Virtual Reality revenues to surpass $56bn by 2026

Consumer interest in Virtual Reality grew significantly, while the bubble created around location-based VR—once a significant portion of the total VR market—is now bursting. 2020 both accelerated and severely hampered the Virtual Reality (VR) market, and those impacts continue in 2021. Interest is slowly returning for public usage in arcades and other experiences, while home use remains a stable growth area, especially in VR gaming.

According to ABI Research, steady growth in both enterprise and consumer VR segments over the next five years will lead to 50.1 million VR Head-Mounted Display (HMD) shipments (a 42% CAGR) and generate more than $56 billion in total VR market revenues by 2026.

Virtual Reality has had many ups and downs. VR gaming is driving the consumer VR market today, with a steadily increasing number of developers releasing VR content. Enterprise VR saw increased interest with the Covid pandemic and the need for remote worker enablement, and that interest will continue and grow post-pandemic. In terms of hardware, the standalone HMD segment continues to fuel the VR market, with strong interest from both the consumer and enterprise markets.

Standalone will make up nearly 80% of total shipments in 2026, up from 44% in 2021. Secondly, enterprise-focused VR companies are shifting a significant amount of attention to standalone VR and many view it as the future of the industry. For software and content, consumer VR remains mostly focused on gaming. Education mixes consumer and enterprise and is the second largest segment by shipments and first by revenue. Remote worker enablement and high-quality visualization drive enterprise interest across the other verticals, including healthcare, retail, manufacturing, and others.