Virtual reality gained impressive ground in 2020, a recent PwC study finds. Global VR content revenues reportedly increased by around 30% year-over-year, beating out film, traditional video games, and music.

As reported by Protocol, VR’s global content revenue is estimated to be around $1.8 billion, or 31.7% more than in 2019—making it the fastest-growing media segment last year. All major entertainment and media types were taken into account, including the worst performers in 2020: traditional print and broadcast television.

The study, which provides projections out to 2025, comes from PricewaterhouseCoopers (PwC), one of the world’s largest professional services network alongside ‘Big Four’ firms Deloitte, Ernst & Young, and KPMG.

PwC’s Global Entertainment & Media Outlook 2021–2025, Omdia | Image courtesy PwC

They’re impressive numbers, however PwC maintains consumer adoption of VR was slower than expected, which has made the industry increase its focus on the enterprise and commercial sector. Some media types are also expected to take a temporary hit in the near-term due to a return to normalcy after the COVID-19 pandemic, however PwC projects that VR will still be the fastest-rising entertainment and media segment between now and 2025, with revenues projected to rise at a 30.3% compound annual growth rate (CAGR) to $6.9 billion.

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PwC says one of the biggest drivers of VR content revenue growth in 2020 was games, and it’s likely to stay that way moving forward. The study projects VR video is also on the move upwards though, estimating that its global revenue of $615 million in 2020 will expand to $1.4 billion by 2025.

All things considered, that’s pretty small in the grand scheme of things. For comparison, PwC says subscription video on-demand accounts for around $50 billion in 2020; as Protocol notes, PC and casual gaming is expected balloon to $194.7 billion in annual revenue by 2025.

PwC’s Global Entertainment & Media Outlook 2021–2025, Omdia | Image courtesy PwC

PwC also provides a breakdown of headset type, and how they may grow in adoption in the future. Mobile VR headsets, which require smartphones to drive graphics, are well on their way out as standalone and “home VR headsets” continue as preferred VR devices. That last category likely includes both PC VR headsets (Valve’s Index, HTC Vive, etc) and console headsets (PlayStation VR).

Like Facebook, PwC seems to have a lot of confidence it the growth potential of standalone VR headsets in the coming years. If it wasn’t already apparent, that may give developers some indication on where things are headed, and which platforms might be worth targeting to capture the largest potential install base.

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Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 3,500 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • I work for an industrial training company that produces VR training content. We are booming at the moment. While you are all focused on the $90 billion per year Games Industry, we’re over here in the $170 billion per year Industrial Training econosphere laughing at your “games”.

    • True story

    • Except games are fun.

      And you’re dying inside.

      • Actually I freaking love my job. I work from home, I build 3D models of giant machines and make animations of all the terrible things you’re not supposed to do with them. My company is amazing, they’ve been around for 30 years and my pay is way higher than if I was doing games. And the benefits? Don’t get me started. I work with my wife and dogs around me all day and take my breaks next to my pond in my back yard. Tell me again how I’m dying inside?

        • Good for you.

          I’d still pick making games any day of the week.

          Keep building those models.

        • jiink

          New dream job discovered!

    • NL_VR

      Good for you but whos laughing at who now? :)

      • Actually everyone is still laughing at you, spam-man.

  • Very interesting stats!

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    If Home includes consoles then it doesn’t seem to be counting the PSVR headsets according to the graph.

  • Christian Schildwaechter

    From the report:

    Virtual reality (VR) was the fastest-growing segment covered by the Outlook in 2020, with revenue of US$1.8bn, up 31.7% from 2019, albeit off a very low base. VR will also be the fastest-rising E&M segment over the forecast period, with revenues rising at a 30.3% CAGR to US$6.9bn in 2025 (see chart on page 16). In 2020, sales of headsets increased along with engagement with existing ones. According to Steam’s PC user survey data, the release of the much-anticipated Half Life: Alyx caused a spike in the number of Steam users with VR headsets. The sector got a further boost with the launch of a competitively priced (US$299) Oculus Quest 2 headset at the end of 2020.

    [Emphasis mine. Relative numbers require a base, one time effects (HL:A, Quest 2) distort trends. If you start a company and hire an assistant the second year, your company size grew by 100%. That doesn’t mean you are doing better than Facebook.]

    While I do not doubt the increase, I am somewhat surprised by their estimate that global video game revenue only rose by 6.6% in 2020 to about USD 150bn (83 times VR), while according to IDC it grew by about 20% to USB 160bn (89 times VR). The German Games Industry Association estimated that the German gaming marked grew by 36%.

    I am always a little irritated by the rather obvious cherry picking when VR market data are reported. There are a number of sources, often with widely varying estimates, and it is not enough to pick the one that makes the prettiest headlines. Yes, VR grew a lot in 2020, but not necessarily faster than the whole gaming market, so the percentage of gamers playing in VR didn’t rise anywhere near 30%. The real growth/revenue winner is mobile, with 2.69bn people now playing games on mobile, 85% of which do not consider themselves gamers. 50% of these are older then 34 years, almost 1/3rd are older than 45, 51% are female, and all these mobile gamers generated about USD 88bn (49 times VR) revenue in 2020.

    [EDIT: fixed PwC estimate for global gaming market revenue, was referencing the wrong year]

    • Kevin White

      It’s kind of like the double-digit growth in vinyl for music and in film for photography. Still tiny tiny percentages of all the music consumed / bought or photos taken / published.

  • But VR is just a gimmick, has failed to deliver on the early promisies and hype, isn’t growing fast enough, and is going to be dead soon–right?

  • johann jensson

    Not surprising. I wish i had some money to invest, but well…