Global virtual reality (VR) headset shipments fell 4 percent in the April-June quarter (Q2), primarily due to a sharp drop in Sony’s PlayStation VR2 shipments, a report said on Friday.

The decline was also due to overall weakness in the consumer VR segment due to a lack of application innovations and a sluggish economy, according to Counterpoint’s Global XR (AR/VR) Headset Model Tracker.

In contrast, demand from the enterprise VR segment remained relatively stable in Q2.

Senior analyst Flora Tang said that despite technological advancements in newly-launched products from major players, the global VR headset market remains sluggish compared to its peak in 2021 and 2022, “when Meta’s Quest 2 series successfully attracted users with innovative gaming, entertainment and Metaverse experiences during the pandemic.”

Social media giant Meta was the undisputed market leader in Q2 with a 37 percent YoY growth capturing 80 percent share. Meta’s Quest 3 alone accounted for over 70 percent of the market.

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Apple’s Vision Pro shipments saw a sequential decline in Q2, particularly after accounting for returned units from the US market.

“Following the initial market hype, consumers appear to be waiting for more content and application options to justify the high price of Apple’s MR headset,” said the report.

Among the top five market players, Sony and Apple faced challenges in Q2, both experiencing negative growth.

Sony saw a decline of over 90 percent in Q2 2024 compared to the same period last year, when the PSVR 2 model had just entered its second quarter after launch.

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Market contribution from smaller companies shrank in Q2 2024.

Companies like Play for Dream Technology (YVRDream) and NOLO showcased their new VR headsets in the first half of 2024, but none of these have been commercialized yet, said the report.

Many consumers are holding off on purchases, waiting for new content and applications that can justify the cost.

Consequently, companies like Meta and Apple are now prioritizing the development of more affordable and lightweight products for future releases, rather than focusing on powerful but ultra-premium headsets, said Tang.