Since the launch of the original Oculus Quest, the Meta has been largely alone in the standalone VR headset market. Sure, competitors like Pico and HTC have been making standalone headsets for almost as long as the Meta, but the company’s desire to be a leader in the space has proven to be a successful strategy.
As a result, the Oculus Quest 2 is by far the most successful VR headset ever (opens in new tab). While we still don’t have complete sales data points on how many headphones Meta has sold in 2022, it looks like the company could surpass the 20 million sales line; a triumph and a representation of what’s to come for the VR market as a whole.
With that in mind, Meta faces more competition in 2023 than ever before. HTC is launching its first serious Quest competitor in the US next month, along with Sony’s PS VR2. (opens in new tab) will try to explore the premium VR segment. US Pico 4 possibility (opens in new tab) release is still anyone’s best guess, but even if it isn’t, Meta could still see Apple jump into the game ahead of Meta Quest 3 later this year. (opens in new tab) makes his debut.
Will they still win? With great certainty, yes.
2022 has been a super successful year yet
While we’re still waiting for Meta’s annual financial report for fiscal 2022, other analyst firms have already started crunching the numbers and creating reports on how many Quest headsets Meta sold during the year. The result? According to the NPD group, VR headsets will decrease by 2.2% compared to 2021.
Some outlets like CNBC (opens in new tab) He immediately jumped on the news to claim the death of the Metaverse. This is a common tactic of mainstream news outlets who generally don’t know what they’re talking about when it comes to VR.
CNBC’s journalism on this has been embarrassingly bad, only made worse by the number of outlets picking up the story over and over and parroting the same mantra. The problem is that the facts tell a very different story.
In a year when thousands of people lost their jobs, the best-selling VR headset was $100 more expensive than the year before.
Halfway through the year, Meta dropped the Facebook account requirement and raised the price of the Quest 2 (opens in new tab) Up to $100. As a rule, this is not the case always occurs in consumer electronics. The price of products decreases over time, it does not increase.
Despite this, the Meta gained only 2.2% less in 2022 than in 2021. It doesn’t take a genius to realize that this is a win for the industry, not a net loss. That’s all in a year where thousands of people lost their jobs, but the best-selling VR headset was $100 more expensive than the year before.
The speed is clear. People want to play VR games and they choose Meta more than anyone else.
Not all competition is the same
Meta’s unique position is one that will continue over the next year for several reasons. First of all is the price. The only company that can compete at the same price is Pico, owned by ByteDance of TikTok fame.
Michael Hicks and I interviewed Leland Hedges, General Manager of EMEA at Pico in December. While the interview is full of fascinating information, one particular fact caught my eye: Pico’s biggest market right now is Germany, a country that banned the sale of Oculus headsets years ago due to its ties to Facebook.
The Pico 4 is the only mainstream standalone VR headset that’s truly affordable. HTC’s Vive Focus 3 is an incredible product, but it costs €1,000 more than the Pico 4, making the Pico 4 the obvious choice for consumers.
Pico’s biggest market right now is Germany, which banned sales of Oculus headsets years ago because of its ties to Facebook.
But Pico can’t (and won’t) tell us when it will attempt a US release. No one in the company will say this out loud, but the reason is incredibly clear to me. Pico is owned by ByteDance, the same Chinese company that owns TikTok and is facing increasing scrutiny. (opens in new tab) from American and European governments over the years.
After all, nobody wants to be Huawei (opens in new tab) and find their investment drained when products from one country are banned.
But what about HTC? Vive XR Elite (opens in new tab) It’s an incredibly promising headset that tries to solve all the problems of the Meta Quest Pro (opens in new tab) still comes in hundreds of dollars cheaper.
It also marks the first time a Vive standalone headset is getting an actual US consumer release, which could propel the company to a level of success in the US it hasn’t seen since the original Vive.
The problem is the price. At $1,099, that’s more than double the price of the most expensive Quest 2, and almost the same amount as the upcoming Quest 3, which is rumored to start at $400 this October. HTC’s effort here is incredible and looks like a breathtaking headset, but there’s no denying that price is going to be more important this year as companies lay off more and more people. (opens in new tab).
The Vive XR Elite tries to fix all of the Quest Pro’s problems, but still costs twice as much as the Quest 2.
But what about Sony? The PS VR2 will launch exactly one month from now on February 22nd, and will ship with 30 games. (opens in new tab), many of which carry high-profile names. Resident Evil, Horizon, Gran Turismo, Jurassic World, Star Wars and The Walking Dead are names that every gamer knows and loves.
By all accounts, Sony should have a big show for the launch, and I totally think so, but Sony’s expectations are far lower than the Meta’s by a wide margin. The company will own around 2 million PS VR2s (opens in new tab) It’s set for a February release and expects to sell at least twice as much as the original PSVR.
The problem is that – at least for the market as a whole – that means only 2 million (or so) headphones will be sold in 2023. At $550 (plus the $400-plus cost of buying a PS5), it makes sense that sales expectations are lower than the $400 Quest 2, and it doesn’t need anything else to work.
VR continues to grow
And this is indeed a list of products that we know are coming out this year. But there’s one minor player I haven’t mentioned yet: Apple.
Apple enthusiasts continue to state that the headphones will be “released this year.” (opens in new tab)” Year after year, much of the industry wonders if such a product actually exists. Many rumors and leaks have suggested that Apple is not interested in competing directly at the Meta price point, proving once again that Meta will continue to lead the way. Regardless of who joins the race , bundle in VR headset sales.
VR isn’t going away anytime soon. There is zero data to suggest that it is “dying” or any other such nonsense.
There’s a possibility that Apple’s headset isn’t even in the same computing space as the Meta, HTC, Sony, or Pico. Recent rumors have suggested that Apple won’t even ship the headset with a proper controller, meaning it’s more of a media consumption device or has more to do with augmented/mixed reality than virtual reality gaming.
It would be like trying to say that a smartphone competes with a laptop because both have overlapping screens and some features. In short, I’m not holding my breath hoping that Apple actually tries to compete with the Meta on the gaming front.
Here’s the deal, though. Regardless of who comes out on top in 2023, the VR industry as a whole continues to grow exponentially, and everyone wins, especially developers. VR isn’t going away anytime soon. There is zero data to suggest that it is “dying” or any other such nonsense.
And I couldn’t be happier.
Forget waiting, get Meta Quest 2 now and start playing like you’ve never played before. VR is one of those things that you have to experience to believe, and once you put the headset on, you’ll never take it off.
