- The fall was cushioned by the introduction of Sony’s next-generation PSVR2 and Meta’s price reduction of the Quest 2.
- The market is highly anticipating the launch of next-generation VR headsets in 2023 whose prices are expected to hover around $500.
Headset shipments in the global extended reality (XR) market, comprising augmented reality (AR) and virtual reality (VR) headsets, fell by one third year-over-year in the first quarter of 2023, as consumer interest waned due to the lack of updates in market leader Meta’s Quest series.
The blow to the market was cushioned by the introduction of Sony’s next-generation PSVR2 and Meta’s price reduction of the Quest 2. Meta retained its position as the top-selling global XR headset brand, with its Quest 2 emerging as the best-performing VR headset.
The Quest series has shipped a total of over 20 million units as of Q1 2023, with the Quest 2 accounting for 18 million of those units. Despite that, Meta’s overall shipment share dropped to 49% in Q1 2023, marking its lowest share since the introduction of the Quest 2 in Q4 2020, after Sony launched the PSVR2, which is a successor to its 2016 headset
With the latest launch, Sony has secured the second position in Q1 2023 with a market share of 32%. The PSVR2 shipped 1.2 times more units than its predecessor during the first quarter following its launch.
Meta plans to bolster its sales further by making the Quest 2 more affordable through price reductions. The company’s announcement of the launch of Quest 3 later this year, is expected to drive sales and build upon the success of its predecessor.
Pico and DPVR claimed the third and fourth positions, respectively, with market shares of 7% and 6%. Pico experienced a 38% decline in shipments during Q1 2023, despite an initial improvement after being acquired by ByteDance, the parent company of TikTok. Pico’s decline in market share can be attributed to a lack of appealing consumer use cases and limited availability of high-quality content.
DPVR’s shipment volumes primarily rely on its strong relationships with enterprise partners, who regularly place orders for several thousand units. Delays in orders from education sector partners resulted in a 40% decline in DPVR’s shipments during Q1 2023.
The market is highly anticipating the launch of next-generation VR headsets in 2023, including the release of Sony’s PSVR2, DPVR’s E4, and HTC’s Vive XR Elite. These headsets boast advanced technology and features, but their retail prices hover or exceed $500, hindering their sales potential. Ultimately, the success of these VR headsets will depend on how consumers perceive the value they deliver.
