VR gaming market set to hit over €35bn by 2027
By Jean-François Pieri
Virtual Reality (VR) in the global gaming market was worth more than €6bn in 2020, according to new insights from Brandessence Market Research. Now, with a projected annual growth rate of 29.2%, it is set to hit more than €35bn by 2027.
It’s not surprising the COVID-19 pandemic has had a powerful impact on the VR industry. As people have moved indoors, VR’s attractions of advanced immersive experience, the increased demand for streaming VR gaming, and ever-growing revenue generated from platforms like Twitch mean that even to the layman’s eye, the industry has seen an uptick. A new study from Brandessence now confirms such growth will likely continue far into the future.
The study’s authors say the key factor in its forecast is the descending cost of VR technology, while processing speeds are on the rise. Big name players like Google are also investing more in VR platforms. Bransessence says that the growing competition in this fragmented but highly lucrative field to produce high-quality VR games at affordable prices is also helping to propel the industry forward.
Amid the spread of COVID-19, the increased importance of socialisation through gaming is also bringing new life to the VR industry, according to the report. The authors point out that the “authenticity, interactive, and collaborative nature” of VR gaming has become even more important as people spend more and more time at home.
Closely linked to the pandemic’s repercussions, Brandessence cites higher demand for the social but stay-at-home activities of e-learning, e-sports, and Twitch streaming. When it comes to the on-and off hiatus of large public events, the company says the near in-person experience of traditional entertainment venues like Olympic ceremonies or the cinema provided by VR tech – alongside its growing acceptance among the public – are becoming “key drivers of growth for the VR gaming market.”
Assessing the key trends in the market, Brandessence pinpoints the introduction of VR hardware designed for consumers in 2010 as when VR gaming started to take off in earnest. The last decade witnessed the arrival of Oculus Rift, the first consumer-ready VR headset, promising an inexpensive boost to conventional video gaming with its addition of VR technology. Facebook bought Oculus in 2014 for US$2bn (eds: €1.77bn), and its VR versions of cult games like Doom 3. The product launch, explains the report, kickstarted new collaborations between VR companies and game developers, while also signalling interest from major tech companies.
Sony’s release of its Playstation VR system two years later was another indicator of major players stepping into the VR field, at the same time as game developer Valve showcased its Valve Index VR headset. Electronics giant Samsung also launched a VR headset to support its range of galaxy phones in 2015. Brandessence says this increased interest in VR led to the emergence of low-cost, high-specification, and advanced mobile headsets.
The report also draws attention to dips in the market. In the beginning of 2010, it says the hardware for VR continued to take off, both in terms of capacity, and lowered costs. However, the lack of games led to a small pushback against VR gaming in 2018, as manufacturers believed it might not live up to its potential. But in 2019, Nintendo released its VR kit to support its Labo series; today the company’s VR range has expanded to support its core games like the Legend of Zeida, Super Mario Odyssey, among others.
And with the introduction of games like Valve’s Half-Life: Alyx, the authors say the market has changed dramatically. The game, with its new features including eliminating earlier motion sickness problems, racked up millions in orders. Its entry also led to increased demand for VR hardware, as the pandemic pushed gamers to experiment further with the technology. The report says that now, while major game developers like Sony and Nintendo keep a keen interest in VR technology, the gaming market remains a promising prospect for growth.
North America is likely to gross the highest share of total revenues, according to Brandessence, with the growing entry of established players like Google, Facebook, Amazon into VR hardware tech. It adds that the gamification trend in the corporate sector and increased demand for e-learning remain promising for the market. This, alongside the growing options for different VR gaming hardware and increased attention to the technology in areas like clinical research, remain key drivers of growth in the region. However, Asia Pacific is likely to drive the fastest growth for VR technology as increased hardware development in the region and the growing number of mobile game developers push the market forward.
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