The consumer VR market is gearing up for a new period of competitiveness

The trend: Consumer VR headsets are poised to enter a new phase of competitiveness with an increasing emphasis on supplemental metaverse platforms.

• This week, executives from consumer VR industry leader Facebook recently teased images of what appear to be two VR headset prototypes.
• In one photo, CEO Mark Zuckerberg showed off what looks like a next-generation Oculus headset experimenting with “retina resolution,” which in theory would offer a resolution so high it’s indiscernible from reality.
• The other photo features soon-to-be CTO Andrew Bosworth wearing a smaller, seemingly standalone headset that looks strikingly similar to an early illustration of Apple’s rumored XR device.

Any new headsets from Facebook are worth watching because it stands tall as the undisputed industry leader. Oculus headsets captured almost two-thirds of global VR headset shipments during Q1 2021.

How we got here: Facebook’s artificially low Oculus prices forced most VR makers to pivot to enterprise customers in recent years, but there are early signs of a blossoming consumer market around the corner.

• HTC just announced its own portable, sunglasses-like VR headset meant mainly for immersive, 360-degree media consumption and light gaming. The headset, which will launch with 100 apps this November, doesn’t have a controller and instead uses a smartphone for a remote. Images of the device show it easily fitting in a small backpack.
• On the gaming front, Valve is reportedly working on its own standalone headset, and Sony may be gearing up to release its own Playstation VR headset by late 2022.
• Then there’s Apple, which, according to numerous reports, may release its first headset as soon as 2022.

The bigger picture: Though price and functionality have traditionally been top considerations for VR consumers, digital ecosystems (or metaverses) may become increasingly important complements.

• Both Facebook and HTC are developing their own consumer metaverse platforms. And while Sony doesn’t offer a metaverse per se, it does have millions of Playstation users who could interact in a de facto gaming metaverse.

The sleeping giant: The growing focus on VR metaverses will likely stand to benefit Apple when it enters the market thanks to its deep history of locking users into its frictionless ecosystem.

• Facebook’s Zuckerberg acknowledged the Apple threat in a Q4 earnings call—he predicted the two companies would become direct competitors in VR and AR.

The bottom line: The burgeoning competition is expected to lead to an industry-wide boom—according to our forecasts, consumer VR revenues worldwide are expected to increase from $3.5 billion this year to $5.7 billion by 2023.