The news: The global VR headset market grew by: 241.6% in Q1 this year, with meta 90% of the market owned by his Scavenger hunt headphones, per IDC.
Meta dominates headsets, but for how long? Metas Quest 2 device is only available in the U.S and Canada† per IDC’s Global Quarterly Augmented and Virtual Reality Headset Tracker. Other VR headsets are gaining ground.
- After Meta, with a 4.5% market share, was Pico from ByteDance headset, which is mostly limited to the borders of China, but has slowly entered global markets for use in commercial applications.
- Other VR headset players include: HTC and iQIYI with less than 4% share combined†
IDC notes high expectations of Apples VR or AR headsets, rumors coming to market this year.
- “All eyes will be on Apple when it launches its first headset. Keep in mind that this is the first headset that will primarily appeal to a small audience of early adopters and Apple fans,” noted Ramon Llamasresearch director at IDC’s Augmented and Virtual Reality team.
- Apple’s entry into the market is likely to increase pricing models, pushing headset costs up into the premium market. The company is reportedly working on content building to support his VR game.
Subsidizing VR hardware is not sustainable: Meta owes much of its success to its pricing model for Meta Quest 2 headsets, which start at $299, roughly the cost of entry-level smartphones or game consoles. Meta has subsidized the cost of the hardware to entice user adoption.
- “Meta continues to invest in the development of the metaverse, but the strategy of promoting cheap hardware at the expense of profitability is not sustainable in the long run,” he says. Jitesh Ubraniresearch manager for IDC Mobility and Consumer Device Trackers.
- Meta is currently falter of the ongoing financial crisis, with CEO Mark Zuckerberg workers warn he anticipates “one of the worst recessions we’ve seen in recent memory.”
- The company has halted hiring, “turning up the heat” on performance management to clear its workforce, and is cutting back on metaverse investments to keep afloat.
- Hardware like VR headsets are key to metaverse adoption—software is the key to retention. This makes it a challenge for any business to create affordable headsets while developing new and compelling use cases for VR and AR.
What’s next? Big Tech companies are in the best position to develop VR hardware while building immersive virtual reality worlds and experiences. Meta’s enforced financial austerity could put it at a disadvantage as companies with deeper pockets penetrate the metaverse hardware space.