New Study Projects VR Revenues to Reach $19.75 Billion by 2028

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

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ARtillery Intelligence has released a new report that projects VR revenue to grow from $11.02 billion in 2023 to $19.75 billion in 2028, a 12.37 percent compound annual growth rate. Entitled VR Global Revenue Forecast, 2023-2028, the report examines VR revenue totals and subsegments – including consumer and enterprise spending.

Enterprise spending (hardware and software) holds a leading share of VR revenues with an estimated $6.93 billion in 2023. This is driven by immersive training, design collaboration, and other ROI-driven use cases. Consumer spending trails with $4.1 billion, led today by gaming but broadening over time to other categories including entertainment and communications.

In all cases, VR’s biggest accelerant is Meta’s ongoing investments. The flagship Quest 3 remains competitively priced, starting at $499 – a central piece in Meta’s longer-term strategy to jumpstart a network effect through loss-leader pricing. Meanwhile, sales have slowed in the first half of 2024 relative to Quest 3’s Q4 2023 launch – a record sales quarter for Meta. But a rebound is projected in Q4, driven by the standard holiday inflection that past Quest variants have enjoyed. Quest 3s sits at an especially giftable price point.

“Quest 3 came along at the right time when Quest 2 was approaching the end of its lifecycle and consequently saw flagging sales,” said ARtillery Intelligence Chief Analyst Mike Boland. “Quest 3 also offers the added appeal and dimension of mixed reality and passthrough AR. Along with the more affordable Quest 3s, it could continue to drive a replacement cycle for Quest 2 owners.”

Elsewhere in the competitive landscape, PSVR 2 faces challenges in market traction following its strong start in early 2023. Sales have since declined considerably, but Sony hopes to boost demand through compatibility with gaming PCs that let users access a broader range of SteamVR titles. Meanwhile, other notable players include Pico and HTC, which each launched new hardware variants in the past few months. However, Meta still carries a considerable edge, due to the loss leader pricing noted above, R&D investment in its Reality Labs division, and a richer content ecosystem.

“Meta continues to elevate content by motivating developers through a larger hardware base, as well as acquiring game studios outright,” said Boland. “The latter not only injects cash but incentivizes content creators to enter the market – and venture funding to fuel them – through validated exit potential. Put another way, as with most media and tech, content is king.”

Report Availability

VR Global Revenue Forecast, 2023-2028 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 (including Apple Vision Pro projections).

About ARtillery Intelligence

ARtillery Intelligence chronicles the evolution of spatial computing, otherwise known as AR and VR. 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. Research includes monthly narrative reports, market-sizing forecasts, consumer survey data, and multimedia, all housed in a robust intelligence vault. Learn more here.