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One ongoing misperception in the tech world is that VR has stalled out. Some have even pronounced it dead. Such sentiments reflect the backlash to VR’s circa-2016 hype cycle. It didn’t fulfill world-changing proclamations trumpeted at the time, so it’s earned some mistrust.
But practically speaking, VR is doing just fine and is growing at a healthy pace for an emerging technology that faces practicality headwinds. In fact, signals tracked by our research arm, ARtillery Intelligence, indicate VR is on an upswing after declining about 10 percent in 2020.
That decline was Covid-inflected, given supply-chain impediments. But demand remains strong. And that demand was given a place to go when Oculus Quest 2 launched. Not only did it scratch the right quality/price itch, but Facebook made moves to beef up its supply chain.
And this appears to be working given Quest 2’s continued sales performance. The broader VR market has likewise shown positive signs, which we recently rounded up for Q3. Now as Q4 winds down, we continue the tradition with a critical mass of milestones for a VR data roundup.
Report Card
Jumping in, we’ve aggregated Q4 data points and milestones for this week’s Data Dive (announcements happened in Q4, though some track prior-period activity). Here they are…
Usage Milestones
– Gorilla Tag hits 1.5 million players.
– Oculus Quest 2 grows to 35 percent of SteamVR headset usage.
– Road to VR names the 20 best rated & most popular Quest games & apps.
– Beat Saber, Rec Room, Skyrim are PSVR’s most-played games.
– More than two years after launch, Valve Index is now the second most-used headset on Steam.
– Sony reveals top-5 most played PSVR games ever.
Revenue/Sales Milestones
– Beat Saber passes $100 million in revenue on Quest platform alone.
– Survios’ Creed: Rise To Glory has sold more than one million copies.
– Bank of America rolls out global VR employee training program at 4,300 locations.
– Accenture orders record 60,000 Oculus headsets.
Funding and M&A
– Meta acquires VR and AR optics technology company ImagineOptix.
– Rec Room social gaming platform raises $145 million at a $3.5 billion post-money valuation.
– Meta’s acquisition of ‘Supernatural’ reportedly cost $400 Million.
– Chicken Waffle launches XR creator fund for indie devs.
– Admix raises $25M for in-game advertising as brands seek gamers.
– Somnium Space expands metaverse ambitions with teslasuit investment.
– Sandbox VR expands to new locations globally with $37 million Series B led by A16Z.
– Lynx R-1 MR headset kickstarter comes to an end with more than $800,000.
– Ultraleap’s mid-air haptics tempts Tencent to join its $82M Series D fundraising.
– ManageXR grabs $4 million seed round to scale XR business.
– Social VR startup HIKKY raises $57 million from NTT Docomo.
Market Sizing
– Insider Intelligence projects VR content revenues to nearly quadruple over the next 4 years, from $2.16 billion in 2021 to $8.31 billion in 2025.
– Our research arm, ARtillery Intelligence, estimated in November that Oculus Quest sold almost 1.4 units in Q3 (based on earnings), bringing Quest 1 & 2 cumulative lifetime total to 5.9 million units at the time. The firm’s estimate for the current installed base is 7.32 million.
Road to 10-Million
Zeroing in on that last item, Quest 2 sales continue to show strong signs. We’ll have more clues for Q4 unit sales when Meta releases its earnings in about a month. Meanwhile, Q3 sales indicate momentum, and Q4 should see a boost due to the always-robust holiday period.
Furthermore, Quest 2’s installed base continues to ratchet up, which is important to attract developers to the platform. This process is happening naturally as the hardware base grows. But it’s also something Meta continues to accelerate through heavy investment in VR.
This is all in the interest of getting the flywheel spinning. As Mark Zuckerberg often says, content drives hardware sales, which in turn incentivizes more content….and around we go. For a fully-actualized content ecosystem, he says that Oculus needs 10 million units in market.
How long will it take to reach that goal? As noted, ARtillery pegs Quest’s lifetime sales at 7.32 million units. At its current rate, 10 million in-market units (which is different than annual sales) will be reached in the first half of 2022. More to come tomorrow as we dive into 2022 predictions.
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