Extended reality (XR) headset shipments, encompassing both augmented reality (AR) and virtual reality (VR) technologies, plummeted 33% year-on-year in Q1 2023, per data from Counterpoint’s XR Model Tracker. This slump signals waning consumer interest in the XR market, partially attributed to a two-year period in which Meta’s Quest series has stagnated.
Meta, nevertheless, secured the pole position as the best-selling XR headset brand during the first quarter of 2023, attributed to the enduring appeal of its Quest 2. This VR headset sold 18 million units to the cumulative 20 million units of the entire Quest series shipped by Q1 2023. In a bid to keep the sales engine firing, Meta cut the price of Quest 2 following last year’s price hike, making the headset more accessible to the masses. Meta revealed plans for a Quest 3 debut later in the year, fueling expectations of a sales boost.
However, a shift was observed in Meta’s market share, which sagged to 49% in Q1 2023, marking a low point since the Q4 2020 launch of Quest 2. This dip coincides with the release of Sony’s PSVR2, the long-awaited successor to its 2016 PSVR. The PSVR2’s release stirred significant interest among Sony’s loyal gaming audience, propelling Sony to secure second place in the market with a 32% share. The new device also surpassed its predecessor by shipping 1.2 times more units in its debut quarter.
Trailing behind Meta and Sony, Pico and DPVR claimed the third and fourth spots, with 7% and 6% market shares respectively. Pico’s performance experienced a setback in Q1 2023, with a 38% drop in shipments, despite previous improvement following its acquisition by ByteDance, TikTok’s parent company. DPVR, meanwhile, faced a 40% decline in its shipments during the same period due to delays in order placement by its educational partners.
Looking at the broader 2023 landscape, it is a year marked by the launches of next-generation VR headsets, with Sony’s PSVR2, DPVR’s E4 and HTC’s Vive XR Elite stealing the spotlight. Packed with advanced technology and features, these headsets bear price tags around or exceeding $500, which may influence their market traction depending on perceived value among consumers.
