Newzoo predicts VR games revenue will double by 2024

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Newzoo released a new report this week, forecasting the near future of the virtual reality market, both for hardware and games. Among other findings, the analysis predicts that VR games revenue could rise to $3.2 billion by 2024, with as many as 46 million active headsets in use.

More specifically, Newzoo predicts that the VR market will hit $1.8 billion in 2022, with 27.7 million headsets in use. Standalone headsets and cloud streaming are making games more accessible, according to the analysis, as is support for VR by popular game engines.

Notably, Newzoo notes that gaming is still the top use case for virtual reality. Attending virtual events or traveling — perhaps the sort of use cases that presage metaverse adoption — are further down the list. The report also finds that 73% of headset users surveyed listed one of their top hobbies as playing video games.

As for games, the most popular genres appear to be adventure games, shooters and sim titles. Titles like Walking Dead: Saints and Sinners, No Man’s Sky, Boneworks and Microsoft Flight Simulator provide a cross-section of the platform’s most popular titles.

The renewed interest in VR

Newzoo attributes VR’s current rise and its predictions to a few factors. First, VR rode the same pandemic-induced boom as the rest of gaming. Second, Meta’s release of the affordable Quest headsets offered consumers a cost-effective means of playing VR games. Those headsets also work without any other hardware, such as a costly, powerful PC.

Third, Newzoo credits a VR “killer app” for moving hardware units. Specifically, it names Half-Life: Alyx, which it says leverages the power of a major triple-A franchise. Personally, I would call a game like Beat Saber a VR killer app before Half-Life: Alyx, if only because it’s available on the wireless headsets that Newzoo praised for accessibility.

In 2023, PlayStation plans to launch its PS VR2 headset for PS5 users, alongside several new exclusive games. Meta also recently launched the Quest Pro headset. Either of those could get more gamers into VR, although Newzoo also notes the rise of companies like Pico.

It’s worth noting that Newzoo claims the games market overall will decline this year, largely because the industry is correcting after the aforementioned pandemic boom period. Newzoo did not factor VR hardware into that forecast.

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