VR Content Spending Sees 10% Decline in 2023 Amidst Headset Sales Slump

The virtual reality content market experienced a 10% year-over-year decline in consumer spending, reaching $844 million in 2023, according to a report by analytics firm Omdia. The report cites global inflation and the disappointing performance of headsets such as Meta Quest 3, PSVR2, and Pico 4 as key factors contributing to this decline. Omdia notes that Meta's limited augmented reality content and the high price point of Quest 3 deterred upgrades and failed to attract new users. Meanwhile, PSVR2 suffered from a lack of compelling releases, and Sony's shift in focus towards expanding PS5 peripherals further hindered its adoption. The report also highlights that ByteDance's reduced VR ambitions significantly impacted Pico, resulting in canceled projects and a lack of competitive VR content, despite the well-received Pico 4 hardware. George Jijiashvili, senior principal analyst at Omdia, predicts that the introduction of new hardware in 2024, such as the Nintendo Switch 2 and mid-generation system refreshes, may lead to headsets becoming a lower priority for consumers. Furthermore, the tech industry's increased focus on AI and lack of investment in VR, except for Meta, is expected to exacerbate the decline in consumer spending on VR content. Despite this, Omdia's report notes that the active installed base for VR headsets stands at 23.6 million in 2023. VR headset sales totalled 7.7 million units in 2023, representing a 24% decrease from the previous year. Looking ahead, Omdia forecasts a 13% decline in unit sales for both 2024 and 2025. However, the firm estimates that consumer spending on VR content will reach $2.3 billion by 2028.