VR headset sales to grow 800% by 2021

An attendee tries out a VR headset at CES 2017

Global sales of smartphone VR headsets will grow fivefold and sales of dedicated VR headsets will grow eightfold between 2017 and 2021, according to new research.

The latest figures from CCS Insight claim that sales of smartphone virtual reality devices will continue to deliver the “lion’s share of unit volumes”, with 70 million expected to be sold by 2021.

Sales of dedicated VR headsets – such as the HTC Vive, the Oculus Rift and Sony’s PlayStation VR – are expected to grow to 22 million units by 2021.

Though smaller by unit sales, the dedicated VR portion of the market is tipped to be worth more. According to the research, it will have a value of US$7.7 billion by 2021, while the smartphone VR segment will be worth $500 million in 2017 rising to approximately $1.4 billion by 2021.

Combined, the total VR device market – smartphone VR and dedicated VR – is expected will be worth US$1.5 billion in 2017, rising to US$9.1 billion by 2021.

CCS Insight said its VR forecast had been adjusted to reflect the “relatively slow start” to this nascent market. However, it claimed that the segment still holds “great potential” and can deliver healthy growth over the next five years and beyond.

The company previously expected 2 million dedicated VR units to be sold in 2016. It now estimates 1.2 million were sold.

“There’s no doubt that dedicated VR headsets can be a tough sell. The complete package of the headset and a high-end PC is out of reach for most consumers and even the PlayStation VR, which can be used with the PS4 games console, has failed to meet expectations,” said chief of research at CCS Insight, Ben Wood.

“Headsets designed for smartphones are the entry point for most consumers when it comes to virtual reality. Google’s Cardboard devices and Samsung’s Gear VR headsets have been the early market makers in this area.

“We expect the momentum to continue at Mobile World Congress next week, with Google’s Daydream headsets being a prominent part of many high-end smartphone launches.”

Turning to the augmented reality market, CCS Insight’s latest forecast indicates that the first “significant unit sales” won’t occur until 2019, when it expects 1.5 million units to be sold. It predicts this to rise to 5 million units in 2021, with a total market value of US$2.5 billion.

“Although there are numerous very promising field trials underway, mass deployments of AR devices remain elusive, with a mere 100,000 units sold in 2016. The focus on enterprise uses and vertical market opportunities means longer sales cycles, exacerbated by the complexities of integration and compliance in workplaces,” said Wood.