Newzoo Predicts VR Gaming Revenue Will Double By 2024

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Newzoo published a new report this week, forecasting the near future of the virtual reality market, for both hardware and gaming. Among other findings, the analysis predicts that VR gaming revenue could rise to $3.2 billion by 2024, with up to 46 million active headsets in use.

More specifically, Newzoo predicts that the virtual reality market will reach $1.8 billion by 2022, with 27.7 million headsets in use. Standalone headsets and cloud streaming are making gaming more accessible, according to the analysis, as is VR support from popular game engines.

In particular, Newzoo points out that gaming remains the main use case for virtual reality. Attending virtual events or traveling, perhaps the kind of use cases that herald adoption of the metaverse, are further down the list. The report also finds that 73% of surveyed headset users mentioned playing video games as one of their main hobbies.

When it comes to games, the most popular genres seem to be adventure games, shooters, and simulation titles. Titles like Walking Dead: Saints and Sinners, No Man’s Sky, Boneworks, and Microsoft Flight Simulator provide a cross-section of the platform’s most popular titles.

The renewed interest in virtual reality

Newzoo attributes the current boom in virtual reality and its predictions to a few factors. First, VR experienced the same pandemic-induced boom as all other gaming. Second, Meta’s launch of the affordable Quest headset offered consumers a cost-effective means of playing VR games. Those headsets also work without any other hardware, like a powerful and expensive PC.

Third, Newzoo credits a virtual reality “killer app” for moving hardware units. Specifically, he names Half-Life: Alyx, which he says harnesses the power of a major triple-A franchise. Personally, I’d call a game like Beat Saber a killer VR app before Half-Life: Alyx, if only because it’s available on the wireless headset that Newzoo praised for its accessibility.

In 2023, PlayStation plans to release its PS VR2 headset for PS5 users, along with several new exclusive games. Meta also recently released the Quest Pro headset. Either could draw more gamers into VR, though Newzoo also points to the rise of companies like Pico.

It’s worth noting that Newzoo claims the gaming market overall will decline this year, largely because the industry is correcting itself after the aforementioned pandemic boom period. Newzoo did not account for virtual reality hardware in that forecast.

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