You probably don’t watch videos or play games in virtual reality now, but that could change very soon.
By 2022, there will be over 55 million active VR headsets in the US, PwC projected in its annual report on global media and entertainment today. To put that in perspective, that’s as many headsets as there were paying Netflix members in the US (pdf) at the end of March.
The advisory firm expects virtual reality to be the fastest-growing media and entertainment category in terms of revenue over the next five years, albeit from a low base. It’s expected to rise from a meager $414 million in US revenue in 2016 to $7.2 billion by 2022. Globally, it’s expected to show an average annual growth rate—or compound average growth rate—of 40% over the next five years, compared to a 10% growth rate for the next fastest growing category, online video.
The media industry has long waited for virtual reality to live up to its potential. In 2016, the much-anticipated Oculus Rift, HTC Vive, and PlayStation VR headsets launched, and were expected to boost adoption. But “many were disappointed by the slow progress of VR by the end of 2016, having been lulled into expecting overnight success by recent app and social media platforms,” the report said. The technology was too new and the devices too pricey to hit with audiences right away, and the average person still isn’t used to strapping a device to their head to watch a video or play a game.
But new content from studios like AMC, Disney, Sony, Time Warner, and Netflix, which are all experimenting with VR, and the release of true VR games like Resident Evil 7 (as opposed to short demos), are expected to grow the audience for the technology beyond the early adopters. Games will be half the market for VR by 2022, and video will make up much of the rest. Televised sports are particularly promising, according to PwC.
The firm says newer and more advanced hardware like those based on Microsoft’s Windows Mixed Reality standards, along with standalone headsets like the Oculus Go and HTC Vive Focus, are also making easier and more affordable to access this new VR content. About 40% of the active headsets projected for the US for 2022 will be these newer, more consumer-friendly options. Many of the earlier models were more expensive and required cable connections to powerful PCs to run.
VR venues like The Void, VR arcades where customers can try a range of headsets and experiences, along with VR theme parks, are also opening up VR experiences to a wider group of people, the report said.