Global VR headset market grows 240% in 2022’s first quarter

Global shipments for VR headsets saw a 241.6% jump year-on-year in the first quarter of 2022 thanks to a continued demand and easing supply, according to a report by the International Data Corporation (IDC).

Meta, the parent company of Facebook, captured 90% of the market with its Quest 2 headset remaining immensely popular, IDC said in its Worldwide Quarterly Augmented and Virtual Reality Headset Tracker report, released on June 30. It said Meta was expected to continue to offer more exclusive content while subsidising hardware. 

Pico, developed by China’s ByteDance, was the second largest supplier with 4.5% share, but has the potential to expand its user base in coming quarters following its recent expansion into many European countries and due to its growing library of consumer-friendly content, IDC said.

Pico has largely operated within China so far while maintaining a presence in many markets elsewhere, primarily in the commercial segment, IDC said. 

China’s DPVR, Taiwan’s HTC, and China’s iQIYI rounded out the top 5 companies with less than 4% share combined.

“Meta continues to pour dollars into developing the metaverse but the strategy of promoting low-cost hardware at the expense of profitability isn’t sustainable in the long run,” said Jitesh Ubrani, research manager for IDC Mobility and Consumer Device Trackers. 

“The good news is that the upcoming productivity-oriented headset from Meta will serve as the starting point for the company’s pivot towards higher revenue generating hardware and will also help provide an uplift in end-user pricing for the entire industry as average selling prices creep up and the tech substantially improves.”

VR shipments are expected to grow further, by 26.6%, to reach 13.9 million units in the entire 2022.  However, 2023 will be a crucial year for the VR and AR industry, IDC said, as Meta, Pico, and Sony are expected to launch next generation devices alongside a headset from Apple that provides a mixed reality experience.

“All eyes will be on Apple as it launches its first headset next year, and while it is tempting to imagine the company shipping high volumes, keep in mind that this is its first headset that will appeal primarily to a small audience of early adopters and Apple fans,” noted Ramon Llamas, research director with IDC’s Augmented and Virtual Reality team. 

“Further iterations will likely show evolution that will grow by leaps and bounds. In the meantime, companies like Meta and Sony already have a strong installed base and pent-up demand that they can tap into. Altogether, this is a strong driver to push the market forward.”