Analyst pegs 2016 VR headset revenues at $895m

Total sales of virtual reality headsets will reach $895m by the end of 2016, according to market research firm Strategy Analytics.

The prediction is somewhat lower than other recent estimates. SuperData last month estimated that the entire VR sector, including hardware and software, will reach $3.6bn this year – and that was a 30 per cent reduction on its $5.1bn forecast from January.

Strategy Analytics last year predicted that by the end of 2017 a total of 70m headsets will have been sold, which along with software sales represents total life-to-date sector revenues of $8.8bn.

VentureBeat reports that of its 2016 forecast, it says Oculus Rift, HTC Vive and PlayStation VR hardware will between them account for 77 per cent of market revenues. It estimates headset sales of 1.7m units by the end of the year – a number it says is lower than many expected due to the high prices of the devices.

This number should grow significantly in 2017, it says, as lower-cost options such as Google Cardboard and other smartphone-based solutions offer gateways into high-price VR options.

Consumers will soon be exposed to an incredible diversity of virtual reality options ranging from ultra-low cost to super premium,” Strategy Analytics’ director of wearable device ecosystems Cliff Raskind said.

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.

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.”