"Strong demand" actually means demand from retailers, but not necessarily consumers
I keep seeing this report from analyst firm Canalys in the tech press (infographic above) as evidence that we're seeing a huge surge of interest in virtual reality headsets, or at the very least, that VR headset sales are slowly rising out of the doldrums:
Virtual reality headset shipments are showing no signs of slowing, as the quarterly total exceeded 1 million units for the first time in Q3 2017. Sony took the lead, shipping more than 490,000 PlayStation VR (PS VR) sets in Q3. It was followed by Oculus, which shipped 210,000 of its Rift headsets. HTC took third place, shipping 160,000 Vive VR units. Collectively, Sony, Oculus and HTC made up 86% of the total market in Q3 2017.
Little noticed, however, is the Canalys report's fixation on the verb "ship" to the exclusion of "sales", which aren't mentioned. There's a good reason for that. Shipments are not necessarily the same as sales:
WHAT DOES “SHIPPED” MEAN?
... These “revenue recognized” products are sold to a distributor, typically for a phone that’s an operator. These sales satisfy the requirements for financial reporting as revenues booked. But they are not in the hands of users. Nor are they “activated” and they don’t generate page views that are measured by web analytics companies. Most analysts and companies now use the phrase “Shipped” to describe these revenue-recognized units though it’s also common to hear “sold”.
Emphasis mine, because it's boggling how often this subtlety is missed. The Canalys report seems to be indicating a small growth in VR headset purchases by retailers who are anticipating increased interest in these devices by consumers. However, that doesn't necessarily mean all or even most of these 1 million units are already in consumers' hands. We probably won't have clarity on actual sales until next quarter or even next year.
Even more key? Neither shipments or sales necessarily mean usage -- whether consumers are actually consuming content on their VR headsets on a regular basis, or giving up on them after a few tries and letting them gather dust on the shelves. And we do have some indication on current usage -- VRLFG.net is one place to go, since it pulls data from Steam's API to track people playing VR-compatible games and software on Oculus or Vive. And here's how many people are doing that right now:
Yes: Despite nearly 400,000 new "shipments" of Oculus and Vive headsets in Q3 2017, Steam is still tracking total Oculus and Vive concurrent usage in the three figures. (Usage actually seemed to be higher if still small last Summer.) I suspect Sony's VR device isn't fairing much more usage. I understand the desire for a comeback story, but so far, there's not enough evidence to say consumer VR is experiencing one this year.