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December 3, 2018updated 19 Jul 2022 9:42am

Smartphone VR Headset Sales “Collapse” as Interest Wanes

"Content is the key to unlocking adoption of VR"

By CBR Staff Writer

Smartphone-based Virtual Reality (VR) headsets sales have “collapsed”, technology analysts CCS Insight say in a new report.

Sales have tumbled from eight million units in 2017 to fewer than three million this year: “This steep decline has occurred despite heavy price cuts and extensive promotions over the past 12 months” CCS said.

The company’s chief of research, Ben Wood blamed a lack of good content and a move away from cheap cardboard-based phone headsets, although interest in smartphone VR headsets like the Samsung Gear VR and the Zeiss One Plus VR has also waned, he noted.

He said: “We continue to believe that content is the key to unlocking adoption of VR. Although some games companies and adult content creators have embraced VR technology, much more needs to happen to persuade consumers that VR devices are a must-have item”.

“We expect the next wave of adoption to come from dedicated devices that offer a more compelling, wire-free experience”.

Read this: Tech Consortium Agrees to Industry Standard for VR Headset Cable

Business, as opposed to consumer uptake, is hardly booming either.

Wood said: “We are seeing a rising number of companies committing to deployments of tens or hundreds of augmented reality glasses as they start to see the clear benefits of head-worn technology in the workplace… [but] despite this gathering momentum we still think it will take time for the AR device market to grow. We don’t expect cumulative sales to exceed 1 million worldwide before 2021”.

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VR Headset Sales: Will Standardisation Help?

Hardware makers are increasingly working to standardise product specifications, in a bid to prevent further market fragmentation.

As Computer Business Review reported earlier this year, chip maker AMD, Microsoft, GPU specialist NVIDIA, VR headset maker Oculus and game developer Valve have co-released specifications for a hardware-agnostic, industry standard “VirtualLink” – a specification for a standardised USB cable for VR headsets.

CCS Insight expects adoption of such standalone devices to be the key driver of VR adoption in the next few years by both consumers and businesses.

Its latest forecast continues to be bullish on the market outlook: it anticipates that demand will grow over 16 times between 2018 and 2022, when 29 million standalone VR headsets are forecast to be sold.

The research comes a week after Bloomberg reported the US Army has awarded Microsoft a $480 million contract to supply it with up to 100,000 HoloLens AR headsets for training and combat purposes.”

The contract is intended to “increase lethality by enhancing the ability to detect, decide and engage before the enemy,” according to a government description of the programme.

Browsers like Mozilla’s Firefox meanwhile are continuing to anticipate a significant uptick in web-based mixed reality (XR), with Firefox on Friday launching the latest iteration of its Firefox Reality; a browser designed for standalone VR headsets.

The latest version, Firefox Reality 1.1, aims to help users “move seamlessly between the 2D web and the immersive web.” It adds voice search and seven new languages.

Read this: AR Goggles for Enterprise Use: Business Interest and Product Range Heat Up

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