AR & VR Headsets Market Insights

Meta Sets the Bar in AR/VR, but Competition is Gearing Up for a Reality Check

After two quarters of declines, global shipments of AR/VR headsets finally returned to growth as volumes rose 12.8% during the third quarter of 2024 (3Q24) according to new data from the International Data Corporation Worldwide Quarterly Augmented and Virtual Reality Headset Tracker. However, growth was largely driven by one vendor: Meta.

Amongst the top five, Meta led the pack with 70.8% share during the quarter as the company faced favorable year-over-year comparisons with volumes declining 22.7% in 3Q23 as the Quest 2 began to phase out. Though it took a few quarters, the Quest 3 finally began to find its footing thanks to broader content selection and promotions such as Prime Day driving volume. Sony’s PSVR2 ranked second (6.7% share) as the as the company garnered attention from PC gamers and benefitted from promotions. Apple, ByteDance, and XREAL rounded out the top five.

While the market has become quite top heavy with the five representing over 90% share, the outlook for some of these companies remains in question. “Sony and ByteDance’s dedication to headset making seem to be wavering as shipments for both vendors continue to decelerate,” said Jitesh Ubrani, research manager, Worldwide Mobile Device Trackers at IDC. "This in turn provides an opportunity for brands such as XREAL and VITURE who appeal to gamers while innovating on both hardware and software.”

The versatility of Mixed Reality headsets such as the Quest 3 has already led the category to outshine others and even stands to replace augmented reality headsets under the right conditions. As such, IDC forecasts Mixed Reality headsets to grow 21.7% in 2025, shipping 7.7M units and remain as the largest category going forward. Outside Mixed Reality, Extended Reality devices that provide a simple heads-up display or content mirroring are expected to be the next largest category and it is where competition is expected to intensify over the course of the next 18 months.

“Glasses combined with Artificial intelligence and a heads-up display can provide a powerful experience for both consumers and enterprises,” continued Ubrani. “With Google’s re-entry into the market through Android XR, competition is about to heat up as neither Apple nor Meta has cemented themselves as a clear winner for the mass market.”

Android XR along with numerous startups and incumbents such as Meta will help Extended Reality headsets more than double in size in 2025 and achieve a compound annual growth rate (CAGR) of 85.7% through the end of 2028. These headsets will remain the second largest category and will predominantly operate while tethered to a smartphone or other compute device. Finally, true Augmented Reality headsets such as Meta’s Orion will take time to gain salience as these headsets require high levels of sophistication paired with battery and display tech that are yet to scale. Thus, IDC forecasts this category to remain niche, growing from 59,000 in 2024 to 377,000 by 2028.

Data table for "2024 Q2 Historical ARVR Market Share" chart

Quarter	Meta	Sony	Apple	ByteDance	Xreal	Others
2023Q3	54.8%	23.3%	0.0%	6.4%	4.2%	11.3%
2023Q4	61.7%	15.9%	0.0%	6.4%	4.7%	11.3%
2024Q1	36.4%	2.5%	16.7%	11.6%	9.2%	23.6%
2024Q2	59.5%	10.2%	9.0%	4.8%	4.1%	12.4%
2024Q3	70.8%	6.7%	5.8%	5.2%	3.4%	8.3%