An 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 flak.

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 a bit in the Covid era.

That decline was partly due to supply-chain impediments. But demand remains strong. And that demand was given a place to go when Oculus Quest 2 launched in late 2020. Not only did it scratch the right quality/price itch, but Meta 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 Q4 ’21. Now as Q1 closes, we continue the tradition with a critical mass of milestones for a VR data roundup.

VR Global Revenue Forecast, 2020-2025

Report Card

Jumping in, we’ve aggregated Q1 data points and milestones for this week’s Data Dive (announcements happened in Q1, though some track prior-period activity). Here they are…

Usage Milestones

– VR’s favorite melee combat sim is making a killing on Quest.

– Quest App Lab soars to nearly 850 apps, more than doubling those on the main store.

– The 20 best rated & most popular Quest games & apps – March 2022.

– New VR users on Steam grew by 11 percent in 2021, unique play sessions up 22 percent.

– VR is 44 percent more addictive than flat gaming.

– The 25 best Oculus Quest and Meta Quest 2 games – Spring 2022.

– More than 50 percent of VR headsets used on Steam are Quests.

– The 20 best rated & most popular Quest games & apps – February 2022.

– Beat Saber & Job Simulator are PSVR’s most downloaded games of the year….again.

– Steam sees huge growth In Quest 2 users over Christmas.

– The 20 best rated & most popular Quest games & apps – January 2022.

– Quest 2 pushes Meta headsets to 2/3 of SteamVR VR users.

– Meta’s social VR platform Horizon hits 300,000 users.

Funding and M&A

– Liv raises $8.5 million to enable easy streaming for AR and VR creators.

– Autodesk acquires XR firm The Wild.

– Anzu closes its latest funding round with $20 million raised.

– nDreams announces $35 million investment, working on PSVR 2 titles.

– Surgery training platform ‘Osso VR’ secures $66 million Series C financing.

– Qualcomm announces $100 million ‘Metaverse Fund’ for VR/AR developers.

– Ramen VR closes $35 million Series B round led by Anthos and Dune.

– XRHealth secures $10 million in funding to expand its VR healthcare treatment in the Metaverse.

– PortalOne secures $60 million for MR gaming platform.

– The Sandbox pledges $50 million to Metaverse Startups.

– Alta closes $12.4 million seed round led by Makers Fund and Andreessen Horowitz.

– Alpha Metaverse Technologies to acquire Shape Immersive.

– Epic Games awarded grants to 31 XR projects in 2021 through the $100 million MegaGrants Fund.

– AmazeVR gets another $15 million to forge the future of immersive concerts.

– Ready Player Me raises $13 million in funding.

– Talespin raises $20 million to train workers using spatial technologies

Market Sizing

– Our research arm, ARtillery Intelligence, estimated in February that Meta sold almost 5 million Quest 2’s last year bringing Quest 1 & 2’s cumulative lifetime total to 7.36 million units at the time.

Did Meta Sell 5 Million Quest 2s Last Year?

Road to 10-Million

Zeroing in on that last item, Quest 2 sales continue to show strong signs. We’ll have more clues for Q1 unit sales when Meta releases its earnings in about a month. Meanwhile, Q4 and full-year 2021 sales indicate momentum, which factors in typical holiday sales inflections.

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 Meta needs 10-million units in market.

How long will it take to reach that goal? As noted, ARtillery pegged Quest’s lifetime sales at 7.36 million units in February. At its current rate, 10 million in-market units (different than annual sales) could be reached in the first half of this year. That means this quarter….or it’s already happened.

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