Extended Reality Gets a Needed Boost
- CCS Insight forecasts 71 million virtual and augmented reality devices will be sold in 2025, with a market value of $22 billion
- Solid sales in 2021 underpin the firm’s consistently positive forecast
- The unveiling of Meta’s vision for the future helps consumers and industry better understand some of the uses for extended reality headsets that will boost their adoption
London, 24 November 2021: Two streams are merging to support an optimistic outlook for the future of extended reality: stellar growth in sales of the popular Oculus Quest 2 virtual reality headset, and a flourishing appetite among businesses for extended reality solutions — both virtual reality (VR) and augmented reality (AR).
Worldwide unit sales of headsets are expected to reach 11 million in 2021, up almost 50% from 2020, according to the latest forecast by technology market analyst firm CCS Insight. This has led the company to broadly confirm, with a minor increase, its previous forecast; it now expects 71 million VR and AR devices to be sold in 2025, with a manufacturer value of $22 billion.
“The pandemic gave a needed boost to extended reality, which helped relieve people of boredom”, comments Marina Koytcheva, Vice President of Forecasting at CCS Insight. “But our forecast was always based on the assumption that growth over the next five to 10 years will come not from gaming alone, but also from extending the new technology into uses with other forms of visual entertainment, like video, education, searching for information, participating in remote events or socializing. Recently, Meta, the new company name for Facebook, gave everyone an idea of what this might look like, and more importantly, it signalled its intentions to build an open platform for the metaverse and to invest a lot of resources into turning this vision into reality — a virtual one for users and a very real one for any business that takes part in the new ecosystem.”
Leo Gebbie, Principal Analyst for Connected Devices at CCS Insight, adds, “The metaverse has become the hottest topic in technology, thanks to Mark Zuckerberg’s determination to raise the profile of this concept. It remains little more than an idea at present, but many firms — including Meta — have identified a more-spatial version of the Internet as a major disruption to the world of computing. There’s far more hype than useful discussion at the moment, but the narrative does lend itself to extended reality, as virtual and augmented reality devices will undoubtedly be important to spatial computing in the future”.
The second stream helping the extended reality space comes from businesses. Just like consumer demand, enterprise adoption of AR and VR was given a significant lift by the pandemic, with companies accelerating their adoption of out-of-the-box solutions to enable remote assistance, collaboration and training. “In this next phase, where remote and hybrid work remains a central tenet of business transformations, we see organizations rapidly expanding the scope of extended reality, integrating the technology with their existing systems and security infrastructure as it becomes more embedded in their processes,” says Angela Ashenden, Principal Analyst for Workplace Transformation at CCS Insight.
A growing number of devices in companies that have already adopted extended reality complements growth coming from the spread of the technology among new adopters in the business sector. Altogether, enterprises are expected to account for 18% of VR and AR unit sales in 2021; in 2025, business around the world will buy over 13 million extended reality devices.
The forecast for such a young market carries a lot of unknowns, and one of them is nested in segments of the market that are yet to appear. “For the VR and AR market to reach 71 million units in 2025, we expect to see the arrival of attractive AR smart glasses targeted at tech enthusiasts, as well as lower-priced VR devices that use the processing power of smartphones”, explains Koytcheva. CCS Insight expects both segments to emerge in the next two years, before starting to have a noticeable impact in 2025, when over 10 million consumer AR smart glasses, and almost 8 million VR devices that tether to a smartphone are projected to be sold worldwide.
A summary of CCS Insight’s new forecast is presented in the chart below.
More details of CCS Insight’s extensive VR and AR research service can be found at www.ccsinsight.com/research-areas/virtual-and-augmented-reality
Notes to editors
CCS Insight is a leading provider of research on the extended reality market. Its VR and AR device forecast covers several product segments and presents three scenarios (core, low and high) that plot the effects of different market developments.
This forecast is part of a broader suite of research into extended reality technology, including an extensive database of devices in this area, regular reports and updates on the latest announcements, events and news.
About CCS Insight
CCS Insight is a global analyst company focussing on current and future trends in technology. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.
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