VR headsets will generate $895 million in revenue in 2016, says study

According to market research group Strategy Analytics, the burgeoning virtual reality industry is expected to make $895 million in revenue over the course of 2016.

The study indicates 77 percent of this increase is set to be accounted for by high-end headsets like the Oculus Rift, HTC Vive and Sony’s upcoming PlayStation VR. However, the study also notes these high-end devices will only account for 13 percent of all sales in terms of volume for 2016, with lower priced smartphone-connected headsets grabbing a 12.8 million unit market share.

The research company says it views 2016 as an integral year for virtual reality when it comes to lower-end devices like the Gear VR, Google Cardboard and LG’s 360 VR.

The Oculus Rift launched on March 28 at $914, the Vive released at a price point of $1,149 last week and Sony’s PlayStation VR is set to drop before the end of 2016. On the low-end, Google Cardboard headsets cost an average of $16 and Samsung’s Gear VR, which launched last November, is priced at $139.

Because of their high price tags, high-end VR headsets will reportedly only ship 1.7 million units in 2016, according to the study. It’s worth noting, the study predicts low-cost VR headsets will work as a “gateway drug” to encourage users to invest in high quality virtual reality 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 percent of shipments, PC and Game Console powered headsets will absolutely dominate value share commanding 77 percent of revenues,” said Cliff Raskind, director of Strategy Analytics’ wearable device ecosystems service, in a statement to MobileSyrup. “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-degree cameras.”

Related reading: Why Samsung’s Gear VR is important to the future of virtual reality

[source]Strategy Analytics[/source]