IDC: Apple, Sony Will Challenge Meta’s VR Dominance in 2023


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Even though Virtual Reality (VR) has been around for awhile now, it’s never completely caught on with gamers. Reasons for this vary, but one contributing factor is there’s not many modern, updated headsets to choose from. Today, there’s really only one affordable option in town; the Meta Quest 2 headset. It controls the vast majority of the VR market due to its affordable price and great performance. That’s about to change though, according to a new report from IDC. Apple is widely reported to be entering the market soon with a mixed reality device. Sony has also announced its second generation VR hardware for the Playstation 5. This means Meta is about to get some serious competition for the first time. Given the investments by Apple and Sony, it could radically alter the VR landscape.

IDC’s latest report shows that Meta currently controls 90 percent of the VR market. That’s all thanks to its Quest 2 headset. The company with the second-highest global market share is a Chinese company named Pico. It’s actually owned by TikTok parent company ByteDance. Though it mainly operates in China, it’s still penetrated various global commercial markets. Despite that limitation, it holds a 4.5 percent market share. The remaining companies each hold less than a four percent share. They include DPVR, HTC, and iQIYI. We’ve never heard of DPVR and iQIYI either. These are global stats mind you, not just for the US.

IDC predicts Meta’s Project Cambria and Apple’s headset will cause a sharp rise in VR headset prices into next year. (Image: IDC)

As you can see, Meta has no serious challengers to its VR dominance. However, IDC doesn’t think subsidizing the hardware is a viable long-term strategy. “Meta continues to pour dollars into developing the metaverse but the strategy of promoting low-cost hardware at the expense of profitability isn’t sustainable in the long run,” said Jitesh Ubrani, a research manager for IDC. As we’ve reported previously, Meta’s Reality Labs VR division is a money pit. The company has poured billions of dollars into it in the previous years. At the same time, Meta does plan to earn billions from the metaverse, eventually. Zuckerberg recently stated he expects it to be a thriving marketplace in 2030.

The solution to Meta’s revenue woes is Project Cambria. It’s the company’s first high-end headset, and it will be launching in 2022. No pricing is available yet, but it will likely be at least twice as expensive as the $400 Quest 2. IDC believes it will begin to shift the entire market away from affordable headsets to more expensive offerings. Ubrani stated, “The good news is that the upcoming productivity-oriented headset from Meta will serve as the starting point for the company’s pivot towards higher revenue generating hardware and will also help provide an uplift in end-user pricing for the entire industry as average selling prices creep up and the tech substantially improves.”

The fact that Meta is launching Cambria right when Apple is expected to enter the market sets up an epic clash between the two rivals. Apple’s device will be expensive, and also not metaverse-friendly. It will also not ship in high volume due to its price. Instead, it will be a “toe in the water” for early adopters and diehard Apple fans. At the same time, Sony is expected to begin selling its PSVR2 hardware this year. It announced the radically upgraded hardware awhile ago, but it still hasn’t launched. Also, in the US, Sony ranks second in market share to Meta, so it’s a formidable competitor.

Next year is predicted to be a crucial time for the industry. Both because of the titans clashing, and because of the arrival of next-gen hardware. IDC expects VR shipments to increase by 26 percent for 2022, and that rate will only increase next year. Which company will come out on top when the dust settles is anyone’s guess. However, Meta has every advantage at its disposal right now.

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