Forecast: 200k Virtual Reality Headset Units Sold By End of 2014. $60m Market Size.

Announcements made at GDC last week by Sony and Oculus have helped to firm-up the state of the consumer virtual reality market in 2014. For those of you who didn’t catch the GDC news…..

• Oculus confirmed that the second iteration of the developer kit (DK2) will be shipping in June/July 2014.

• Sony showcased Project Morpheus, their VR headset. However, this will not be shipping in 2014 and instead is rumoured to be available early 2015.

Back in January we released our State of the Market report and accompanying market sizing analysis. In this market sizing assessment we forecasted a total of 200k VR headset units sold in 2014, yielding a  market value of $60m (at an average sales price of $300). It looks like our forecast was pretty accurate for the following reasons:

• Oculus has sold 75k DK1 units to date (with sales now suspended for this version). Of this 75k, circa 25k were sold in 2014 (we estimate).

• We expect the vast majority of DK1 buyers to purchase DK2.

• With interest in VR and Oculus continuing to grow through 2014, we forecast at least 100k new sales (from new buyers) in 2014 once DK2 is released. This is a prudent estimate.

Our five year unit sales forecast is shown right. Post 2014, our forecast is based on the following assumptions:

• In 2014 Oculus is the only company selling a virtual reality headset. So, our 2014 forecast numbers for the market is essentially a forecast for Oculus.
• Sony enters the market Q1 2015 with a consumer version of Project Morpheus.
• Oculus also launches their consumer version (CV1) in Q1 2015.
• Microsoft and potentially three other major companies enter the market towards the end 2015. We anticipate Samsung, Apple, Google and LG to be in the mix here.
• Other hardware start-ups launch consumer VR headsets throughout 2015  and 2016.
• Hardcore gamers and Innovators drive initial sales (these are the people purchasing DK1 and 2).
• Early adopters and light gamers boost sales supported by the Early Majority and the Teen market from 2015, ramping up from 2016 onwards.

Total unit sales in 2015 is forecasted at 5.7m, rising to 10.9m in 2016 with the VR market establishing itself as a serious contender in the global gaming and entertainment marketplaces. Over the full five year period of 2014 to 2018, we forecast total cumulative unit sales of 56.8m.

Our Slideshare presentation containing more detailed market forecasts for consumer virtual reality is shown below. For more insight into the Virtual Reality market you can order our State of the Market report for free here.