Newzoo expects virtual reality game revenue to double by 2024

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Newzoo released a new report this week, which predicted the near future for the virtual reality market, for both hardware and games. Among other findings, the analysis projects that VR gaming revenue could rise to $3.2 billion by 2024, with as many as 46 million active headsets in use.

More specifically, Newzoo expects the virtual reality market to reach $1.8 billion in 2022, with 27.7 million headsets in use. Standalone headsets and cloud streaming make games easier to access, according to the analysis, as does VR support by popular game engines.

Notably, Newzoo points out that gaming is still the best use case for VR. Attending virtual events or traveling—perhaps the kind of use cases that herald metaverse adoption—are at the bottom of the list. The report also found that 73% of headset users surveyed listed one of their top hobbies as playing video games.

For 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 most popular platform titles.

Renewed interest in virtual reality

Newzoo attributes the current rise of VR and its outlook to several factors. First, virtual reality has ridden the same pandemic-induced boom as the rest of gaming. Second, the Meta release of the affordable Quest headset offered consumers a cost-effective way to play virtual reality games. These speakers also work without any other hardware, such as a powerful and expensive PC.

Third, Newzoo credits VR’s “killer app” for moving hardware modules. Specifically, he calls Half-Life: Alyx, which he says builds the strength of the main trilogy franchise. Personally, I’d call a game like Beat Saber a VR killer app before Half-Life: Alyx, if only because it’s available on wireless headsets that Newzoo has praised for its accessibility.

In 2023, PlayStation plans to launch the PS VR2 headset for PS5 users, along with several new exclusive games. Meta also recently launched the Quest Pro headset. Either one could get more gamers into VR, though Newzoo has also noted the rise of companies like Pico.

It should be noted that Newzoo claims that the overall gaming market will decline this year, largely because the industry is correcting after the aforementioned pandemic boom period. Newzoo didn’t take VR hardware into those expectations.

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