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The VR Market Suffered Serious Setbacks in the First Half of 2023

Published: 1.4.2024

In the first half of 2023, the virtual reality (VR) head-mounted display device market suffered a serious setback. According to the latest report from market research firm Counterpoint Research, shipments in this market fell sharply by 56% year-on-year, which is a surprising figure. Although the market has continued to grow over the past two years, the landscape of the VR market is undergoing major changes. 

In the U.S. market, sales of AR and VR devices plunged 40% in 2023 to $664 million, a much larger decline than last year. Last year, the figure fell only 2% year-on-year to $1.1 billion 

Within Meta, its Reality Labs division, which develops VR and AR technology, is also facing a severe financial situation. Sales in the third quarter were $210 million, but losses were as high as $3.7 billionSince the start of 2022, the unit has lost about $25 billion. This shows that the research and development and market application of VR and AR technology still face huge challenges. 

At the end of October this year, Meta's third-quarter financial report once again highlighted the huge losses in the Metaverse business. Meta Reality Labs' loss in the quarter was 19% year-on-year to US$3.74 billion, which was about 5% lower than the loss required by analysts. However, Meta warned when announcing its performance guidance that Reality Lab’s losses next year will be significantly larger than this year. This prediction the uncertainty of the future of the Metaverse business. 

Globally, the decline in the Chinese market was more significant, which shows that the weakness of the VR market is not an independent event but is closely related to the development of the global VR market. In the second quarter of 2023, China accounted for only 10% of global VR shipments. 

Although Pico, as the market leader, once occupied a huge market share of about 50%, it also suffered a heavy blow in the first half of 2023, with shipments declining by more than 50% year-on-year. This data shows the overall downward trend of the VR headset equipment market and the intensity of market competition. 

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