Hard data on the VR market is often difficult to come by, while broad ‘industry reports’ are often so general that it’s difficult to see what things look like ‘on the ground’. To get a sense of VR’s outlook in 2021, we’ve collected 14 of the most recent and concrete indicators for your perusal.

Update (February 26th, 2021): Sony’s confirmation this week that a next-gen PlayStation VR headset is in development was big news for the industry at large. We’ve updated this article with the news to give the most accurate picture of the VR landscape in 2021.

Oculus Quest

Zuckerberg: Quest 2 ‘on track to be first mainstream VR headset’, Next Headset Confirmed

Key Data Points:
  • Quest 2 sales drove Facebook’s Q4 non-advertising revenue to $885 million, a 156% increase year-over-year
  • More than 60 Oculus developers have reached $1M+ revenue
  • Estimates based on this data suggest between 500,000 and 1,000,000 Quest 2 units sold in Q4 2020 alone
  • Zuckerberg claims Quest 2 is “on track to be the first mainstream virtual reality headset,” and confirms the next iteration of the headset is in development

Takeaway: Thanks to Quest 2’s performance, Facebook is more bullish than ever on VR. While Zuckerberg in years past has described the company’s VR work as long-term investments not expected to pay out for years; he says about the company’s latest results, driven by Quest 2, “I think that this quarter’s results show that this future [that we’ve been working toward in VR] is here.”

Total Quest Games Reviews Have Exceeded Oculus PC Reviews in Less Than Two Years

Key Data Points
  • The total count of game reviews on the Quest store have surpassed those of the Oculus PC store (see chart)
  • The Quest store is seeing many times more reviews per day on average (see chart)
  • 79% of Quest games have surpassed 100 reviews, compared to just 19% of Oculus PC games
  • Games on the Quest store are also rated higher on average than games on the Oculus PC store (see chart 1, chart 2)

Takeaway: These signals show Quest’s momentum compared to Oculus PC, and why Facebook is largely abandoning the latter. Valve, however, continues to support the PC VR ecosystem through SteamVR, and will likely get a boost in growth as a result of users abandoning the Oculus PC ecosystem.


Facebook to Discontinue Rift Product Line in 2021, Will No Longer Build PC-only VR Headsets

Key Data Points:
  • Facebook betting the future of VR on standalone headsets like Quest 2
  • Not just the Rift S will be discontinued this year, but the entire Rift product line (no more PC-only headsets from Facebook)
  • Players can continue to use Quest with a PC thanks to Oculus Link which allows the headset to plug into a capable computer to use high-end VR content

Takeaway: Once a leader in the PC VR space, Facebook seems content to leave that portion of the market to someone else (namely, Valve). While Quest and Quest 2 can continue to work with a PC by plugging in, the company’s PC VR store has been left to languish. Facebook believes affordable standalone headsets will capture the mainstream market it’s seeking

Valve: Steam Saw 1.7 Million New VR Users in 2020, 71% Increase in VR Game Revenue

Key Data Points:
  • 1.7 million new VR users on Steam in 2020
  • 104 million VR sessions on Steam in 2020
  • Average VR session playtime in 2020 was 32 minutes, a 30% increase year-over-year
  • VR game revenue on Steam grew by 71% year-over-year (Half-Life: Alyx accounts for 39% of that growth)

Takeaway: Steam may not have seen the breakout success of Quest in 2020, but the platform continues to grow. A large portion of revenue growth in 2020 came directly from Half-Life: Alyx, which shows the game cementing its mark as one of VR’s killer apps.

Analysis: Monthly-connected VR Headsets on Steam Pass 2 Million Milestone

Key Data Points:
  • Monthly-connected headsets on Steam reached 2 million for the first time in 2020
  • 2 million headset milestone first reached in April 2020, but now held consistently for four months running, with an all-time high in November 2020 at 2.3 million (see graph)
  • It took 40 months for Steam to reach 1 million monthly-connected headsets, but just 7 more months to reach 2 million
  • Monthly-connected headsets up 94% year-over-year

Takeaway: The number of Steam users with VR headsets continues on a strong growth trajectory. While Facebook headsets make up 51% of connected headsets (see graph), a larger number of induvial headsets now hold sizeable shares, showing increasing competition and choice for consumers (see graph). The five most popular headsets on Steam are: Rift S, HTC Vive, Oculus Quest, Valve Index, and Rift.

Despite Shortages, Valve Index Among Steam’s 5 Top-grossing Products for 13 Weeks Straight

Key Data Points:
  • Index has been among the 5 top-grossing products on Steam for 13 weeks running (see chart)
  • The headset has also peaked as the #1 grossing Steam product on eight separate occasions since release (see chart)

Takeaway: Index may not be selling in massive numbers, but its big price tag means it has been earning as much if not more revenue than many major games on Steam. The data suggests that Index has been a significant revenue stream for Valve—likely much larger than Half-Life: Alyx—showing that the enthusiast VR segment is willing to shell out cash for high-end headsets.

PlayStation VR

Sony Confirms Next-Gen PSVR is Coming, New Controllers to Feature DualSense Tech

Key Data Points
  • Sony has finally, in no uncertain terms, confirmed it will be launching a next-gen PSVR headset for PS5—but not in 2021
  • Technology from PS5’s lauded ‘DualSense’ controllers will be part of the next-gen controller design 
  • The company had not previously outlined its future VR plans, leaving many to wonder if the company would be exiting the segment

Takeaway: Despite a strong sales record and some great games for Sony’s first-gen PlayStation VR headset, in recent years the company’s silence on its future VR plans had grown deafening. With a new console just hitting the market and the aging PSVR nearing its fifth anniversary, it was beginning to look like Sony was muling an exit of the VR segment. While a new headset is on the way, the company says it won’t be released in 2021.

VR Content

For a Veteran Studio That’s Weathered the Storm, VR Has Become a Lucrative Business

Key Data Points
  • VR studio Cloudhead Games shared a graph showing its relative revenue from 2016 through 2020 (see graph)
  • December 2020 revenue grew 60% year-over-year
  • In 2020, unique users that played the studio’s game grew by 131% year-over-year

Takeaway: Cloudhead Games is one of the most veteran VR studios in the industry. CEO Denny Unger revealed the many ups and downs the studio and the industry at large has seen since the launch of the first consumer VR headsets to today. Cloudhead saw the initial VR launch hype dying down by 2018, leaving the studio on the verge of pivoting away from VR. Thanks to a new perspective on VR game design culminating in its latest title, Pistol Whip, and the launch of Oculus Quest, the studio has seen new levels of success in 2019 and 2020.

Google Makes ‘Tilt Brush’ Open Source as Active Development Comes to a Halt

Key Data Points:
  • Google formerly ceased development on Tilt Brush, a VR painting app which has been called an early VR ‘killer app’ by some
  • Though official development comes to a halt, Google open-sourced the project so that it can live on

Takeaway: Though Google was very bullish on VR through 2016 and 2017, the company didn’t see the traction it hoped for with Daydream, its Android-based VR platform. Having largely dropped its VR ambitions by 2018, the fact that Tilt Brush lasted as long as it did is somewhat surprising. Alas, the company’s history of shutting down projects made this a likely eventuality. For companies like Google, which are only interested in projects that quickly find significant traction, VR remains a difficult sector to enter because the use-cases which can drive mass scale are still limited by the quality and cost of VR hardware.

‘The Walking Dead: Saints & Sinners’ Surpasses $29M in Revenue

Key Data Points:
  • The Walking Dead: Saints & Sinners reached $29 million revenue in just one year
  • In a little over three months, the Quest version of the game sold 10 times better than the Oculus PC version despite being available for one year

Takeaway: Though the VR gaming market is still small compared to the non-VR gaming market, small teams that understand the medium are finding growing success. The Walking Dead: Saints & Sinners comes from a small studio which has been immersed in VR development since the early days, and has found a strong product-market fit. Quest is increasingly becoming a top priority as a target platform for VR content among studios hoping to maximize their customer base.

‘Rec Room’ Now Has Over 1 Million Monthly Active VR Users

Key Data Points:
  • Social VR app Rec Room has surpassed 1 million monthly active VR users, making it one of the most frequently trafficked VR apps thus far
  • Daily active VR users are spending an average of 2.7 hours per day in Rec Room
  • Quest 2 users make up about half of the app’s VR population

Takeaway: Social VR applications which also provide activities for users to partake in (rather than just chat rooms) are emerging as increasingly popular apps, though supporting both VR and non-VR players seems to be a key component to growth. Apps like Rec Room and VRChat have both benefited from that approach, as well as growth powered by a broad increase in digital entertainment in 2020 as a result of Coronavirus lockdowns.

Wave Deprecates VR App to Focus on Broader Distribution of Its Virtual Performances

Key Data Point
  • Wave started out hoping to bring virtual concerts to VR as ‘the future of music’ but has pivoted away from the medium to deliver its productions through traditional screens to reach a wider audience

Takeaway: VR is still far from a mass medium; live-event businesses that require large audience reach won’t find it on VR without either building it themselves through a killer app or waiting several more years for the market to continue to grow. While some VR games have amassed millions of monthly active VR users, such audiences are divided across several content ecosystems and do not easily flow from one app to another.

Out-of-home VR

VR Destination ‘Sandbox VR’ Emerges from Chapter 11 Bankruptcy After Reorganization

Key Data Point:
  • After filing for bankruptcy in August, 2020, the VR arcade company was able to emerge from bankruptcy in December after restructuring $13.6 million in debt

Takeaway: The slowly growing sector of out-of-home VR businesses, like VR attractions & arcades, was hit exceptionally hard by the pandemic. While many traditional businesses have managed to re-open after putting various restrictions in place, out-of-home VR businesses had an understandably difficult time convincing customers to wear headsets on their face that were previously worn by strangers. While Sandbox VR managed to stave off an outright shuttering, many, like The VOID, recognized as a leader in the space, weren’t so lucky.

Notable Investments & Acquisitions

  • Coatsink acquired by Thunderful
    Veteran VR developer acquired in deal worth up to $85 million
  • Varjo – $54 million
    High-end enterprise PC VR headsets
  • Rec Room – $20 million
    Social VR-optional game and creator platform
  • Pimax– $20 million
    Enthusiast PC VR headsets
  • Survios – $16.8 million
    VR game studio
  • Osso VR – $14 million
    VR surgery training software
  • Transfr– $12 million
    VR job training
  • Thirdverse– $8.5 million
    VR game studio
  • CREAL– $7.2 million
    Light-field display tech for VR and AR headsets
  • Kuato – $6 million
    Educational games for VR
  • Arthur Technologies – $2.5 million
    VR office collaboration software
  • Immerse – $1.5 million
    VR language learning platform
  • ForeVR– $1.5 million
    Social VR games

Takeaway: With the pandemic on everybody’s mind, it’s no surprise to see recent investment activity centered around both social VR and VR collaboration & education applications, as lockdowns have highlighted VR’s ability to make distant connections feel more real. In the backdrop we can see investment interest in future VR hardware and technology from the likes of Varjo, CREAL, and Pimax.

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Lhorkan

    What I would like to know most is if 2021 will bring a new PCVR headset. One that offers the same pixel density than the G2, with the tracking quality and controller ergonomics matching the Index, and with FOV at least matching the Index as well. And maybe some wireless streaming for good measure – it’s been 5 years since 2016, after all.

    • Ad

      No. Deca says it will but at the very least the tracking won’t pan out.

    • Lulu Vi Britannia

      Hardware doesn’t get drastic improvements in a single year, for the obvious reason that technology takes time to mature. Asking for a boundary-pushing headset every year is like asking for a PS6 next year, and a PS7 the year after that, and a PS8….

      These things take time, and the fact that Oculus went from CV1 to Quest 2 in only 5 years is already astounding, just like the fact that we got Index only 3 years after Vive.

    • I’d say it’s very likely.

  • NL_VR

    Oh news contains facebook, let med get the popcorns

  • Trekkie

    I also feel that content creation for VR is very hard even for experienced game devs like me. Also tools that worked for the traditional 3D applications don’t translate well to VR.

    We need to rethink this.

  • Ad

    While not fully responsible, it’s likely that the affordable and standalone Quest has taken some of the wind from PSVR’s sails.

    It 100% isn’t. I doubt the top execs at Sony even know what a Quest is. People in VR need to understand how inconsequential VR is to Sony and how irrational they consider wasting anytime on VR right now is.

    The Waltz of the Wizard dev’s statement was just arrogant and pointless. Sony. doesn’t. care. And devs seem to not understand how backwards compatibility on consoles work. A dev told me that not being able to add exclusive content to PS5 patches meant that sony must be making a PSVR2 this year or they’re insane. No, that’s literally just how next gen patches work, same rules for everyone.

    Thanks to a new perspective on VR game design culminating in its latest title, Pistol Whip,

    I was not a fan of that article. Cloudhead is not the first studio to make a “low cognitive load game,” also known as an arcade game. And they’re not scrappy devs finally seeing success, they’re extremely talented, very well connected, well funded, and incredibly ambitious.

    • benz145

      I didn’t mean that Sony was becoming disinterested in VR due to Quest, I meant that PSVR’s slowing sales were probably partly due to people choosing Quest over PSVR.

      Never said Cloudhead was the first to make that kind of game. The “new perspective on VR game design” was new to the studio, not the industry. Their prior games were far different, and they took a very different approach with Pistol Whip.

      I’m either failing to communicate my points clearly, or you are projecting a lot of assumptions onto my words. Honestly I don’t know which it is but I’m happy to hear feedback.

      • Matthew Lake

        I really don’t think there is anything wrong with how you are communicating or your assessment of the situation right now.

        I think Sony are probably looking at Quest 2’s success and it might be making them rethink the direction they go in.

        Standalone VR market is potentially huge… much bigger than the number of consoles Sony sells per generation.

      • Ad

        The first one did sound that way.

        The second one could be me not reading closely enough but the general image of the article seemed to be less the saga of a dev, considering I haven’t seen any explorations of devs who leave VR, and more showing off a success story meant to guide other devs. The use of terms of “low cognitive load” game seemed to be because it was a new insight from a very successful dev and if not it begs the question of why that would be notable if most early VR games were arcade games but only a slim portion have had that success.

  • MosBen

    Are there any consumer VR HMDs that have been announced for release this year? I can’t think of any, but it’s possible that I missed a smaller one. That’s probably not a big sign. There are, after all, plenty of years in which a new console isn’t released, and for a while now the thinking was that the VR refresh rate was somewhere between cell phones and consoles. Still, there really doesn’t seem to be a ton of active competition in the hardware space, and that’s extra true on the mobile VR side, where the Quest basically stands alone.

    • implicator

      There’s the Decagear. I’ll see what reviews say about it myself.

    • 3872Orcs

      HTC is supposedly to have a reveal this year of new headsets.

    • johann jensson

      I hope that Samsung releases an O+ successor this year. After all, the current one is quite old now, and it sold like hot fresh bread… []-)

      (Not in Germany, though. Here people had to import it, because it’s not available at all, LOL…)

  • LastduaL

    The low availability of newer GPUs right now may suppress growth a bit. There’s little sense in upgrading to a higher-resolution headset if you can’t purchase the gfx cards needed to maximize its potential.

    • This is a real problem for PCVR growth; RTX 3XXX cards are almost impossible to purchase due to supply shortages since launch.

      It’s possible to drive the Index and G2 with older cards, but not ideal as it limits frame rate and super resolution, crippling their potential.

      And the supply problem has no end in sight; several prominent UK retailers have 1000’s of paid customer still waiting. After paying in full for RTX 3090 at launch, refunded after 2 months of waiting with no delivery date confirmed.

  • Great collection of articles. I think the only thing missing is a summary of the trends that these news mean for VR in 2021. On my blog I have made some predictions for Virtual Reality in 2021, for instance

    • benz145

      Feel free to link to your piece, Tony!

  • Basically, VR is going from strength to strength, in pretty much every way.

    • Rosko

      Apart from the fact new VR games have fizzled out.

      • There are plenty of new games coming out every week, just not any AAA stuff or anything that’s set the world ablaze very recently. But there were quite a few big name releases last year, some of which were genuinely brilliant, and I expect the same this year too.

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  • Rec Room deserves another like 100M$, they’re doing so much to keep VR entertaining and engaging.

  • wheeler

    I’m hoping we see some demos of next gen VR hardware this year. Not more presentations but journalists actually getting to try stuff. Perhaps early implementations of varifocal, eyetracking that actually works well, or the next big advance in motion controllers. Devs need time to incorporate such advances and design their experiences around them so I’m hoping the next major advancements aren’t too far off.

    New VR users have plenty to keep themselves entertained with and ample “spectacle fuel” to burn through, but as someone that’s been using VR regularly for 5 years the hardware limitations are getting more and more difficult to tolerate. I recall a recent VR developer twitter thread where a bunch of devs collectively admitted to feeling terribly discouraged about peering through their headsets after all of these years but there was no consensus on the reason for it. If I had to guess, I imagine that they’re past the spectacle and what’s left are a variety of comfort issues, fidelity bottlenecks, and input/feedback bottlenecks that are frustrating their experience and productivity. I know I’m pretty obsessed with VR but I confess I’m feeling much of that at this point as well.

  • doug

    2021 should see Starfield (VR) from Bethesda.

  • david vincent


  • Connor MacLeod

    I own a rift CV1 3 yrs now. Its an ok headset for now but my plan is to get an HP reverb 2. With my RX 580 there is no change to play any vr game with this headset. Praying to ronnie dio to get a 6800XT or 3080. Damn shortages