Analyst Forecasts 83M VR Headset Owners by 2018 - A Forecast on the High Side (But Also Not High Enough) UPDATE: Philip Rosedale, Palmer Luckey Comment

UK virtual world/reality analyst KZero has a new report forecasting market growth of virtual reality, and here's the key infographic:

KZero's summation: "By 2018 we estimate total HMD unit sales of almost 39m globally. This equates to a cumulative total of 83m HMD unit sales over the five year period." In other words, 83 million head mounted display units, the core platform for virtual reality. Not having read the full report, I'm skeptical about the methodology used to forecast this number, which seems too high -- but also, not high enough:

In the near term, the main market for HMD units is going to be hardcore gamers, and if we define them as owners of the latest Xbox or Playstation and PC gamers on Steam, that's probably 100-150 million total. (Assuming a lot of overlap.) So if 30% were to buy Oculus Rift or another HMD by 2018 (and that's a very generous guess), we're talking 30-45 million units sold. But even assuming the KZero forecast is accurate, 83 million is not quite the mass market we need for VR to truly be big. (As it happens, 83m is about the install base of the PS3.) Seen that way, virtual reality won't reach the hundreds of millions needed for VR to go beyond being a hardcore gamer peripheral for perhaps another decade. (Which is fine, we're in this for the long haul, but we need to be realistic about how long it'll take to get truly massive.)

UPDATE, 11:30pm: In comments to this post, Second Life and High Fidelity founder Philip Rosedale offers this forecast of VR adoption:

The adoption period for a widely-desired inexpensive technology (like smartphones) to reach saturation (1 billion+) seems to now be at about 7 years. So the ramp will be between now and about 2021.

Very interesting point, though it remains to be seen if VR HMDs can become as widely desired as smartphones. Also, Oculus founder Palmer Luckey commented to, well, correct my estimate of Playstation 4's install base (I actually meant to write "PS3", which is currently 80 million+, and have since corrected.)

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Comments

[Palmer Luckey]

"83m is about the install base of the PS4"

Might want to double check your numbers on that one.

[Hamlet Au]

Good catch, Palmer, I meant to write PS3 -- I corrected it. Thanks!

http://en.wikipedia.org/wiki/PlayStation_3

[Amanda Dallin]

Robert Geraci in his book Apocalyptic AI quotes a Gartner Group in 2007 projecting that "...80 percent of active internet users will participate in virtual worlds by 2012."

I suspect this projection is equally as accurate.

[Philip Rosedale]

The adoption period for a widely-desired inexpensive technology (like smartphones) to reach saturation (1B+) seems to now be at about 7 years. So the ramp will be between now and about 2021.

[Arcadia Codesmith]

In 1939-1941, about 7000 television sets were sold in the U.S. In 1959, twenty years after they hit the market, cumulative sales were 67 million. Eighty years in, they're almost universal.

With due respect to the experts, I don't think 85 million (or even 30 million) in a five-year span is anything less than a fantastic beginning, nor do I see the potential market saturation for VR as any less ubiquitous than TV itself.

But like any other entertainment medium, the commodity is content, not hardware. If you produce content that people MUST experience, it will drive the market for the gear. If the content isn't there, or if it is targeted to a narrow niche, meh, not so much.

[A.J.]

I don't have invested interest in virtual reality, so my comments should be met with the highest skepticism.

I keep reading this virtual reality recipe and there seems to be less than one teaspoon of reality in it. The rest is just self-absorbed fat.

This a headless technology. Nobody is going to want to be around you when you use it. You can't pop it on while driving, sitting in a waiting room, or quickly check it while enjoying dinner with a friend. You can't invite friends over for pizza and to watch you use it, unless you don't want friends. It doesn't free you. It takes prisoners.

So dreaming this technology is like smartphones or television isn't just fat, it's tallow.

For entertainment purposes, it might be like a Playstation for the one. But for everyone not using it, it's going to be more like a vibrator than a smartphone.

[Arcadia Codesmith]

Global sales of vibrators and other sex toys surpassed 400 million units in 2012.

A gadget doesn't need to be public to be very popular indeed... especially if it has the potential to help keep you out of waiting rooms and traffic and visit with friends from around the globe. And let's face it... some mobilists are so zombified to their tiny screens that they might as well have their face in a headmount. At least it'd be better for their posture.

[Pussycat Catnap]

Smartphones became ubiquitous when they got easy to use and un-intrusive.

I just do not see how you will convince 83 million to sit there with their heads in a box, shut off from the world around them, so they can play a video game.

I think the better analogy here is 'laser tag' or 'dungeons and dragons'...

[Hitomi Tiponi]

While I think this figure is rather high I do think there will be a reasonable take-up, thanks to viral marketing, endorsement by celebs etc. What I do expect is that the majority of users will use them once or twice then put them in the drawer with their other techie indulgences - it could turn into the 'home fitness machine' of tech.

[Arcadia Codesmith]

"I think the better analogy here is 'laser tag' or 'dungeons and dragons'..."

About three times as many people have played Dungeons and Dragons as played World of Warcraft at its peak, and that's not counting the computer versions (both branded and blatant rip-offs... like, say, World of Warcraft).

I'm not picking on you, Pussycat. But that's the second analogy in this thread intended to discount VR headsets with comparisons to things that are much more popular and widespread than people think.

I do not expect VR headsets to be as popular as smartphones (or vibrators, or D&D) overnight, or within five years, and I don't expect that the current generation will surpass the top estimates posted here. What I do believe is that this will be enough to accelerate development of the next generation, which will be light, portable, able to switch between augmented reality and full immersion, and quite possibly include the full functionality of both a smartphone and a gaming rig.

And THAT'S when the revolution begins.

[joe]

Brought to you by the same clowns who said everybody on the planet would have an avatar by 2010. Oh, that was 4 years ago...hmmm...

Yes, I believe everything bad Futurists like to predict.