Consumers Have Spent $3 Billion on VR Apps
According to market analyst and venture capitalist Tipatat Chennavasin, consumers have so far spent $3 billion on virtual reality apps.
Chennavasin is a General Partner at the venture capital firm Venture Reality Fund which has early investments in major VR players such as the VR studio Beat Games, the studio Owlchemy Labs (behind the popular VR title Job Simulator), and Rec Room among others.
Chennavasin, who has been a market analyst for years, says the virtual reality industry is reaching a tipping point. His latest estimates on the performance of the virtual industry were published in the LowPass newsletter.
The investments and revenue estimates published in the report were based on publicly available statistics, listed titles, and internal performance data that virtual reality studios shared with him.
Meta Driving Virtual Reality Success
Chennavasin’s analysis shows virtual reality developers have generated $3 billion in revenues from 2016 to date. Most of the virtual reality devices and brands that set the stage for the current generation of devices that dominate the market including PlayStation VR, HTC Vive, and Oculus Rift came out in 2016.
Unsurprisingly, the analyst’s report shows that the Meta Quest Store is dominating VR app sales. The store was launched in 2019. According to his estimates, the Meta Store revenue has generated close to $2 billion in revenue since its launch in 2019.
Chennavasin claims that 73% of VR industry app revenue in 202 came from Meta Store alone. In October last year, Meta announced that its Quest Store had generated $1.5 billion in revenues to date. Beat Saber remains the top-selling virtual reality game. A recent Wall Street Journal article reported that Beat Saber had generated lifetime revenues of $255 million by October 2022.
Chennavasin says that virtual reality app development may not be a $100 billion industry yet but it is already sustaining many developers and studios that are generating decent revenues from their apps and services. Some 40 titles have generated over $10 million in revenues which, according to the investor, represents “a tipping point” in virtual reality.
The investor is also seeing a major opportunity for indie developers because the virtual reality app market is still a fledgling one and is not as crowded and competitive as the more established app and gaming markets. With many titles and studios now grossing at least $1 million, the analyst sees this as a fantastic investment opportunity.
Find more information about the analysis and estimates from the Lowpass newsletter.