- VR headset sales were down in 2022, reflecting waning interest in a buggy metaverse.
- Even if consumers wanted to engage with this technology, the current price of headsets makes it inaccessible for many Americans.
- Several huge companies are releasing new VR headsets this year, including Apple, Meta, HTC and PlayStation. However, these new releases might not be enough to cause a peak in consumer interest like VR headsets experienced in 2021.
The metaverse had a bad year. VR headset sales were down 2% year-over-year, falling to $1.1 billion in December 2022. What’s more, these numbers are just for the United States. Globally, VR headsets and AR equipment shipments fell 12% in 2022.
What caused this decline, and what does it mean for the future of virtual and augmented reality?
Numerous factors were working against the metaverse in 2022. Regardless of how many new VR headset models are released in the coming months, most of these problems could continue into 2023.
Pandemic’s effect on VR headset sales
In 2021, revenue from VR headset sales doubled year-over-year. If we look back on that year, a large portion of the population was isolating, waiting to return to their normal life, or waiting for their children to return to in-person schooling.
When you’re limited to your living room, VR can be a great escape. But, when you have the entire world open to you, fewer people may be inclined to explore this new technology.
Another pandemic-related reason for strong sales in 2021 was a holiday shortage of the new PS5. Gifters who wanted to give gaming experiences purchased available VR headsets when they couldn’t get their hands on the season’s most sought-after items.
VR headsets are expensive, making them inaccessible to many consumers. Current prices of the most popular headsets are:
- Meta Quest 2: $399.99
- Vive Pro 2: $799
- PlayStation VR: $199.99
While Playstation’s headset verges on ‘affordable,’ this version came out in 2016. This means that the tech is outdated.
On top of purchasing the headset itself, you often have to pay subscription fees or buy extra accessories that allow you to have the best in-game experience.
In 2022, Meta raised the price of Quest 2 by $100. This was a surprising move, as the Quest 3 is anticipated later this year. Gaming systems usually go down in price as you get closer to the release date of updated hardware.
Citing inflationary pressures, Meta chose to do the opposite. This may have further hurt VR headset sales in 2022. The effect could be particularly pronounced as Meta has a sizable share of the market.
Meta holds the largest stake in the metaverse, but its business strategy in this space has been confusing.
Employees have complained about perpetual shifts in goals, and executives at the company have been known to argue about the best path forward.
If the company leading the charge isn’t sure where they’re going, it makes it harder for consumers to understand how to engage with the product. Until this technology has a clear use case for consumers, its sales could continue to struggle.
VR just isn’t good enough yet
The PS5 was popular in 2021 because the quality of the video gaming experience was phenomenal compared to the metaverse experience.
It’s not just about a lower-quality user experience. The tech is so new that there have been severe delays in getting these headsets to market.
For example, Apple’s headset has been much anticipated and was initially expected to hit the shelves this month. However, citing delays in software development, the company pushed off the product’s launch until the second half of 2023.
New models that could excite the market in 2023
The fact that Apple is releasing its own product could be enough in and of itself to excite the VR headset market in 2023. While the headset is expected to be expensive, loyal Apple customers have proven over time that they’re willing to pay high prices for quality technology.
Apple is also working on a VR headset for business settings.
Other highly-anticipated headsets with 2023 launch dates include:
- Meta Quest 3
- New headset from HTC/Vive
- PlayStation VR 2
Playstation’s headset is particularly exciting as its user base often enthusiastically engages with its new hardware releases. That said, sales will inherently be limited to Playstation owners, which means its impact on the overall adoption of this technology might be limited.
What this means for the Metaverse moving forward
Even with all the anticipated new releases, it’s hard to look at 2023 with any optimism for the metaverse.
New hardware does not fix buggy software. The buggy software has been a significant cause of delays in VR headset releases.
This round of headsets also doesn’t look like they’ll be any more affordable. It’s quite the opposite.
When you couple that with the fact that there’s less of a need to engage with a fictional reality than there was during the pandemic and that consumers are losing large portions of their income to inflation, it’s hard to see a 2023 where the metaverse has a comeback .
This is all taking place while the tech sector faces a decline in investments and revenue. Trade policies with China have further compounded market conditions for this sector. Furthermore, several companies, including Cisco and Meta, have laid off thousands of employees.
That said, no one has a crystal ball. There could be new developments that end up surprising us all.
The bottom line
The metaverse might be floundering, but other sectors of the tech market are on fire.
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