New Study Projects VR Revenue to Reach $22.4 Billion by 2025

ARtillery Intelligence publishes its five-year outlook for VR revenues.

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SAN FRANCISCO, November 18, 2021: ARtillery Intelligence today released a new report that projects VR revenue to grow from $4.49 billion in 2020 to $22.4 billion in 2025, a 37.9 percent compound annual growth rate. Entitled VR Global Revenue Forecast, 2020-2025, the report examines VR revenue totals and subsegments – including consumer and enterprise spending.

Consumer spending (hardware and software) holds a leading share of VR revenues with an estimated $5.67 billion in 2021. This is driven by gaming’s dominance as a VR use case but will broaden to other categories over time, including entertainment and communications. Enterprise spending trails with $3.44 billion, due to relatively-narrow applicability in industrial settings.

In all cases, VR’s biggest accelerant is Meta’s ongoing investments, including Quest 2. Meta has priced the device’s base model competitively at $299, which is part of its longer-term strategy to build a network effect in VR, and to gain an early-mover advantage in the metaverse.

“Quest 2 has an unmatched user experience in its class, and a mainstream-friendly price point,” said ARtillery Intelligence Chief Analyst Mike Boland. “This flows from Meta’s aggressive loss-leader pricing and its drive to accelerate its high-stakes metaverse ambitions.”

As for VR’s aggregate growth in 2021, it’s driven by Quest 2’s first full year in the market, as well as a broader Covid rebound. After declining about 10 percent in 2020 due to supply-chain impediments, aggregate VR hardware unit sales are on an upswing. This growth will sustain in the near term due to VR’s alignment with post-Covid demand signals like gaming, virtual events and hybrid/remote work.

“VR sales have bounced back given Meta’s efforts to reinforce its supply chain to meet heavy demand for Quest 2,” said Boland. “That plus downward pricing pressure and gradual cultural acclimation to VR will position Meta to reach its goal of 10-million in-market VR headsets in 2022.”

Figures reflect market factors at the time of creation. Always see chart date for context, and refer to newer projections if applicable.

Report Availability

VR Global Revenue Forecast, 2020-2025 is available to ARtillery PRO subscribers, and more can be previewed here. This report follows ARtillery Intelligence’s separate examination of mobile AR and headworn AR spending.

About ARtillery Intelligence

ARtillery Intelligence chronicles the evolution of spatial computing (AR, VR and the metaverse). Through writings and multimedia, it provides deep and analytical views into the industry’s biggest players, opportunities and strategies. Products include the AR Insider publication and the ARtillery PRO research subscription, which together engender a circular flow of knowledge. Research includes monthly narrative reports, market-sizing forecasts, original consumer survey data and multimedia – all housed in a robust intelligence vault. Learn more here.