Virtual and augmented reality to create real world sales of $12bn within five years

Lynsey Barber
Follow Lynsey
Virtual worlds are producing real world cash (Source: Getty)

Very real sales of virtual and augmented reality devices are expected to hit $12bn within the next five years, according to fresh forecasts which also predict a major tech firm such as Apple or Amazon launching smart glasses.

The number of devices sold this year alone is expected to come in at 16m, up by nearly half on 2016 CCS Insight estimates in its annual industry forecast. By 2021 that figure is expected to reach 99m.

Smartphones will account for the biggest number of devices which support VR and AR by the end of the year, but it's dedicated devices with significantly higher price tags which will account for the biggest spend - around two-thirds of the $1.6bn forecast.

Sales of devices such as Facebook's Oculus, HTC Vive and Sony's Playstation VR are expected to grow to 5m in 2018, up from 3m this year.

Read more: Here's how you could pay in future when you go virtual reality shopping

"The expected growth is encouraging progress, but it has not all been plain sailing. The three biggest makers of dedicated VR headsets all cut their prices this year in an effort to boost sales and grab a bigger slice of the market," said CCS Insight analyst George Jijiashvili.

The firm expects Google's greater support for VR on its Daydream headset to boost sales toward the end of the year and into 2018, as will a greater focus on content beyond gaming.

"So far, many people have bought VR devices for gaming, but other material, including sports, film, TV and pornography, is now playing a bigger role in the market's growth," said Jijiashvili.

Apple has put augmented reality on the radar with its ARKit, giving developers an easier way to create AR apps. Ikea for example launched an app that can be used to picture furniture at home with just an iPhone or iPad.

Read more: It's official: Google Glass is back and now it means business (literally)

Jijiashvili said this uptake of the technology on smartphones will act as a gateway for full AR and VR devices, and the forecasts take into account a major entry into the sector by the likes of Apple or Amazon with a pair of smart glasses.

"AR experiences using a hand-held smartphone can only be a good thing for head-worn technology like AR glasses," he said.

"It is only a matter of time before a big manufacturer offers a pair of smart glasses designed for consumers. We have a higher-volume scenario in the forecast based on a big company such as Amazon or Apple launching glasses. This could provide a huge lift to the segment in a similar way to Apple entering the smartwatch market".

Google earlier this year resurrected its own smart spectacles, Google Glass, for use in business.

Related articles