Virtual Reality Headset Market

The global Virtual Reality Headset Market was valued at USD 4.1 Billion in 2022 and is projected to reach a value of USD 5.88 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 5.3% between 2023 and 2030.

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A Virtual Reality Headset, or a VR headset, is a hardware device that gives a virtual reality experience for three-dimensional simulations, pc games, and other applications like movies, play stations, and others. VR headsets use an organic light-emitting diode or liquid crystal display screen and a head motion monitoring sensor to produce realistic-looking 3D images. The sensor in the VR headset tracks head movement and produces 3D pictures with up to a 360-degree field of view. The global Virtual Reality Headset market is expected to expand during the forecast period at a significant CAGR. The extensive application of virtual reality technology in retail and manufacturing drives the market growth. Moreover, the growing demand for gaming consoles drives the industry's growth. Virtual reality technology has a vast potential to be used in various applications, such as medical training, industrial prototyping, and education.

Consumer and enterprise expenditures in this technology are projected to drive product demand over the projection period. Growing trends directly influence the advances in the Virtual Reality Headset market in virtual reality technology. In addition, incorporating machine learning and Artificial Intelligence (AI) into virtual reality is expected to boost product demand. The main companies in the market continually invest in R&D to create state-of-the-art devices. Also, during the Covid-19 outbreak, several businesses switched to online platforms to sustain operations.

The increasing use of virtual reality technology in virtual events, which allows enterprises to contact their target clients in their comfort zones by providing a life-like experience of their products and services, is driving market expansion. Product adoption in the entertainment and gaming industries is increasing demand for VR-enabled Head-Mounted Devices (HMDs). Businesses are continually developing new technologies to provide unparalleled immersive experiences in VR entertainment. For example, Facebook Technologies, LLC (Oculus) debuted the XTADIUM application in its Meta Quest in November 2022, providing an immersive sports experience in 180-degree VR footage of up to 8K quality.

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Economic Insights

The Center for Economics and Business Research (CEBR) and several other organizations believe that there will be a brief slowdown in the growth of the Indian economy in the near future. Some economies have shrunk due to various circumstances, such as decreased borrowing costs made in response to inflation. According to projections made in the British consultancy's annual Global Economic League Table, the size of the global economy is expected to reach one hundred trillion dollars in the year 2022. Since Russia invaded Ukraine, there has been an increase in the number of geopolitical risks. In the opinion of several investors, market players, and other authorities, the conflict would pull down the economy of the entire world and cause inflation. These factors are predicted to increase uncertainty and put individuals in potentially dangerous situations. Already, the sophisticated economies of a few countries have begun to take shape.

Top Market Trends

1. Rapid Penetration of Smartphones: The expanding tendency of the virtual reality domain to become more social and collaborative, combined with the high adoption of smartphones, is expected to provide the industry with various growth prospects. The advantages provided by VR devices, such as the development of a realistic world, immersive experience, profound visualization, and the ability to encounter multiple environments, are driving market expansion. During the Covid-19 epidemic, these gadgets were in significant demand from various industrial sectors, particularly for teaching and learning activities. For example, the United Kingdom government used VR headsets to train trauma medical professionals for surgery. Similarly, NASA used VR technology to produce a Virtual Space Station (VSS), interactive computer-delivered therapy programs, and interactive behavioral health training.

2. Rising Practical Applications: The practical usage of virtual reality technology is assisting users in achieving effective results, which is likely to fuel market expansion throughout the course of the research period in sectors like healthcare, real estate, education, automotive, and retail, among others. Important players in the automotive sector, including Jaguar Land Rover (JLR) and BMW, have been utilizing virtual reality and its applications for a long time. These businesses employ technology to advance and enhance early engineering and design assessments to evaluate their cars' object obscuration and visual design.

3. Increasing Penetration Among the Younger Population: The market for Virtual Reality Headset is expanding due to rising smartphone acceptance, increased demand for effective and high-quality images, and increased public technology literacy. In addition, the younger generation's growing popularity in established and developing nations has also propelled the market's expansion. However, the market expansion is being hampered by the high cost of the headsets and variances in the quality of the visual effects. Also, during the anticipated period, an expansion in the implementation scope in the automotive and armed services industries is predicted to present profitable opportunities for the growth of the Virtual Reality Headset market.

Market Segmentation

The global Virtual Reality Headset market can be categorized on the following: End Use, Product Type, Application, and Region. Based on End Use, the market can be categorized into Low-End Devices, Mid-Range Devices, and High-End Devices. Additionally, based on the Product Type, the market can be segmented across Standalone, Smartphone-Enabled, and Standalone Pc-Connected. Furthermore, based on Application, the market can be split into Gaming, Healthcare, Media & Entertainment, Manufacturing, Retail, Education, Telecommunications, and Other Applications. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on End Use

High-End Device to Dominate Largest Market Share Owing to Higher Visual Quality

The global Virtual Reality Headset market is expected to be dominated by the segment of high-end devices during the forecast period. These gadgets' sophisticated features, such as high-quality visual effects, self-tracking, and enhanced performance, will likely boost segment expansion. Large organizations mostly employ high-end gadgets to better service their consumers and staff. These devices are primarily equipped with cutting-edge technology, providing viewers with enhanced participation and excellent resolution. Ongoing investments in high-end devices by major firms like HP Inc., Facebook Technologies, LLC (Oculus), and Google LLC are expected to boost demand in the next years. The low-end devices market is expected to grow with the fastest growing CAGR during the forecast period owing to the advantages of these gadgets, such as decreased costs and a more immersive experience. Low-cost devices are economical and accessible to the general public interested in experiencing basic VR technology.

Based on Product Type

Standalone Devices to Account for Maximum Revenue Owing to Lower Costs

The standalone devices segment is expected to dominate the largest market share during the forecast period. A standalone gadget provides a high-quality experience at a low cost. It is key to incorporating diverse processes, such as processing control and hardware, into a single system. The segment's growth is driven by the leading companies offering numerous application-oriented devices with varying features and pricing ranges. The smartphone enables devices are expected to grow with the fastest-growing CAGR during the forecast period. The increased adoption of powerful VR-enabled smartphones that combine 3D technology and AI can be credited to the segment's rise. Furthermore, the ease of use and widespread availability of these Virtual Reality Headset for smartphone users will likely boost category growth throughout the forecast period.

Based on Application

Gaming to Lead Largest Market Share Owing to Integration of Advanced Technologies

The gaming segment will dominate the global Virtual Reality Headset market during the forecast period. Furthermore, gaming VR headsets are outfitted with cutting-edge technologies that capture eye movements and send them to the game for a more immersive experience. This is expected to drive segment growth during the forecast period. Compared to non-gamers, gamers have a higher average cost outlay for converting their gaming consoles or desktops. This has spurred companies to capitalize on VR headset games at a fair price for gamers. The education segment will grow with the fastest-growing CAGR during the forecast period. This is because product deployment has expanded in educational institutions and medical colleges. Furthermore, developments in the healthcare sector due to virtual reality technology and favorable government laws for facility enrichment are driving segment expansion.

Based on Region

Asia Pacific to Occupy Largest Market Share Owing to Rising Digitization and Increasing Investments in the Gaming Sector

The global Virtual Reality Headset market is expected to be dominated by the region of Asia Pacific during the forecast period. Regional growth will be fueled by rising digitalization and virtual reality technology breakthroughs, particularly in gaming and entertainment. China got the greatest revenue share in the regional market. This is due to the arrival of 5G and the Chinese government's policy backing for virtual reality advancement. The region's leading corporations widely adopt virtual reality technology for various applications, contributing to regional market growth. For example, in November 2022, China revealed its virtual reality plan, under which the area plans to export over 25 million gadgets worth more than USD 45 million by the end of 2026. Japan launched commercial 5G services in 2019, prompting telecom firms to employ strategic inventiveness to provide Augmented Reality (AR)/virtual reality viewing platforms that leverage 5G connectivity. Good measures by the government and other connected entities, such as funds and investments to assist VR businesses, are also increasing the region's adoption of VR technology.

North America will grow with the fastest-growing CAGR during the forecast period. Thanks to the region's significant adoption of VR technology due to high discretionary income levels and falling prices of headgear with screens and CPUs, extremely significant regional growth is expected. Because of significant players such as Microsoft Corporation, Google LLC, and Facebook Technologies, LLC (Oculus), as well as their large-scale expenditures in VR technology, the United States is a major contributor to regional market growth.

Competitive Landscape

Leading firms are continually investing in R&D to build low-cost devices that provide a high-quality experience and can be used by various end-use sectors. Some of the most popular VR headsets are the Meta Quest Pro, Meta Quest 2, HTC VIVE XR Elite, HTC VIVE Flow, and HTC VIVE Pro 2 Headset. Gaming consoles like Nintendo, SEGA, and Atari, Inc., among others, are projected to support the market's strong growth. Ongoing expenditures in virtual reality technology research and development by industry participants will likely drive market expansion throughout the forecast period.

The key players in the global Virtual Reality Headset market include - Carl Zeiss AG (Germany), Facebook Technologies LLC (U.S.), Google LLC (U.S.), HTC Corporation (Taiwan), LG Electronics Inc. (South Korea), Microsoft Corporation (U.S.), Razer Inc. (U.S.), FOVE Inc. (Japan), Valve Corporation (U.S.), HP Inc. (U.S.) among others.

Recent Market Developments

· January 2023: Facebook Technologies, LLC (Oculus) has expanded their cooperation as the NBA and WNBA's official Virtual Reality Headset partner. This collaboration is expected to provide a professional basketball experience in virtual reality.

· January 2022: Microsoft Corp. announced the acquisition of Activision Blizzard Inc., a game developer and interactive entertainment content publisher based in the United States, for USD 68.7 billion. Similarly, HW Holdco, LLC, a housing market solution provider based in the United States, announced the acquisition of Alpha Vision. The target company is a technology company based in Canada that provides interactive floor plans, digital site maps, 3D and virtual reality home renderings, and sales interaction tools to the home building and real estate industries.

Segmentation of the Global Virtual Reality Headset Market