Executive Summary

Like many research & intelligence firms, one of the things that ARtillery Intelligence does is market sizing. A few times per year, we go into isolation and bury ourselves deep in financial modeling. This takes the insights and observations we accumulate throughout the year and synthesizes them into hard numbers for the current and future spatial computing industry.

The latest such effort zeroes in on VR, whose aggregate global revenue is projected to grow from $9.04 billion in 2022 to $20.3 billion in 2027, a 17.6 percent compound annual growth rate (CAGR). This puts VR in the middle of the spatial spectrum in terms of revenue rankings. It trails mobile AR, given that the latter piggybacks on $3 billion+ global smartphones. But it exceeds headworn AR, given that it continues to be challenged on technical and cultural levels.

Segmenting the above VR figures, revenue is bisected by consumer and enterprise markets. The former is larger, and driven by gaming. VR conversely has valuable but relatively-narrow use in enterprise settings due to its sensory immersion that compromises safety, social presence, and ergonomics. Exceptions include immersive training and design collaboration, where VR’s immersion is aligned and additive.

In all cases, VR’s biggest accelerant is Meta. Its Quest 2 remains competitive at sub-$500 levels. This is a central piece in Meta’s longer-term strategy to reach network effect by gaining early market share through loss-leader pricing. Though strategic and self-serving, this brings VR’s cost down in a way that benefits consumers.

To that end, one of Meta’s goals has been to reach 10 million in-market VR units – a critical mass to attract developers en masse. As resulting content libraries grow, so does the user base, thus attracting more reach-driven developers. It’s a classic flywheel effect. More importantly, Meta has surpassed that target, with signals indicating 20 million+ Quest headsets sold to date.

The remaining question is if that flywheel effect has kicked in. Will adoption accelerate in the above ways? So far, we’ve seen the opposite effect in depressed Q2 revenue for Meta Reality Labs. But these declines could be short-lived, due to a saturated market for Quest 2 as Meta prepares for its next VR inflection with the launch of Quest 3. This principle has played out across the VR landscape as the next generation of devices – built around the advantages and expanded use cases of mixed reality – penetrates the market.

In that sense, it’s not just about Meta. As we’ll explore throughout this report, there’s notable activity from Valve, Pico, Sony, and HTC. The latter has executed a notable VR comeback, establishing a strong foothold in enterprise markets, and arguably beating Meta’s VR quality standards at the high end, given its lauded VIVE XR Elite.

So how do all these principles translate to revenue projections? That’s what we’ll quantify and qualify throughout this report…


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ARtillery Intelligence follows disciplined best practices in market sizing and forecasting, developed and reinforced through its principles’ 17 years in research and intelligence in tech sectors. This includes the past 7 years covering AR & VR as a primary focus.

This report focuses on revenue projections in various sub-sectors and product areas. ARtillery Intelligence has built financial models that are customized to the specific dynamics and unit economics of each. These include variables like unit sales, company revenues, pricing trends, market trajectory and several other micro and macro factors that ARtillery Intelligence tracks.

This approach primarily applies a bottom-up forecasting methodology, which is secondarily vetted against a top-down analysis. Together, confidence is achieved through triangulating revenues and projections in a disciplined way. For more information on what’s included and not included in the forecast (a key consideration when evaluating the findings) see the next slide.

More about ARtillery Intelligence’s market-sizing methodology can be seen here and more on its credentials can be seen here.

Disclosure & Ethics Statement

Unless specified in its stock ownership disclosures, ARtillery Intelligence has no financial stake in the companies mentioned in its reports. The production of this report likewise wasn’t commissioned. With all market sizing, ARtillery Intelligence remains independent of players and practitioners in the sectors it covers, thus mitigating bias in industry revenue calculations and projections. ARtillery Intelligence’s disclosures, stock ownership, and ethics policy can be seen in full here.


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