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VR to Make $895 Million in Revenue By End of 2016, Analyst Predicts

The launch of major PC-based virtual reality (VR) head-mounted displays (HMDs) may have been stalled by shipping woes, but that won’t stop the eventual mass rollout of the Oculus Rift and HTC Vive. Later on in the year these two anticipated kits will also be joined by the PlayStation VR HMD for PlayStation 4, which will be launching in October 2016. Add these to the already available Gear VR and many Google Cardboard-branded HMDs, and analytics company Strategy Analytics believes that the VR industry will make $895 million USD in revenue this year.

Oculus Rift consumer version

The company announced its prediction this week, noting that 77% of that revenue would be coming from this year’s releases rather than the mobile-based kits that have come before. That said, Oculus Rift, HTC Vive and PlayStation VR are said to only take up 13% – or 1.7 million – of a market that the company estimates will total 12.8 million units this year. The company sees mobile VR as a sort of ‘gateway drug’ into these bigger experiences.

“Consumers will soon be exposed to an incredible diversity of virtual reality options ranging from ultra-low cost to super premium. While we expect smartphone-based viewers to take the lion’s share of VR headset volumes in 2016 at 87% of shipments, PC and Game Console powered headsets will absolutely dominate value share commanding 77% of revenues.” said Cliff Raskind, Director of Strategy Analytics’ Wearable Device Ecosystems service, “Additionally, we believe VR has the potential to fuel a new tech spec race in hardware areas such as display resolution, GPUs, storage and 360° cameras.”

For the latest updates on the VR industry, check back with VRFocus.