Despite a lot of bellyaching about the Metaverse, both here and elsewhere online, it appears that interest in this elusive future reality is beginning to drive a lot of growth in the Virtual Reality (VR) and Augmented Reality (AR) industries. A new report from research firm Trendforce paints a rosy picture of the AR and VR market this year, predicting that shipments of headsets will increase substantially, and that the lion’s share of the spoils will land directly in Meta’s coffers, thanks to its Quest 2 VR headset. The majority of the AR business will land in Microsoft ‘s court with its Hololens 2 device, which is aimed at enterprise customers.
Big picture, Trendforce anticipates shipments of headsets to boom in 2022 as more and more people continue to discuss the so-called metaverse. The firm predicts headset shipments will rise to 14.19 million units in 2022 compared to 9.86 million in 2021, which is a year-over-year increase of 36 percent. The report notes that it anticipates continued demand for “remote interactivity” due to the pandemic, but that seems like a shaky claim in mid-February as many big firms are already making announcements about having employees return to the office in March or shortly thereafter. Of course, the pandemic is quite unpredictable to say the least, so nobody knows what the future holds. Regardless, the report hints that the longer employees are working from home, the more pressure there will be for new interactions that are more fulfilling than a simple video conference, which is where AR/VR come into the picture.
The report notes that currently the market is essentially divided in two, with Meta Quest being the most popular headset for client VR, and Microsoft Hololens being number one for enterprise AR. It says this category should be really exploding right now what with all the metaverse chatter, but two big challenges are holding it back. Chief among them is the ongoing chip shortage, but it’s also been difficult to develop new technologies, such as pancake optical elements. The report also notes that since there currently are no competitive VR/AR headsets even on the horizon, that the Meta Quest and MS Hololens will remain the dominant forces in this industry at least until 2023.
Interestingly we do know of several headsets that are in the works. As the report discusses at this early stage it’s anyone’s guess as to how they will perform, or whether they will reshape the market. For example, last October Facebook announced it was working on a new, high-end headset called Project Cambria. This “Meta Quest 3” model would theoretically compete with Valve’s pricey Index headset, but the analysts at Trendforce says this is irrelevant as the market for VR is going to be in the $200 to $200 range, not the $700 plus it expects the Quest 3 to hit (Valve’s Index is $999). Apple is reported to be entering the high-end VR/AR market as well, with the latest report indicating its first headset is now delayed until 2023. Although reports predicted Apple would be competing with Meta in the consumer space, Trendforce thinks that due to the tight integration between hardware and software in the commercial space, as well as the lucrative subscription software model it requires, Apple will instead make its headset for businesses, and go after Microsoft’s Hololens’ enterprise customers at first.
Finally, there’s Sony, which announced very impressive specs and details for its next-gen VR on the Playstation 5 a little while ago. However, the analysts at Trendforce say it won’t matter, at least not in 2022, because everything will be delayed into 2023 anyway due to pandemic-related shortages. That basically leaves the entire market to Meta and its Quest 2 headset. Right now it’s the only readily available and affordable VR headset available. All the other options from Valve and HTC are simply too expensive to be anything other than ultra niche products for well-heeled gamers.