We're thrilled to announce the return of GamesBeat Next, hosted in San Francisco this October, where we will explore the theme of "Playing the Edge." Apply to speak here and learn more about sponsorship opportunities here. At the event, we will also announce 25 top game startups as the 2024 Game Changers. Apply or nominate today!

Virtual reality enthusiasts are collectively looking forward to Oculus Rift and HTC Vive, but one research group thinks those impressive devices won’t represent the bulk of consumer spending on VR this year.

Consumers will spend approximately $5.1 billion on VR hardware and software in 2016, according to market-intelligence firm SuperData. That’ll lead to an install of around 56 million across all devices — but only if you include cheap VR holsters like Google Cardboard. SuperData believes that those kinds of flimsy holders will make up the bulk of spending on VR, since the general consumer isn’t planning to invest hundreds of dollars into one of the more premium head-mounted displays. Of course, tech adviser Digi-Capital predicts that 2016’s hesitant start will eventually see the virtual and augmented reality market balloon into a $150 billion business by 2020.

But while SuperData predicts that most of that will come from cheap mobile VR devices in 2016, it notes that the inevitable hype that will surround the launches of Oculus Rift and HTC Vive will fuel the market’s overall growth. We still don’t know the price of the PlayStation VR, Rift, or Vive, but most estimates start around $350. We’ll find out the precise cost of Rift tomorrow when preorders go live.

“Initially, affordable smartphone devices will drive the bulk of sales as consumers first explore virtual reality before committing to the more expensive platforms,” SuperData research director Stephanie Llamas said. “After this first wave, consumers will likely move more high-end VR devices on PC.”


GamesBeat Next 2023

Join the GamesBeat community in San Francisco this October 24-25. You’ll hear from the brightest minds within the gaming industry on latest developments and their take on the future of gaming.

Learn More

SuperData noted that even hardcore gamers said that they would spend, on average, around $300 on a new VR peripheral for their console or PC. That’s a bit short of what most analysts are expecting, which means Sony, Oculus, and HTC may have to sell their hardware at a loss.

Alternatively, these early high-end VR companies could stick to a higher price while building up a library of software tested with early adopters. Meanwhile, Cardboard and even Samsung’s Galaxy-phone holder Gear VR could prime a new wave of consumers for the second and third generation releases of PS VR, Rift, and Vive.

GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.