Dive Brief:

• ABI Research sees a positive future for virtual reality hardware, forecasting that VR device shipments will hit 110 million by 2021 as a number of new companies enter the space including Royole and Pico as well as a number of Chinese manufacturers, per a press release.
• Although the release points out that mobile-device reliant VR hardware like Samsung Gear and Google Daydream hold the lion’s share of the current market, that category is only expected to grow 42% through 2021. Standalone devices are predicted to hit a 405% compound annual growth rate over the same time frame.
• "Low cost and high accessibility has, and will continue to, drive VR adoption with mobile devices and associated VR accessories," said Eric Abbruzzese, Senior Analyst at ABI Research, in the press release. "However, a trend toward standalone devices is surfacing, and will continue over the next five years until mobile and standalone VR devices see parity in terms of shipments."

Dive Insight:

There are mixed messages about virtual reality's outlook, with some indications of a recent pushback against VR tech hype. This week alone had two different studies making news. Yes Lifecycle Marketing found that only 8% of marketers report are currently using VR in their advertising and 35% said they have no intention on including VR in marketing.

Additionally, Forrester Research on U.S. online adults found that 42% have never heard of VR headsets and 46% don’t see a use for the technology in their lives. And on top of those discouraging figures, Facebook announced it was shuttering 200 out of 500 Oculus demo stations at Best Buy locations citing “seasonal changes.”

However, the forecasts on VR from ABI track fairly closely to other predictions. For marketers, the takeaway is testing and learning about VR now is critical for brands where immersive experiences make sense as the technology, while progressing slowly at the moment, is likely to take off more aggressively in the near future. Per ABI Research, while gaming will remain VR’s “killer app” sector-wise other areas of VR growth include video, education and tourism.

The research company also predicts that VR applications in retail and marketing will see a 124% annual growth rate through 2021 based on an expected total market size of $64 billion with non-gaming software and content, VR advertising and VR-related video revenue driving that figure.