The VR gaming market is constantly evolving and has grown significantly in the past few years. With key developments in VR technology, hardware, and software driving the market forward, VR game revenues are projected to increase sixfold in five years, from $0.5 billion in 2019 to $3.2 billion in 2024.
However, declining sales of VR headsets dampen this positive outlook. In the United States, sales in 2022 dropped by 2%, from a year earlier, to $1.1 billion in December 2022. Moreover, 2023 is expected to be another slow year for the VR market, with a weak economy and inflation causing non-essential purchases like VR headsets to be put on hold.
Now many are wondering what the near-term future holds for VR. Marcus Segal, CEO and founder of ForeVR Games, shares his thoughts on the current state of VR and what’s in store in the future.
Dissecting the Decline in the VR Gaming Market
Asked about why VR sales have declined in the US despite the launch of Quest Pro and other highly-anticipated VR devices, Segal said that there are many factors at play. According to him, the decline could be due to a recession or a market correction following COVID-19.
“When all signs point to a financial downturn, people hold on more tightly to their money,” Segal told us. Or it could be the excitement about new headsets coming from Sony, Apple, Pico, and HTC that is keeping potential buyers on the sidelines.
Then we also have to factor in the return to in-person social gatherings, so VR gaming now has to compete with movie theaters, concerts, and other live experiences as the world returns to in-person social gatherings.
Like in any other industry, the recent decline in VR sales is disheartening, but, according to Segal, this is not uncommon in nascent industries.
It is worth noting that the market is not as bleak as it appears. Despite the seemingly downward trend, a flood of new VR headsets is coming from Sony, Pico, Apple, HTC, and more. Competition between manufacturers means better products, lower prices, and a larger user base for VR gaming in the future.
Segal suggests “try before you buy” mall installations, immersive classroom settings, and other creative efforts to drive consumer awareness.
Barriers to VR Adoption
Segal also notes that while VR has made significant progress in recent years, there are still some barriers to adoption, including cost and the need for powerful hardware. He believes that the biggest barrier to VR adoption is still the form factor. New headsets’ design must be lighter and less bulky to become more appealing and comfortable to use.
According to Segal, discoverability is also a challenge for VR. Traditional forms of advertising are not as effective, and manufacturers need to get headsets into the hands of consumers who haven’t tried VR yet. He stresses that sustaining and improving engagement is critical to VR’s success.
Lastly, Segal stressed how crucial accessibility is for VR adoption. Games must be playable for people of all ages and abilities. ForeVR Bowl is an example of this, designed to be played with a single button in a seated or standing position.
The Role of Content in Driving VR Adoption
One of the biggest drivers of VR adoption is compelling content. Segal believes that game developers have a critical role to play in shaping the future of VR. “Game developers need to reach new audiences, and that requires manufacturers promoting new games and hidden gems,” he said. “We as developers also need retention features and content to motivate players to pick up their headsets and plug in more frequently.”
As a former Zynga executive, Segal witnessed the power of social games, like FarmVille, to connect hundreds of millions of people of all ages. “In my view, play is one of the best things about being alive,” he said. For ForeVR Games, the focus is on taking the feeling of connection in play to the next level with VR, allowing players to feel as though they are in the same location regardless of their physical distance.
Customization is also key, allowing players to have fun while improving their skills over time. Segal explains, “Today, we believe that the most successful VR games and experiences are those that are easy to pick up and play, but also offer depth and complexity for players who want that option.”
A Future of Growth and Innovation in VR Gaming
The world of VR gaming holds immense potential for growth and innovation. As game developers like ForeVR Games continue to push the boundaries of what is possible in VR and advancements in hardware technology emerge, entrepreneurs have many reasons to be optimistic as they venture into VR gaming.
However, success in VR gaming requires a passionate team that sees challenges as opportunities to further what is possible, and the ability to listen to and incorporate feedback from the player base.
As the VR industry continues to evolve, those who are willing to take on the challenges and embrace the opportunities can shape the future of this exciting and dynamic field.
