Slower Growth for AR/VR Headset Shipments in 2023 but Strong Growth Forecast Through 2027, According to IDC

NEEDHAM, Mass. – On the heels of a weaker than expected 2022, International Data Corporation (IDC) has lowered its forecast for augmented and virtual reality (AR/VR) headsets in 2023. Global shipments are now expected to reach 10.1 million units this year, according to the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker. Despite the revised outlook, total AR/VR headset shipments are expected to grow 14% in 2023 and accelerate over the 2023-2027 forecast period with a five-year compound annual growth rate (CAGR) of 32.6%.

“The challenging macroeconomic climate is largely to blame for this year’s lowered expectations, although it will not impact all vendors equally,” said Jitesh Ubrani, research manager, Mobility and Consumer Device Trackers at IDC. “Sony’s new PSVR2 and Apple’s foray into the space will help drive additional volume while new devices from Meta and Pico, expected towards the end of 2023, will build momentum for VR in 2024. Meanwhile, on the AR front, consumer-facing brands such as Xiaomi, Oppo, and TCL are all expected to drive consumer awareness for the category over the course of the next 6-18 months.”

Among the various form factors, standalone VR headsets will face challenges in 2023 due their extreme popularity in 2020 and 2021 leading to unfavorable year-over-year comparisons and the dependence on Meta’s product launch schedule. However, tethered VR as well as tethered AR glasses headsets will face a relatively easier path to growth due to the dearth of volumes in 2022.

“Consumer VR usage has dominated the AR/VR market, but growing consumer interest in AR is starting to reshape that segment,” noted Ramon T. Llamas, research director for IDC’s Augmented and Virtual Reality research team. “Historically, commercial users have led the AR segment with training and field service applications. But with the advent of lighter form factors, brighter displays, crisp sound, and a growing list of titles, early adopters have swung the pendulum in the other direction. Combined with the widespread popularity of gaming for VR headsets, consumer usage will lead both segments even as the case for commercial usage grows.”