COVIDInterestVRAfter years of slow but steady growth in limited use cases, Virtual Reality (VR) is facing a market explosion over the next five years. Consumer interest in VR games and media continues to grow after COVID accelerated activity. At the same time, the need for worker enablement and immersive content in enterprise remains strong.

According to global technology intelligence firm ABI Research, over 90 million Head Mounted Display (HMD) shipments in 2027 will power total VR market revenues to reach over US$95 billion in the same year across hardware, software, and services.

“The virtual reality market is no stranger to false starts, with identifiable efforts in VR dating back to the 1980s and 1990s. While the technology never found purchase, the increased capability of VR hardware combined with, perhaps most importantly, demand for immersive content in numerous markets, presents a significant opportunity,” says Eric Abbruzzese, Research Director with ABI Research. “While the intense focus on metaverse is partly responsible for this increase, shorter term and smaller scale opportunities are driving the expected growth.”

Among devices, standalone HMDs make up most shipments in the forecast, with 79 million expected shipments in 2027, growing at a 40% CAGR. Tethered and mobile-based VR devices make up the rest, with tethered favored for gaming by consumers and simulation and training for enterprises. Among these shipments, consumer shipments make up 80% of the total. Education accounts for 16% of total shipments but is growing the most quickly at an 88% CAGR through 2027. Other enterprise markets do not account for a significant portion of shipments but will significantly grow in some areas: Location-based and Transportation and Automotive both will grow at over an 80% CAGR through 2027.

Meta’s Quest 2 remains the most popular VR device, standalone or otherwise, and by all accounts had a record breaking 2021. Sony’s PSVR2 has been confirmed and will target an impressive PlayStation 5 install base that has also set records despite supply shortages. Apple has a planned headset possibly launching in 2022, while Meta also has confirmed a new standalone device. Pico (recently acquired by Bytedance) and DPVR are worth watching on the affordable end, and Pimax is pushing capability at the high end.

Mobile devices, such as the now abandoned Samsung Gear and Google Daydream, do still have presence in the market, although limited. The low cost and accessibility from these devices remain valuable and will still be treated as an option against the dominant standalone form factor.

“Hardware, software, and services must align with perceived value and demand to allow a new technology like VR to flourish. This has only happened in siloes and at small scale so far, such as with VR gaming, but cross-market investment and offerings are now being met with demand. The need for immersive visualization tools can only increase, and without the once glaring holes in enabling technology capability or value to users, the path forward is a promising one – not just in small segments but across ecosystems,” concludes Abbruzzese.

These findings are from ABI Research’s Virtual Reality Market Data: Devices, Verticals, and Value Chain report which is part of the company’s Augmented and Virtual Reality research service.

By MediaBUZZ