VR Hardware to Be Worth Over $50Bn by 2021

A new Juniper Research study has found that hardware revenues from VR (Virtual Reality) headsets, peripherals and 360º cameras will reach over $50 billion by 2021, up tenfold from an estimated $5 billion in sales this year. This rapid growth will arise from a widespread adoption of VR by smartphone users, and the high unit prices commanded by headsets for PCs and consoles.

The market will be triggered by the launch of PlayStation VR this October, and Microsoft’s Project Scorpio in 2017 - offering compatibility with the Oculus Rift. Consoles strike a balance between computing power and cost, providing high-end specs without many of the additional costs unlike PC VR, and offer a better quality experience than smartphone VR.

The new research, Virtual Reality Markets: Hardware, Content & Accessories 2016-2021, projects a low revenue curve for mobile VR with the cost for ‘holder’ headsets (the enablers of smartphone VR), remaining low. More advanced platforms however, like the Google Daydream, are projected to produce more moderate revenues in the short term. On the plus side, low cost headsets will allow consumers to ‘dip’ into VR, but potentially abandon it if the experience is poor. This could be problematic for smartphone VR software developers, who will be relying on in-app purchases for revenue.

Console and PC based VR units can more easily provide high quality experiences, justifying a premium price and upfront software revenue. However, the shape of the early market may already have had an impact on PC-based VR content.