Virtual Reality Headset Market Size, Share & Trends Analysis Report By End-device (Low-end, High-end), By Product Type (Standalone, Smartphone-enabled), By Application (Gaming, Education), And Segments Forecasts, 2021 - 2028

Report Overview

The global virtual reality headset market size was valued at USD 7.81 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 28.2% from 2021 to 2028. The extensive application of virtual reality (VR) technology in the military and automotive sectors is driving market growth. Moreover, the surge in demand for gaming consoles is another factor propelling the growth of the industry. VR technology has a vast potential to be used in a broad range of applications, such as medical training, industrial prototyping, and education. The rising investments in this technology by enterprises as well as consumers are expected to boost the product demand over the forecast period. The emerging trends in VR technology have an immediate impact on the developments in the VR headset industry, such as the introduction of convenient, attractive, and sleek VR headsets.

In addition, the incorporation of Artificial Intelligence (AI) and machine learning into VR is likely to fuel the product demand. The key players in the industry are continually investing in R&D for the development of state-of-the-art devices. Furthermore, in the wake of Covid-19, corporates have shifted to online platforms to continue their business processes. The increased deployment of VR technology in virtual events, which allows businesses to reach their potential customers in their comfort zones by offering a real-like experience of their products and services, is further driving the growth of the market.

The growing product adoption in the gaming and entertainment industries is boosting the demand for VR Head-Mounted Devices (HMDs). Companies are continuously introducing innovative devices to offer immersive entertainment experiences and an unparalleled level of pragmatism within VR games. The main participants in the industry are taking over gaming companies to enhance their product offerings and gain a competitive edge. For instance, in February 2020, Facebook LLC acquired Sanzaru, Inc., a U.S.-based video game development company, to explore the technological benefits for Oculus Studios to develop rich, VR-based content.

The growing trend of the VR domain becoming increasingly social and collaborative, along with the rapid penetration of smartphones, is anticipated to offer various growth opportunities to the market. The benefits offered by VR devices, such as the creation of a realistic world, immersive experience, profound visualization, and accessibility to experience different sites, are boosting the growth of the market. These devices witnessed high demand from various industrial sectors, especially for teaching and learning activities, during the Covid-19 pandemic. For instance, the U.K. government, with the help of VR headsets, trained its trauma medical professionals for the medical procedure. Likewise, the National Aeronautics and Space Administration (NASA) deployed VR technology to provide a Virtual Space Station (VSS), a suite of interactive computer-delivered treatment programs, and interactive behavioral health training.

VR technology has an immense impact on the retail industry owing to the shifting shopping preferences of customers. The technology allows consumers to shop anything from anywhere while offering them an in-store virtual experience. The ability of VR and Augmented Reality (AR) to allow shoppers to try on things virtually has promised the VR headset industry a new growth prospect. The technology fulfills significant needs of the buyers, such as detailed product information and retail-accessibility, along with convenience and fast digital shopping experience. In 2019, Walmart, a global retail company, declared that it would be using 17,000 of Facebook Inc.’s Oculus Go headsets to train its staff in skills extending from customer service to compliance. The staff learned to use the innovative & automated Pickup Tower vending units in simulated settings before they were installed in retail stores. Furthermore, technological expansions and improvements in networking & connectivity are anticipated to boost the product demand over the forecast period.

End-device Insights

The high-end device segment accounted for the largest revenue share of more than 58% in 2020 and is expected to retain its dominance over the forecast period. The advanced features of these devices, including high-quality visual effects, self-tracking, and elevated performance, are expected to drive the segment growth. High-end devices are majorly used in big corporates to provide better-quality service to their customers and employees. These devices are majorly enclosed with the latest & advanced technologies that offer improved involvement and high resolution to the viewers. Heavy and continuous investments in high-end devices by prominent players, such as Sony Corp.; Facebook, Inc.; Samsung; and Google LLC, are likely to augment their demand over the forecast years.

The low-end device segment is anticipated to exhibit the highest CAGR of around 35.0% from 2021 to 2028. This growth can be attributed to the benefits of these devices, such as lower costs, considerable immersive experience, and high propulsion. The low-end devices are affordable and accessible to common people who are only interested in experiencing the basic VR technology. The medium-range device segment is projected to observe substantial growth in the coming years due to the ongoing developments, which will drive their demand, especially from small corporate organizations.

Product Type Insights

The standalone product type segment accounted for the largest revenue share of over 43% in 2020 and is anticipated to retain its dominance from 2021 to 2028. A standalone device offers a high-quality experience at an affordable price. Its fundamental feature, the integration of various mechanisms, including processing control and hardware, is driving the segment growth. The key players are offering various application-oriented devices with different features and price ranges. For instance, in December 2019, Facebook, Inc. introduced a hand-tracking feature in Oculus Quest VR standalone headset.

The smartphone-enabled product type segment is expected to exhibit the second-fastest CAGR of over 30.7% during the forecast period. The segment growth can be attributed to the rising penetration of advanced VR-enabled smartphones with the amalgamation of 3D technology and AI. The standalone PC-connected product type segment is expected to witness a sluggish demand from 2021 to 2028. The positioning of standalone PC-connected products in the gaming sector is expected to uphold the segment progress owing to its ability to offer a high-quality immersive experience. The key participants in the industry are continually investing in innovations and developments to offer gamers the finest immersive experience.

Application Insights

The gaming segment accounted for the largest revenue share of over 30.0% in 2020 and is anticipated to dominate the global VR headset market over the forecast period. Gamers have an elevated average price outlay for transforming their gaming consoles or desktops compared to people who do not indulge in gaming. This has encouraged the firms to capitalize on the VR headset games within the reasonable price range for gamers. Furthermore, the retail segment is also expected to observe substantial growth as retailers are integrating these devices into their stores to improve the buying experience. The new online shopping trends adopted by the retail and e-commerce businesses, which include providing their potential customers with real-life experiences in shopping to help them make a better purchase decision, are fueling the segment growth.

The education segment is anticipated to register the fastest CAGR from 2021 to 2028. This can be attributed to the increased product deployment in educational institutions and medical schools. Moreover, the advancements in the healthcare sector due to VR technology, along with favorable government regulations for facility enrichment, are promoting the segment growth. The augmented use of these devices for providing training to medical students and assisting medics and surgeons in patient treatment, robotic surgeries, mental health & psychological therapies, and pain management & physical therapies is further driving the healthcare segment growth. The key players in the healthcare sector are largely investing in VR devices owing to their benefits. For instance, GlaxoSmithKline used VR technology in its “The Migraine Experience” marketing campaign, wherein migraine patients selected the symptoms of their migraine and later passed over the VR headset to the partner, who was a non-migraine sufferer, to experience migraine firsthand.

Regional Insights

The Asia Pacific region accounted for the highest market share of around over 40% in 2020 owing to the increased digitalization and VR technology developments, particularly in the gaming and entertainment sector. Within the regional market, China captured the largest revenue share. This can be attributed to the advent of 5G and policy support for VR progress from the government of China. The major companies in the region are widely utilizing VR technology for several purposes, thus contributing to the regional market growth. For instance, in January 2020, Virtuleap, a VR-based brain training firm, along with HTC Corporation, launched the Enhance VR brain training application in China to offer mini-games designed primarily to train and assess different skills, such as problem-solving, speed, spatial orientation, motor skills, memory, flexibility, and spatial audio awareness.

North America accounted for a significant revenue share in 2020 owing to the high adoption of VR technology in the region due to high disposable income levels and declining prices of headsets with processors and screens. The U.S. is the major contributor to the regional market growth owing to the presence of major tech companies, such as Google LLC, Microsoft, and Facebook LLC, and their large-scale investments in VR technology. Europe is expected to witness considerable developments in the market due to the substantial integration of smart devices, such as the deployment of VR headsets in various industries, including defense, entertainment, and education, to improve and develop visual experience. The increasing adoption of VR technology in gaming arcades, cafes, amusement parks, and exhibitions is positively impacting the regional market growth.

Key Companies & Market Share Insights

Leading companies are constantly investing in R&D for the development of cost-effective devices that offer high quality and can be utilized by various end-use industries. Oculus Rift, Oculus Rift S, Oculus Quest, Oculus Go, HTC Vive, HTC Vive Pro Eye, HTC Focus, HTC Plus, HTC Cosmos, and Sony’s PSVR are some of the VR headsets that are prominent among several industry sectors. The significant expansion of the market is expected to be supported by gaming consoles from Nintendo, SEGA, and Atari, Inc., among others. Unceasing investments in the research & development of VR technology by industry participants are expected to boost the market growth over the forecast period.

The high revenues from the gaming sector guided the VR device manufacturers to capitalize on the VR headset segment by offering related software, hardware, and content services. Many businesses have been adopting several innovative technologies, such as Blu-ray, 4K, motion sensing, self-tracking, HD quality video, and Six Degrees of Freedom (6DoF), to cater to the changing customer demands. Moreover, M&A and partnerships with domestic firms are among the foremost stratagems implemented by the global industry players. For instance, in May 2020, HP Development Company, L.P., a technology firm, unveiled the new Reverb G2 VR headset, built in partnership with Microsoft Corporation and Valve. Some prominent players in the global VR headset market include:

• Carl Zeiss AG

• Facebook Technologies, LLC (Oculus)

• Google LLC

• HTC Corporation

• LG Electronics

• Microsoft

• Razer Inc.

• Samsung Electronics Co., Ltd.

• Sony Corporation

Virtual Reality Headset Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global virtual reality headset market report on the basis of end-device, product type, application, and region:

• End-device Outlook (Revenue, USD Billion, 2016 - 2028)

  • Low-end Device

  • Mid-range Device

  • High-end Device

• Product Type Outlook (Revenue, USD Billion, 2016 - 2028)

  • Standalone

  • Smartphone-enabled

  • Standalone PC-connected

• Application Outlook (Revenue, USD Billion, 2016 - 2028)

  • Gaming

  • Healthcare

  • Media & Entertainment

  • Manufacturing

  • Retail

  • Education

  • Telecommunications

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2028)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East & Africa