The Chasm for Virtual Reality is Deep and Wide
- 1829 US Adults
- General Population Representative of Age/Gender
- Mix of Non-VR Owners and VR Owners
- Completed August 2023
Over the summer, we ran a consumer survey exploring their interest and current ownership and usage of VR headsets. With Apple’s announcements of Vision Pro, we hoped to gauge the broader consumer opportunity for VR, and maybe someday AR, but also explore how non-owners of VR headsets and owners of VR headsets think about the products and experiences. In this article, the focus will be on a few key insights from our study on non-owners of VR headsets, and why we believe mainstream adoption of these devices is still many years away.
VR Demo’s Have Mostly Diffused = >40% of General Population
One of the more interesting takeaways from our study is that VR experiences have diffused. Amongst the US adults who participated in our survey, 46% have already tried a VR headset experience. I point this out because one of the main arguments for the slow adoption of ownership of VR is that most people have yet to try it to be convinced to buy one. Our data shows that this is not the case.
Another thing we were very interested to find out is how most consumers have been having their first few VR experiences. We felt this would show whether these products will best be experienced at retail or elsewhere. Perhaps not surprisingly, 52% of respondents said their first experience with a VR headset was at the home of someone they knew. This is important for several reasons, and in my opinion, only strengthens the position that these products still have a significant chasm to cross. Firstly, our data shows that current VR owners are huge proponents of the product. Meaning they are enthusiastic about VR and, from our study, 90% of current VR headset owners have recommended the product to a friend or family member. To add further context to this point, every consumer survey we have run consistently affirms the single driving force of a new product’s adoption is a trusted recommendation from a friend or family member. Yet, despite our data confirming that a solid portion of the US population has tried a VR headset experience and most likely heard positive things and possibly even recommended one by a friend and family member, less than 10% of the US population still owns one.
Price Points Are Not the Issue
Another argument for the slow adoption of VR headsets could be that they are still too expensive. However, that is unlikely the case. We know that products under $500 are a sweet spot for significant annual sales of consumer electronics. Using our model of annual sales of consumer electronics by price point, globally, ~350-400 million consumer electronics products a year are sold below the $500 price point. Quest 2 and Quest 3 are both in the $299-$399 price point.
We asked a price-specific question to non-VR owners to gauge the potential price ranges they are willing to pay should they ever become interested in VR. 70% of respondents indicated $500 or less would be their price range, with the vast majority saying between $100-$500 is the sweet spot.
Slow Adoption Despite Positive Experiences
Another argument for the slow adoption of VR headsets is that the experience is still insufficient to convince the masses to buy them. Again, our data does not indicate this is the case. Of those who have tried a VR headset, 68% said their experience was positive. Interestingly, only 10% indicated they had a negative experience with a VR headset.
When asked if your VR experience has convinced you to consider purchasing a VR headet, 77% indicated they remain unconvinced.
Brand Preference Will Matter
Most respondents in our study indicated their first experience with a VR headset was with a Meta Oculus headset. This makes sense, given sales estimate rumors indicate Oculus as the leader in sales volume, and a wireless VR headset is a dramatic experience improvement over a cabled VR headset. Despite high consumer awareness of Meta Oculus, and most people having their first experience with VR on an Oculus headset, Meta did not lead brand preference when we asked consumers if their interest would ever change and if they would be willing to buy a VR headset, which brand they would consider purchasing. Again, perhaps unsurprisingly, knowing the strength of Apple’s brand, 56% indicated Apple as the brand they would most consider in the future if/when they ever became sold on a VR headset.
The Chasm to Cross
Today, VR still remains a niche/enthusiast category. The fact that many US consumers have tried and had a positive experience with a VR headset and that current prices of very good products like Meta Quest exist at mainstream price points and adoption remains below 10% of the general population is not a great sign for the category.
From the beginning, our belief was the form factor, and the primary use cases remain challenged for a mainstream audience. We continue to believe there are compelling signs that there is a market here in the future, but we have no current evidence a drastic change in adoption is on the horizon.