UK Consumers are the Most Interested in VR Headsets

Ask any gamer in the United Kingdom what’s topped their Christmas wish list for the past few years and the answer is bound to be a VR headset. Despite this, only 4% of Britons admitted to having access to a VR headset in Q1 2020. The VR market was never projected to be fast-growing though, and back in 2015 Mark Zuckerberg warned consumers that it would be a slow ramp. Fast forwarding to February 2023, and Meta’s stock tanked by more than 26% leading many to believe that Zuckerberg’s fascination with the VR market has contributed to the $230 billion reduction in market cap. Indeed, there are certain places where the VR industry just hasn’t taken off at all.

The Countries Most Interested in VR Headsets

At BanklessTimes.com we carried out a data analytics exercise, with the help of Google Keyword Planner, to highlight the variations in searches for virtual reality headsets across the globe. We charted the average number of searches per 100,000 people of the population, and also looked at the growth in searches between December 2022 and January 2023.

While almost every country has shown a decline in searches for VR headsets in the first month of the year, we can attribute at least some of this to a natural slowdown after December’s Christmas shopping spree. It may be too hasty to put it all down to seasonality though, and there are some signs that the market perceives the need for a boost, because at the beginning of March 2023 Meta cut their prices, by more than $500 in some instances, in a bit to drive more uptake.

1. England

575 VR searches per 100,000 people

England has the fastest growing market in Europe when it comes to AR and VR. It is expected that there will be a 78.3% growth in spending between 2019 and 2024, with the UK’s VR entertainment market projected to be worth £294 million by the year end of 2023.

2. Australia

568 VR searches per 100,000 people

Australians are also embracing VR, with the next highest number of searches per 100,000 of the population. Aussies are pioneering in their use of VR with 19% of people using it to choose a holiday destination, while ecommerce, automotive and fashion are reported to be the industries that most benefit from the use of VR Down Under.

3. Ireland

518 VR Searches per 100,000 people

In 2022, 17% of Irish Gen Z’s between 18-24 owned a VR headset, while 57% in the same age group knew something about the metaverse. With Ireland being home to some popular VR start-ups, including Vrai and Immersive VR Education, it makes sense that the technology is not unheard of in the Emerald Isle. One in four of the survey respondents felt that the costs of VR were prohibitive, but perhaps the recent price drops will begin to remove barriers to entry.

The Countries Spending the Most on VR

The global VR market was valued at $11.52 billion in 2019 and is on course to be worth $87.97 billion by 2025. Although we know that UK consumers are most likely to be searching Google for VR headsets, which countries worldwide are actually spending the most money on VR:

1. China

In 2020, China led the world spending $5.8 billion on VR and accounting for 38.3% of the market share. The IDC have predicted that China’s market share will decline to around 36% by 2024, but China is nonetheless at the forefront in the adoption of new VR technology, thanks in part to it being the home of many VR manufactures, such as DPVR, which alone produces 6% of all VR headsets. As part of the government’s “Made in China 2025” strategy VR is even being adopted for use in Chinese classrooms.

2. The United States

The United States is home to Meta which ships 75% of all headsets and has a market share of 78% in the VR gaming market. It is not therefore unexpected that the United States is a very close second to China, with its consumers spending $5.1billion on VR. America is in fact projected to overtake China and become the top consumer of VR products by the end of 2025, with a calculated annual growth rate (CAGR) of 75.1%.

3. Western Europe

While we don’t have the figures by individual countries, we do know that Western Europe collectively spent $3.3 billion on VR goods in 2020. In the future, VR applications in healthcare will have the biggest impact in the United Kingdom, adding $17.7bn to the economy, whereas Germany will reap the largest benefits from VR/AR with product and service developments worth $27.1bn by 2030.

The Countries Where the Highest Funded VR Companies are based

It’s interesting to see where the companies that have received the most funding are situated, and it should come as no surprise that the top four most funded VR companies in the world are all to be found in the United States. The fifth company is “Improbable”, a London based technology company that offers virtual gaming experiences. With a reported $704 million in investments, including from Andreesen Horowitz and Metaverse, they are definitely one to watch.

Focusing on the top three:

1. Meta

California, USA

$26.1 Billion

When Meta acquired Oculus VR in 2014, this cemented their status as leaders in the VR market. Now Meta invests an annual $10B into AR, VR and Horizon each year, and despite losses growing significantly in 2023, Zuckerberg told investors that they shouldn’t expect to see pay offs until the end of the decade.

2. Magic Leap

Florida, USA

$3.5 Billion

Magic Leap creates wearable Virtual Reality technology that superimposes 3D images over real world objects. The company has received over $3.5 billion in investments and in its last set of accounts revealed a recent boost of an additional $500 million in funding, which is astonishing considering that the company nearly went bust in 2020. With the new “Magic Leap 2” headset officially released in September 2022, it will be interesting to see how they fare this year.

3. Unity Technologies

California, USA

£1.3billion

Another Silicon Valley firm features in our top three. Unity Technologies is a company that creates real time 3D content (RT3D) and while best known as the creators of Pokémon Go, they were also named the World’s Most Innovative VR Company in 2023 for their work with the Vancouver Airport Authority and Orlando Economic Partnership. Notable investors in the company include Sequoia Capital, Silver Lake and Thrive Capital.

Jonathan Merry, CEO of Bankless Times, believes that the data offers an interesting insight into how the VR industry is viewed globally.

In the United States, we’ve seen not only a sharp drop in search volumes over the two month period, but also an apparent struggle for survival, with the world’s highest funded VR companies scrambling to justify losses to their investors, and Magic Leap at one point on the brink of bankruptcy. On the other side of the coin, in the United Kingdom it seems that the VR industry is really beginning to take off and has a lot of momentum. We have the highest number of searches per capita, new and interesting start-ups like ‘Improbable’ which are taking the tech world by storm, and a real prospect of VR integration benefitting our health service and wider economy. It will certainly be interesting to see where VR takes us over the next five years.

Jonathan Merry, CEO of BanklessTimes.com