virtualrealitytimes.com/wp-content/uploads/2022/12/Meta-Quest-Pro-600x448.pnghttps://virtualrealitytimes.com/wp-content/uploads/2022/12/Meta-Quest-Pro-150x90.pngBusinessVirtual reality headset sales in the U.S. dropped 2% year over year to $1.1 billion by early December 2022 according to data by NPD Group. Global shipments for virtual reality headsets dropped by over 12% to 9.6 million units in 2022. It is now a year since Meta rebranded from...Rob GrantRob Grant[email protected]AuthorVirtual Reality Times