Sales of VR and AR Headsets Plummet 40% in 2023
According to data from research firm Circana, sales of VR headsets and augmented reality glasses in the U.S. saw a 40% drop to $664 million in 2023. This marks a much steeper decrease compared to the previous year when sales of AR and VR devices slid 2% to $1.1 billion.
The decline over the past two years highlights Meta’s ongoing challenge of bringing immersive technology to the mainstream. Despite Mark Zuckerberg’s 2021 announcement that it could take up to a decade to reach a billion users, the company now needs to find ways to show more optimistic data to appease shareholders who have been critical of its large and risky investments.
Moreover, Meta’s Reality Labs, which is dedicated to developing VR and AR technologies, has been facing significant financial losses. It reported a loss of $3.7 billion in the third quarter of 2023 on sales of $210 million. Overall, the division has accumulated losses of about $25 billion since 2022.
Although Meta has launched the Quest 3 VR in October, with initial strong sales and a 42% increase in sales during the holiday period, there’s still a lack of a breakout app that has wide appeal among mainstream consumers.
The company is hoping that developers will create compelling apps and games for the Quest 3, which features a passthrough feature allowing for augmented reality experiences mixing digital graphics with real-world experiences.
Looking ahead, the VR market might see new competition as Apple is gearing up to launch its Vision Pro mixed-reality headset next year. Priced at $3,499, analysts believe Apple is targeting early adopters, developers, and companies as potential customers. Its entry into the market could bring more attention to the small market and force other companies to compete in different ways.
As the VR market continues to evolve, Meta and other tech giants will have to adapt to changing consumer demands and technology improvements to maintain their relevance in the long run.