VR headset shipments fell further than expected last year

Analyst firm IDC has served up a harsh dose of reality for those dreaming of an AR/VR future.

Nick Wood

March 9, 2023

3 Min Read
Metaverse VR

Analyst firm IDC has served up a harsh dose of reality for those dreaming of an AR/VR future.

Stats published on Wednesday showed that shipments of augmented/virtual reality (AR/VR) headsets totalled 8.8 million units last year, a decline of 20.9% on 2021. This is noticeably lower than IDC’s prediction of around 9.7 million units, which came out as recently as December.

Adding to the gloom, that December prediction was itself an update of IDC’s forecast last March. That was much more optimistic, predicting that AR/VR shipment volumes in 2022 would grow an impressive 46.9% on 2021, when volume reached 11.2 million units. Had that been on the money, the industry would be congratulating itself right now for shipping nearly 16.5 million headsets, almost double what it actually shipped.

“The decline was not completely unexpected,” said IDC, “given the limited number of vendors in the market, a challenging macro-economic environment, and a lack of mass market adoption from consumers.”

Hmm, there is a fairly strong argument that compared to this time last year, this outcome was very much unexpected.

“The results for 2022 were also hindered by difficult comparisons to the prior year, when the market was bolstered by Meta’s Quest 2 and strong spending by consumers stuck at home with disposable income for entertainment. As the Quest 2 approached its two-year anniversary and as global economies opened up, consumer and business spending shifted away from AR and VR headsets leading to the decline in 2022.”

The perfectly rational notion that confining people to their homes for a year would result in pent-up demand for in-person, outdoor activities rather than expensive, niche peripherals seems to have been lost on some.

Just look at Meta. The Facebook parent and owner of VR headset maker Oculus is slashing thousands of jobs after it wrongly assumed that doing everything at home and online had become the new normal. Similar excuses were served up by Amazon, Microsoft and Google when they made their own mass-redundancy announcements.

Back to AR/VR, and aforementioned Meta seems to be propping up the whole market. According to IDC, it accounted for 80% of shipment volume last year. China-based Pico, which was acquired in 2021 by TikTok parent ByteDance, ranks second with 10 percent. That leaves the rest of the market fighting for scraps. Surely if they don’t gain meaningful traction soon, questions will be asked about how long they can stick it out for.

Earlier this week, the Next G Alliance (NGA) published a report which outlined the device-side and network-side requirements to make immersive, multi-sensory extended reality (XR) a mass market proposition. In short: there are a lot. However, if all the pieces of the puzzle fit together, then the NGA said there could be a billion XR devices in use by various sectors of the economy by 2030.

Given how the industry faired in 2022 though, 2030 is already beginning to look a little early.


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About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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