Virtual reality (VR) has not grown as fast as perhaps some people thought it would, but don't worry, it's not going anywhere, Market research firm IDC says that despite "some unrealistic growth expectations in 2017," VR is still growing and will continue to do so. Meanwhile, the augmented reality (AR) segment is quickly gaining ground.
IDC's forecast calls for the combined AR and VR headset market to reach 13.7 million units by the end of the year, and 81.2 million by 2021 with a compound growth rate of 56.1 percent. The majority of the market will belong to VR, which will account for nine out of 10 headsets until 2019, but AR will pick up steam and claim a quarter of the market by 2021, according to IDC. They will also account for tens of billions of dollars.
"AR headset shipments today are a fraction of where we expect them to be in the next five years, both in terms of volume and functionality," said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. "AR headsets are also on track to account for over $30 billion in revenue by 2021, almost twice that of VR, as most of the AR headsets will carry much higher average selling prices with earlier adopters being the commercial segment."
This should come as good news to Microsoft, which will begin pushing mixed experiences in Windows 10 with the Fall Creators Update that is due to release October 17. Microsoft has been successful in convincing its hardware partners to jump on the bandwagon—Acer, Asus, Dell, HP, and Lenovo are all readying lower cost mixed reality headsets starting at around $300.
As it pertains to gaming, these mixed reality headsets will eventually support Steam, though probably not until sometime next year. Microsoft is also working with 343 Industries to bring some kind of Halo experience into the fold.
"Virtual reality has suffered from some unrealistic growth expectations in 2017, but overall the market is still growing at a reasonable rate and new products from Microsoft and its partners should help drive additional interest in the final quarter of this year," said Tom Mainelli, vice president, Devices and AR/VR at IDC.
Heading into 2018, IDC expects to see a rash of new products, including standalone headsets from major players.
