The metaverse continues to reach new heights with the evolution of wearables such as virtual reality (VR) headsets. However, given the adverse economic conditions, sales of these headsets have declined. But do firms still believe 2023 will be the metaverse’s year?
The metaverse was one of the biggest trends of 2022. The industry was estimated to grow to $800 billion in 2024, according to a Dec. 2021 Bloomberg report. The immense growth of the metaverse and virtual reality has lured many entrepreneurs from gaming, arts, e-commerce, healthcare, blockchain, and other retail leaders to join the metaverse space.
The metaverse is a simulated digital environment that blends virtual reality (VR) and augmented reality (AR), social media concepts, and blockchain to build areas for rich user interaction that resemble the actual world. The person can play shop and even work in this simulated environment without leaving the comfort of their home.
Users can join the metaverse from any part of the world. They need a high-speed internet connection and a VR headset to immerse themselves in a 3D and simulated world.
VR headsets transport the person to a digital world without getting out of bed or leaving the house. The headset and VR gloves are used to enter the domain. However, it is reported that by 2030 these VR headsets will transform into a full body haptic suit.
At present, the headset that created a stir within the market was Meta’s Quest 2, which was made available in 2020. It was followed later by the Quest Pro, which focused on businesses but cost $1,100 more than the Quest 2. The significant price rise has made it unaffordable for many VR enthusiasts. This is evident in the sales statistics in the U.S. and on a global scale, given Meta’s majority share and dominance.
According to data from NPD Group, sales of VR headsets slumped by 2% by the end of Dec. 2022 from $1.10 billion in 2021. The decline amounted to 12% year-on-year to $9.60 million.
The decline in sales comes as no surprise given the harsh market conditions. Ben Arnold, NPD’s consumer electronics analyst via Twitter, told BeInCrypto: “VR had an amazing holiday in 2021. It was a great time (in 2021) to get one of these products, and VR totally crushed it.”
Nonetheless, the rising prices attributed to inflation remained the main factor behind the decline in sales figures for 2022. To shed more light on the narrative, BeInCrypto reached out to analysts at CCS Insight. Following the conversation via email, the team in a report stated: “Macroeconomic weakness is leaving its stamp on consumer device markets, and virtual and augmented reality devices – often referred to together as extended reality – are no exception.”
The company said global unit sales in this segment reached $10 million in 2022. But is only expected to grow to $11.40 million in 2023.
Apple, Sony, Jump on Metaverse Bandwagon
The tech giant Apple, aims to release their version of headsets this year. Another leading name in the game, Sony’s iteration of headset will cost around the $500 mark and is due to arrive next month.
Another tech firm based in Taiwan, HTC, recently introduced the VIVE XR Elite.
Cher Wang, co-founder, and chair of HTC, said the release of its $1,099 wearable was the gateway to the metaverse.
Other companies, too, are jumping on the same bandwagon, as reported by BeInCrypto. Big names are investing significant cash reserves to achieve the same.
Problems to Consider
The metaverse, like other technologies before it, is bound to face obstacles. And as popularity rises, so will the interest of regulatory watchdogs.
There are different paths for illicit actors to steal from users in the metaverse. They include financial crimes such as scams and fraud, in addition to those more specific to digital assets. These include the hacking and theft of digital assets belonging to users of services in the metaverse. Hence, the call for regulators to look at this emerging innovation.
Also, some uncertainty and ambiguity within the metaverse still needs clarity.
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