Metaverse fails to meet expectations as VR headset sales shrink in 2022
Virtual reality (VR) technology, once hailed as the next big thing in the tech industry, has yet to live up to its hype. According to data acquired by CNBC from research firm NPD Group, sales of VR headsets in the U.S. declined 2% to $1.1 billion in 2022, while analyst firm CCS Insight reported that worldwide shipments of VR headsets and augmented reality devices fell 12% to 9.6 million during the same period. These figures represent a setback for companies like Facebook, which has invested heavily in the development of its metaverse and VR technology.
Meta is struggling to gain widespread traction
In 2019, Facebook CEO Mark Zuckerberg announced that the company would be rebranding as Meta and investing billions of dollars in the development of the metaverse, a virtual world in which people can interact and do business. Zuckerberg has stated that he expects it to take up to a decade for the metaverse to go mainstream and that it will eventually host hundreds of billions of dollars in commerce. However, the slow adoption of VR technology and the decline in sales and shipments of VR headsets suggest that this goal may be more difficult to achieve than Zuckerberg anticipated.
Despite being the market leader in the VR market, Meta has struggled to make people excited about buying into VR technology and the metaverse due to the high cost of its VR headsets, the Quest 2 and Quest Pro. The Quest 2, which was released in 2020, has seen sales drop in 2022 due in part to Meta's decision to raise the price of the headset by $100. In an effort to appeal to businesses, Meta also released the Quest Pro in the fall of 2022, but this headset is significantly more expensive than the Quest 2, costing $1,100 more and making it far less accessible to VR enthusiasts.
Apple set to shake up VR landscape with mixed reality headset
Apple is reportedly preparing to launch a VR headset with mixed reality capabilities, which is expected to be a precursor to the highly-anticipated Apple Glass. The headset is expected to be similar to a typical VR headset but will feature external cameras and sensors that enable body tracking and the incorporation of real-world elements in a virtual space. It is also rumored to offer an "optical see-through AR experience," allowing users to see through the headset and experience augmented reality. While the headset is expected to be priced at over $1,000 and potentially several thousand, it is reportedly not intended to be a replacement for real life but rather a device for short trips into VR for communication, content viewing, and gaming.
What does the future hold for VR?
According to CCS Insight, 2023 is expected to be another "slow year" for the VR market. With consumer budgets tightening, non-essential purchases like VR headsets are likely to be put on the back burner. For now, it remains a niche and expensive hobby for many, with no clear path to widespread adoption of affordable VR headsets and successful VR franchises. While some proponents of the metaverse tout the benefits of total immersion, it remains unclear if there is a strong demand or need for this type of technology. Classic video game immersion, achieved through open-ended multiplayer games and single-player experiences, seems to be sufficient for many within the video game culture.
VR technology has the potential to revolutionize a number of industries, though its slow adoption and declining sales and shipments suggest that it’s not ready for mainstream use. Until VR technology becomes more accessible and affordable, it is unlikely to achieve the level of success that companies like Meta have been hoping for.
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