Total Virtual Reality Market (VR) to Reach Over US$4 Billion Despite COVID-19’s Blow to the Location-Based VR Segment
ABI Research, a global tech market advisory firm, expects the Virtual Reality (VR) market to grow in 2020, passing US$4.6 billion despite some negative impacts from the COVID-19 pandemic. The location-based VR segment has been hit the hardest, with closures (both temporary and permanent) and reduced foot traffic – the pandemic also engendered some supply chain issues and in-demand devices, like the Oculus Quest, have faced stockouts. The pandemic, however, has also accelerated some trends and increased interest and adoption of immersive technologies.
Principal Analyst Michael Inouye explains, “Public-facing venues, social distancing, and concerns surrounding COVID-19 have presented challenges for the location-based VR market and many expect these issues to linger beyond the pandemic. VR, however, is not only a technology that typically isolates the user but also is primarily used indoors – two attributes that some, under normal conditions, might view as detriments but in a pandemic are virtues. There have been significant upticks in interest for remote training, collaboration, and of course, entertainment as both companies, individuals, and families contend with the pandemic and what might become a new normal.”
While stockouts were occurring before the pandemic, social distancing coupled with popular gaming titles (e.g., Valve’s Half-Life: Alyx) have kept demand higher than many anticipated pre-pandemic. In addition, companies like VRtuoso and Glue have benefited from heightened interest in training/education and collaboration, while companies such as XRHealth operating within the immersive healthcare sector have seen accelerated growth opportunities as patients seek alternatives to in-person meetings and sessions (e.g., physical and/or mental health therapy). Growth in 2020 is still predicated on supply better meeting demand and continued heightened interest – looking further out, the previous 2024 forecast of US$24-US$26 billion is still holding up as the accelerated growth in other enterprise and consumer markets are expected to make up for the declines in location-based VR.
Inouye concludes, “Immersive technologies continue to elicit a wide breadth of viewpoints and expectations, but increasingly the market that some felt better resembled other technologies like 3D TVs, is drawing more parallels to the early stages of transformative technologies like smartphones. While we are certainly far from a future where immersive technologies are ubiquitous, there is more room for optimism when we compare immersive tech to the devices and platforms that came before the duopoly between iOS and Android.”
These findings are from ABI Research’s Virtual Reality Market Data: Devices, Verticals, and Value Chain market data report.
