Virtual Reality (VR) Headset Shipments Plummet

Virtual reality headsets – video game technology briefly championed as a home entertainment savior – appear to have lost their mojo among consumers.

Global shipments of VR headsets dropped 33.7% in the second quarter of 2018, according to new data from the International Data Corporation (IDCWorldwide Quarterly Augmented and Virtual Reality Headset Tracker.

Tethered VR headsets declined 37.3% as major brands such as Oculus and Sony were unable to maintain consumer demand following price reductions in the previous-year period, according to IDC.

The report said the two brands managed to ship 102,000 and 93,000 headsets respectively in the period. The category leader, HTC, shipped close to 111,000 headsets (excluding the standalone Vive Focus) thanks to the growing popularity of the Viveport subscription service as well as the launch of the Pro headset.

Screenless viewers, which enjoyed initial popularity when Samsung, Alcatel, and Google bundled the headsets with smartphones, has seen consumer interest dwindle. The category has shrunk from 1 million headsets in Q2 2017 to 409,000 units this year. This category was the largest contributor to the decline in shipments for the overall VR headset market.

“One of the major issues with the VR market is that consumers still find it difficult to try a VR headset,” Jitesh Ubrani, senior research analyst for IDC, said in a statement.

IDC expects this to be a temporary setback as the VR market finds its legs. The arrival of new products, such as the Oculus Go and HTC Vive Pro, and new brands, combined with the need for greater headset fidelity all point to a positive outlook for the quarters ahead.

“This is where the commercial market has an opportunity to shine,” said Ubrani. “HTC’s recent partnership with Dave & Busters or Oculus’ work with schools around the world stand to play an important role in educating and enticing consumers to use VR.”

Indeed, standalone VR headset shipments grew 417.7% in the quarter, largely due to the global availability of the Oculus Go/Xiaomi Mi VR, which managed to ship 212,000 headsets.

While the consumer side of the VR headset market remains the focus of attention, the commercial side is gaining traction. In Q2, roughly 20% of VR headsets were destined for the commercial sector, up from 14% last year. Along with the increase in share, average selling prices have also increased from $333 to $442 during the same period.

“In a market where mainstream VR content is still lacking, a growing number of vendors are looking to commercial as a way to build their business while they wait for the consumers to catch up,” said Tom Mainelli, VP, devices and augmented and virtual reality at IDC. “These vendors are moving beyond entertainment-focused deployments to real-world training scenarios in companies of all sizes, all over the world. IDC expects commercial buyers to represent an increasingly important percentage of the market going forward.”

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