SuperData raises XR investment projection for 2020

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Recent investments in Varjo and Nreal pushed up SuperData’s total projection for 2020, signalling that prolonged lockdowns and work-from-home arrangements have shown the potential of XR in both personal and professional settings

Quick read

➨ Investments in virtual and augmented reality companies are projected to reach $915 million in 2020
➨ The $915 million projection for 2020 is up from SuperData’s prior estimate of $830 million, following Varjo’s $54 million and Nreal’s $40 million funding rounds in Q3
➨ The market intelligence firm predicted that Facebook’s discontinuation of Oculus Rift S will push potential PC virtual reality users toward Quest 2. Next year, sales are expected to reach three million, up from a prior estimate of 2.6 million

The story

Investments in virtual and augmented reality companies are projected to reach $915 million in 2020, according to market intelligence firm SuperData.

According to SuperData’s Q3 2020 XR update, investments for this year will be down from 2019’s $1 billion.

But the $915 million projection for 2020 is up from SuperData’s prior estimate of $830 million, following Varjo’s $54 million and Nreal’s $40 million funding rounds in Q3.

SuperData said: “Prolonged lockdowns and work-from-home arrangements have shown the potential of XR in both personal and professional settings, and investors are taking note.”

SuperData also commented on several virtual reality and augmented/mixed reality headset trends. Oculus Quest 1 was the top seller in Q3 2020 with 161,000 units, and the launch of Quest 2 will provide a sales bump for Facebook.

“Pent up demand, a lower price and holiday season gift-giving are all set to push Quest 2 sales up dramatically over the original at launch,” according to SuperData.

The market intelligence firm predicted that Facebook’s discontinuation of Oculus Rift S will push potential PC virtual reality users toward Quest 2. Next year, sales are expected to reach three million, up from a prior estimate of 2.6 million.

SuperData went on to argue that widespread consumer adoption of augmented/mixed reality headsets is not expected to take off until at least 2023, despite Facebook’s recently announced Project Aria and Apple’s continued investment into the space.

“Issues that held back firms like Magic Leap and North, such as limited consumer use cases, are set to persist in the near future.”

SuperData said the enterprise market will generate more than 70% of augmented/mixed reality hardware revenue through to the end of 2022.

The market intelligence firm also commented on the situation with the Valve Index during Q3 2020, when limited supply held back sales of the popular headset.

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Main image: Pepi Stojanovski / Unsplash

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