How Many Premium VR Devices Will Sell by 2020? Bloomberg/Gartner's Forecast Suggests 42 Million

I was just reading this Bloomberg story on Google's investments in the VR space, which included this intriguing "Virtual Insanity" chart:

So Bloomberg Intelligence and Gartner forecast VR equipment sales (not counting smartphone-based VR equipment*) to hit $21 billion by 2020. I really wish analysts would break down estimates like this more clearly, because the average reader just goes "Whoa, that's a lot of money", without really knowing what it means. So let me try and clarify:

According to this Bloomberg Intelligence/Gartner forecast, by 2020, people will buy less than 42 million units of Vive, Oculus, Playstation VR, and other high-end VR devices.

Divide $21 billion by an average device price of $500 (Oculus and Vive are currently more, but assume their prices go down every year), and 42 million is what you get. That might seem like a lot, but really, that just makes premium VR devices a subset of the overall videogame console/PC gamer market:

The Playstation 4 has sold 40 million or so units. (The Xbox 360, 84 million sold; registered users of the PC game delivery service Steam, 125 million+.) This is not surprising, because most gamers who own those platforms are the ones most likely to also buy a VR device -- especially PS4 owners, who have a custom-made HMD just for them. I'm actually skeptical the VR market will even grow this large (for reasons exhaustively discussed elsewhere) but even if it does, remember that we're still dealing with a niche within the niche of hardcore gamers. (About 150-250 million people worldwide, depending how you slice the data.) Not "Virtual Insanity" numbers, as the chart suggests, but not "Virtual Meh" numbers either -- how about just "Virtual OK"? 

 

*Of course, the "not counting smartphone-based VR equipment" is the big caveat, because we may see Samsung Gear and other devices sell much more than their premium brethren -- but even they still have a content and retention hurdle to leap over.

Comments

[jack]

Yeah Gartner said everybody on the planet would have an avatar by 2010.

Howz that workin out for ya?

[Iggy]

I'm a VR skeptic, but the devices seem a natural add-on to gaming consoles. That's a big market. I'd be more likely to buy a console than a high-end gamer PC.