-

LOS ANGELES, October 26, 2022: ARtillery Intelligence today released a new report that projects VR revenue to grow from $8.3 billion in 2021 to $28.8 billion in 2026, a 28.3 percent compound annual growth rate. Entitled VR Global Revenue Forecast, 2021–2026, the report examines VR revenue totals and subsegments — including consumer and enterprise spending.

Consumer spending (hardware and software) holds a leading share of VR revenues with an estimated $7.25 billion in 2022. This is driven by gaming’s dominance as a VR use case but will broaden to other categories over time, including entertainment and communications. Enterprise spending trails with $4.73 billion, due to relatively-narrow applicability in industrial settings.

In all cases, VR’s biggest accelerant is Meta’s ongoing investments. Though its flagship Quest 2 saw a price increase in 2022, it remains competitively priced at sub-$500 levels. This is a central piece in Meta’s longer-term strategy to build a network effect in VR by gaining early market share.

“Quest 2 has an unmatched quality/price ratio,” said ARtillery Intelligence Chief Analyst Mike Boland. “This flows from Meta’s aggressive loss-leader pricing and its drive to accelerate high-stakes metaverse ambitions. Meanwhile, it’s pushing mixed-reality limits with Quest Pro.”

But it’s not just about Meta. There are notable players in the VR competitive landscape, including Valve Index in PC VR, PSVR 2 in console-based VR, and Pico 4 in standalone VR. The latter could challenge Quest 2 with a competitive spec sheet. Meanwhile, Pico could share Meta’s ability to lower hardware costs given its deep-pocketed owner, ByteDance.

“When looking at ByteDance’s VR play through Pico, the formula involves a social media giant using ad revenue to invest in VR market share,” says Boland. “If this sounds familiar, it’s because it’s Meta’s go-to-market VR playbook. So a Meta v. Pico rivalry will be one to watch as Pico 4 penetrates the market, albeit with relative near-term content shortcomings.”

VR Global Revenue Forecast, 2021–2026 is available to ARtillery PRO subscribers, and more can be previewed here. This report follows ARtillery Intelligence’s separate examination of mobile AR and headworn AR spending.

ARtillery Intelligence chronicles the evolution of spatial computing (AR, VR, and the metaverse). Through writings and multimedia, it provides deep and analytical views into the industry’s biggest players, opportunities and strategies. Products include the AR Insider publication and the ARtillery PRO research subscription, which together engender a circular flow of knowledge. Research includes monthly narrative reports, market-sizing forecasts, original consumer survey data and multimedia — all housed in a robust intelligence vault. Learn more here.

© 2022. ARtillery Intelligence. All rights reserved.

Will VR Revenue Exceed $28 Billion by 2026? was originally published in AR/VR Journey: Augmented & Virtual Reality Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.