Virtual reality taking off with augmented reality also set to soar

The addition of 'exciting' new titles will prompt a wave of virtual reality head mounted hardware interest this year, with the virtual reality hardware market forecast to skyrocket this year.

IDC is forecasting shipments to reach 9.6 million units globally, with hardware revenue soaring to US$2.3 billion.

And while IDC says its virtual reality driving the hardware volume this year, the analyst firm is predicting augmented reality hardware will also ramp up over the next few years.

The two combined markets combined will see hardware shipments surge past 110 units in 2020, IDC says. Of that, 64.8 million is forecast to be VR hardware, up from 9.6 million this year, with AR fast catching up, at 45.6 million – up from 400,000 units in 2016.

Tom Mainelli, IDC vice president for devices and displays, says the first major virtual reality tethered head mounted displays (HMD) from Oculus, HTC and Sony should drive combined shipments of more than two million units this year.

"When you combine this with robust shipments of screenless viewers from Samsung and other vendors launching later this year, you start to see the beginning of a reasonable installed base for content creators to target," Mainelli says.

IDC breaks the  augmented and virtual reality market into three major device categories: screenless viewers, such as Samsung Gear VR, use the screen of specific smartphones to drive the experience; tethered HMDs, which include Oculus Rift, utilise an existing compute device such as a PC, game console or smartphone; while standalone HMDs integrate processing in the display itself, as Microsoft HoloLens does.

Unsurprisingly, video games are predicted to be the main reason customers pick up an Oculus Rift, HTC Vive or PlayStation VR this year.

Lewis Ward, IDC research director for gaming, says while there have been some launch window hardware shipment hiccups that need to be addresses near-term, he's confident they will be ironed out 'before the holiday season'.

"The addition of exciting new titles will lead to a new wave of VR HMD hardware interest among those buying for themselves or family members and friends," Ward says.

The AR market however, is predicted to take a little longer to fully heat up.

"While development kits from players such as Microsoft, Meta and others point to a strong future in AR hardware devices, these devices are dramatically harder to produce than VR products," Mainelli says.

He cautions that doing it right is more important than doing it fast, urging the industry to continue its slow and steady approach given the important role AR will play in the future.

"AR is going to have a profound impact on the way we interact with technology and the way we do our jobs for many years to come.

"In the meantime, we expect companies to begin experimenting with AR software on devices already in use: smartphones and tablets.

The new report from IDC is its first worldwide AR/VR forecast, indicating the growing demand and interest in the technologies.