AR/VR Headset Market Continues to Decline as VR Sets Plummet

The first quarter of 2023 saw further declines in the AR/VR headset space, following a steep decline the previous year, according to market research firm IDC. 

In 2022, AR/VR headset manufacturers shipped 8.8 million units in all of 2022, down 20.9% over the previous year. Now, in the first quarter, shipments fell even further — 54.4% compared with the same period last year. All of the decline was driven by VR headsets. AR headsets actually climbed 12.6% year over year. But AR makes up only 3.8% of the AR/VR headset market.

IDC noted that worsening macroeconomic conditions were one of the major drivers of the decline in VR headsets but said this is an "exciting time" for VR, as new headsets with expanded capabilities are expected to roll out in the coming weeks and months.

According to IDC: "Among the top 5 AR/VR headset makers, Meta continued to lead with 47.8% share although it did lose ground to Sony's PSVR 2, which captured 35.9% share during the quarter. ByteDance (Pico) managed to grow its share from 4.4% last year to 6.1% this year thanks to new products and new markets. DPVR and HTC rounded out the top 5 with each having less than 2% share."

Said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC: "After Sony reemerging as a major competitor to Meta, all eyes are on Apple, which has yet to announce its headset. Apple's sizeable installed base of existing products and services will certainly help set the company's headset apart from other AR/VR vendors though Apple's share gains will be limited in the near term given the rumored prosumer approach and hefty price tag associated with the headset."

"It's amazing to see the new features and functionalities appearing on AR/VR headsets today, and although they may appeal to a select audience initially, these will evolve and eventually gain salience with users," said Ramon T. Llamas, research director for Mobile Devices and AR/VR at IDC, in a statement. "Features like eye tracking and environmental sensors, and the potential of AI-powered experiences and software – all of which are in their infancy today – will eventually become more ubiquitous and spur new use cases. Even the AR/VR headsets arriving as early as 2025 will make today's headsets look quaint."

For more information, visit IDC's Worldwide Quarterly Augmented and Virtual Reality Headset Tracker.

About the Author

David Nagel is the former editorial director of 1105 Media's Education Group and editor-in-chief of THE Journal, STEAM Universe, and Spaces4Learning. A 30-year publishing veteran, Nagel has led or contributed to dozens of technology, art, marketing, media, and business publications.

He can be reached at [email protected]. You can also connect with him on LinkedIn at https://www.linkedin.com/in/davidrnagel/ .


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