Last year was a difficult one for augmented reality and virtual reality (AR/VR) sector, according to the International Data Corporation (IDC). Worldwide shipments of headsets declined by 8.3%, IDC researchers noted.

The sector is primed for a strong rebound in 2024, however, IDC said.

Data from the Worldwide Quarterly Augmented and Virtual Reality Headset Tracker showed that 8.1 million units were sold worldwide in 2023.

Sony’s PSVR and Meta’s Quest 3 were “well received,” the report said. But economic pressures on consumers and less commercial spending put a damper on device sales.

AR/VR Headset Shipments

IDC suggests that 2024 may be a significantly different story: The AR/VR category is expected to grow at a robust 46.4% rate.

One of the driving elements will be a full year’s availability of Meta Quest 3, the third-quarter 2023 market leader with a 55.2% share. In addition, Vision Pro from Apple is expected to ship just under 200,000 units.

IDC stated that AR will enjoy a compound annual growth rate (CAGR) of 96.5% between 2023 and 2027. VR will have a CAGR of 30.1%. The combined category is expected to see shipments of 28.6 million units in 2027, for a 2023 to 2027 CAGR of 37.2%.

“While the new VR headsets are expected to drive volume, they also risk alienating some consumers as average selling prices trend upwards,” Jitesh Ubrani, the research manager for IDC’s Mobility and Consumer Device Trackers, said in a press release. “The high price tag of the Vision Pro will likely relegate the device to businesses, while the Quest 3, which is more accessible, is also pushing the limits of consumers’ wallets making VR a delight for the affluent, particularly as production ramps down on older and more affordable headsets.”