Lower Entry Barrier and Improved Content Performance Create a 2024 Inflection Point for a US$100 Billion Virtual Reality Market by 2027

02 Mar 2023

The past hope of substantial Virtual Reality (VR) growth is now coming to fruition. Thanks to current developments and market involvement, VR is now approaching critical mass. This momentum comes from new hardware and content releases, accelerating enterprise value recognition, and a significant metaverse wild card. According to global technology intelligence firm ABI Research, over 85 million VR Head Mounted Displays (HMDs) will be shipped in 2027 across consumer and enterprise segments, creating a US$100 billion VR market that includes hardware, software, and services.    

“Expectations have been high in VR for years, and even decades, without notable growth to show. That growth is finally coming over the next five years,” says Eric Abbruzzese, Augmented and Virtual Reality Research Director with ABI Research. “The barrier to entry is lower than ever, all while content performance and user experience have improved dramatically. This growth is also actionable across ecosystems, not just for consumers, gaming, or enterprises with a budget. Accessibly priced VR headsets now offer full-fledged functionality, replete with a high quality and growing content ecosystem.”

While the consumer segment makes up most of the VR market overall, B2B markets, i.e., education and manufacturing, are also set for significant growth. According to the latest data from ABI Research, manufacturing will be the fastest-growing enterprise VR segment over the next five years, growing at over 100% CAGR. “This is due to the accelerated recognition of the value of VR, often above its Augmented Reality counterpart, in high-value use cases like training. Other markets, like education, are larger overall in terms of users but are growing steadily.

Apple and Meta will dictate the face of the VR market over the next two years, at least in terms of adoption and user volume. While confirmed details are scarce on Apple's plans, the company's anticipated VR entrance is in 2023. Meta has been dominating the VR ecosystem with its Quest 2 headset; the Quest Pro, along with updated devices more in line with the Quest 2's price and target market, will come. While the company's software and service ambitions with the metaverse are still crystallizing, its hardware ecosystem is robust. ABI Research sees standalone HMDs remaining the dominant form factor over the next five years, making up over 85% of total shipments in 2027. Tethered devices make up a smaller percentage, but Sony's PSVR2 will spur interest as an accessible gaming device with a sizeable potential install base.  Qualcomm's ambitions in VR are also significant, and the potential for mobile device-based "viewer" HMDs is also growing.

“Despite expected significant growth, economic headwinds still play a role and will impact virtual reality adoption, especially if inflation and global concerns continue through 2023. The theoretical total market size in the short term is smaller than its possible maximum, with consumers and enterprises hesitant or unable to invest in an expensive ecosystem. However, two factors minimize this impact: the intrinsic maturity and value of VR is higher than ever, and outright market growth outpaces these headwinds,” concludes Abbruzzese.

These findings are from ABI Research’s Virtual Reality Market Data: Devices, Verticals, and Value Chain market data report. This report is part of the company’s Augmented and Virtual Reality research service, which includes research, data, and ABI Insights. Market Data spreadsheets comprise deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight into where opportunities lie.

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

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