The global market for augmented reality (AR) and virtual reality (VR) headsets is projected to witness a decline of 8.3 percent, reaching 8.1 million units in 2023, IDC said. Despite the introduction of new headsets, economic factors impacting households and reduced commercial spending are cited as key reasons for this downturn in the AR and VR market.
Sony’s PSVR and Meta’s Quest 3 have garnered positive reception; however, broader economic pressures and a slowdown in commercial investments have tempered the overall growth.

Nevertheless, a significant resurgence is anticipated in 2024, with AR/VR headset shipments expected to soar by 46.4 percent, according to the latest analysis by IDC’s Worldwide Quarterly Augmented and Virtual Reality Headset Tracker.

The revival is attributed to the extended availability of Meta’s Quest 3 throughout the year and the introduction of Apple’s Vision Pro, which is anticipated to generate substantial interest despite an estimated shipment of fewer than two hundred thousand units.

Meta, leading the market with a 55.2 percent share in the third quarter of 2023, has already outpaced Apple’s projected volume by more than tenfold in the initial three quarters of the year. Consequently, Meta is poised for continued year-over-year growth in 2024.

Jitesh Ubrani, IDC’s Mobility and Consumer Device Trackers research manager, highlighted, “While the new VR headsets are expected to drive volume, they also risk alienating some consumers as average selling prices trend upwards.”

“The Vision Pro’s higher price point is likely to target businesses, whereas the Quest 3, though more accessible, may stretch consumers’ budgets, catering primarily to affluent buyers, especially as production decreases for older, more affordable headsets.”

In parallel, the outlook for AR headsets in 2024 appears promising due to the availability of cost-effective tethered headsets from companies like Xreal and Rokid. These devices are positioned to replace monitors, enhancing productivity and elevating the media consumption experience.

Additionally, standalone headsets like Microsoft’s HoloLens 2 and the Magic Leap 2 will continue to proliferate in the AR market, albeit at a slower pace than tethered AR headsets. IDC forecasts a substantial uptick in AR headset shipments, reaching 845,000 units in 2024, an 85.6 percent increase compared to 2023.

Ramon T. Llamas, IDC’s Augmented Reality and Virtual Reality program research director, emphasized, “While AR headset volumes may lag behind VR devices, a diverse range of products will cater to a growing array of needs. The focus on 3D immersive and interactive AR will particularly resonate with enterprise users.”

He also noted the burgeoning interest in assisted reality, targeting consumers with gaming and multimedia experiences, and the rising profile of mixed reality, which is anticipated to appeal to users seeking dedicated AR encounters.