Video games, manufacturing, medicine, education: Extended reality or XR, which encompasses virtual reality, mixed reality and augmented reality, has a multitude of use cases, although the market seems to have skewed towards solutions enhancing the existing world rather than diving into purely virtual environments. Two examples of this trend are a generally slow uptake on dedicated VR headsets and, as of now, primarily failed bets on the metaverse.
The price of headsets like the Meta Quest or the Playstation VR 2 is, of course, another factor. With its Vision Pro and its price point of $3,500, Apple is challenging the notion that expensive XR gear is a hard sell compared to smartphones, smartwatches and other consumer electronics already deeply ingrained in everyday life.
Data from our Statista Consumer Insights shows that excitement for VR and AR headsets in many of the biggest economies of the world is still relatively low. In the United Kingdom, Germany and the United States, which rank among the top ten countries with the highest GDP and highest GDP by purchasing power parity, only between 18 and 22 percent of respondents are excited about this type of hardware. On the other side of the spectrum, almost half of all internet users from India surveyed are excited about XR hardware, followed by Brazil (37 percent) and Mexico (33 percent).
When it comes to the actual market size of XR, including hardware, software and advertising, estimates vary considerably. While some sources claim XR revenue stood at $100 billion this past year, the majority of market research institutions place the size of the XR market somewhere between $30 billion and $40 billion for 2023, potentially reaching $100 billion in the next three to five years.
The headset segment, in particular, is dominated by two companies: Meta, which released its Quest 2 in October 2023, and Sony and its Playstation VR 2, which entered the market in February 2023. According to both Counterpoint Research and IDC, the Quest had a market share of roughly 50 percent in Q3 2023, while the Playstation VR 2 hovered at around 30 percent.
