Although Virtual Reality (VR) has been around for a while, it never quite caught on with gamers. The reasons for this vary, but one contributing factor is that there aren’t many modern, updated headsets to choose from. Today there is really only one affordable option in town; the Meta Quest 2 headset. It controls the vast majority of the VR market for its affordable price and great performance. That’s about to change, however, according to a new report from IDC. Apple is reportedly coming soon with a mixed reality device. Sony has also announced its second-generation VR hardware for the Playstation 5. This means that Meta will face serious competition for the first time. Given the investments made by Apple and Sony, it could revolutionize the VR landscape.
IDCs last report shows that Meta currently controls 90 percent of the VR market. That’s all thanks to the Quest 2 headset. The company with the second largest global market share is a Chinese company called Pico. It is actually owned by TikTok parent company ByteDance. Although it operates mainly in China, it has still penetrated several global commercial markets. Despite that limitation, it has a market share of 4.5 percent. The other companies each have a share of less than four percent. They include DPVR, HTC and iQIYI. We’ve also never heard of DPVR and iQIYI. These are global statistics, not just for the US.
IDC predicts that Meta’s Project Cambria and Apple’s headset will send VR headset prices soaring next year. (Image: IDC)
As you can see, Meta has no serious challengers to its VR dominance. However, IDC doesn’t think subsidizing the hardware is a viable long-term strategy. “Meta continues to invest in the development of the metaverse, but the strategy of promoting low-cost hardware at the expense of profitability is not sustainable in the long run,” said Jitesh Ubrani, research manager at IDC. As we reported beforeMeta’s Reality Labs VR division is a money pit. The company has invested billions of dollars in it in recent years. At the same time, Meta plans to eventually make billions from the metaverse. Zuckerberg recently stated: he expects it to be a booming market by 2030.
The solution to Meta’s revenue is: Project Cambria† It is the company’s first high-end headset and will be launched in 2022. Pricing is not yet available, but it will likely be at least twice as expensive as the $400 Quest 2. IDC believes it will shift the entire market from affordable headsets to more expensive offerings. Ubrani stated: “The good news is that Meta’s upcoming productivity-focused headset will serve as the entry point for the company’s pivot to more revenue-generating hardware and also contribute to an increase in end-user prices across the industry as an average.” selling prices are rising and technology is improving significantly.”
The fact that Meta launches Cambria just as Apple is expected to hit the market makes for an epic clash between the two rivals. Apple’s device will be expensiveand also not metaverse-friendly† It is also not shipped in large quantities due to the price. Instead, it will be a “toe in the water” for early adopters and diehard Apple fans. At the same time, Sony is expected to start selling its PSVR2 hardware this year. It announced the radically upgraded hardware a while ago, but it still hasn’t launched. In the US, Sony is also second in market share after Meta, so it’s a formidable competitor.
Next year is expected to be a pivotal moment for the industry. Both because of the clashing titans, and because of the arrival of next-gen hardware. IDC expects VR shipments to grow by 26 percent by 2022, and that percentage will only increase next year. Which company will come out on top when the dust settles is a mystery. However, Meta currently has all the advantages at its disposal.
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