Macroeconomic weakness is leaving its mark on consumer device markets, and virtual and augmented reality devices are no exception, according to research by technology market analyst firm CCS Insight. The company expects global unit sales in this segment to remain just under 10 million in 2022, rising to 11.4 million in 2023.
“High inflation has hit consumer budgets in many major markets this year, and some people, who under better circumstances would have afforded a virtual reality headset this year, have postponed their purchase,” said Marina Koytcheva, vice president. -president of forecasting at CCS. Insight. “We also find that companies are more cautious about their investments in extended reality until the economic situation becomes clearer.”
These trends are expected to continue for most of 2023, although a bright spot will be the arrival of the new Sony PlayStation VR2 headset, driving some consumer demand.
Under these circumstances, the $100 hike in the retail price of the most popular virtual reality headset, the Meta Quest 2, is also dampening sales.
“The Quest 2 was once very attractively priced, just at the sweet spot where the next generation of tech enthusiasts would consider buying one,” says Leo Gebbie, principal analyst for connected devices. “The higher price is more than potential VR device owners are willing to pay, which is a problem for a segment looking for growth.”
Another major barrier to the adoption of extended reality is the time required to build smart, light and attractive augmented reality glasses.
“It’s understandable that big tech players are cautious: no one wants to risk disappointing buyers by releasing a product that isn’t quite ready,” suggests Koytcheva. “We’ve been expecting smart glasses to hit the market for a while now, but the technology is proving difficult to master.”
CCS Insight’s latest forecast now predicts that some devices will be revealed in 2023, with sales in 2024, but not reaching more significant numbers until 2025.
Due to these setbacks, CCS Insight now expects unit sales of extended reality devices to grow slower than expected, reaching 67 million units in 2026. Of these, 11 million, or 16%, will be sold at businesses and other organizations where extended reality technology holds great promise for use in customer support, remote service, training, marketing and more. But the bulk of the sales will be for consumers keen to get their hands on the latest technology.
“The outlook for extended reality remains positive, as the technology is part of the metaverse vision shared by many big players in the industry,” Gebbie says. “The huge sums that have been invested in the Metaverse, despite its nebulous nature, show that there is a real appetite for building immersive spatial computing experiences for all kinds of applications. There’s already a lot of momentum behind this vision, and despite a lull in the coming years, we expect the metaverse bandwagon to keep rolling.
