IDC: XR market down 21% in 2022, Meta leads VR segment, Nreal leads AR segment

March 08, 2023

2022 was a tough year for the AR/VR market as global shipments for the full year fell sharply to 8.8 million units — down 20.9% from 2021, according to data from IDC. Analysts say the drop was expected as this is a young market and certain global events are having a massive impact on it (both positive and negative).

In 2021, the pandemic had left many people stuck at home on disposable money, which was an opportunity for VR and AR headset makers. It also helped that the rising prices for electronics components and logistics hadn’t hit full force yet, so Meta Quest 2 still cost $300 – that price rose to $400 last year (note: this applies to the 128GB model, the 256GB was $500 (but the price was reduced to $430 a few days ago).

The metaquest 2

Right now there’s a pretty strong division between headsets that can do VR and headsets that can do AR. There are also some “mixed reality” headsets that can combine AR and VR. These so-called “XR” headsets include the Meta Quest Pro and HTC Vive XR Elite, which cost $1,000 and $1,100 respectively, which is significantly more than headsets that focus on one or the other.

Meta holds around 80% of the total VR/AR market, while ByteDance (yes, the company behind TikTok) is second at 10% after acquiring Pico. The other companies in the top 5 are DPVR, HTC, and iQIYI. Sony launched its new PSVR 2 headset last month and the company claims there won’t be any delivery issues, so we’ll see how much of the VR market it can capture.

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The market for pure AR glasses is completely different – Nreal dominates there with almost 100,000 deliveries last year. Here are the top 5 AR glasses:

1. Nreal – 98,000 2. Microsoft – 35,000 3. Rokid – 30,000 4. TCL – almost 30,000 5. Epson – 13,000

Note that Nreal ranked sixth in the overall VR/AR market, which is currently mostly focused on VR.

“While Meta and ByteDance are making their mark in VR, Nreal has slowly expanded its presence by appealing to mobile gamers,” said Jitesh Ubrani, Research Manager, Mobility and Consumer Device Trackers at IDC. “Although AR and VR are still in their infancy, Meta has been able to gain a competitive advantage through its diverse first- and third-party content. This is where other players like Sony and possibly Apple can offer significant competition, although in the long run this will put pressure on others like ByteDance and Nreal.”

Nreal’s offerings include the Air AR glasses, which are currently available on Amazon for $380. These are fairly light and look very similar to regular sunglasses. The Air features a 3,840 x 1,080 pixel OLED display and produces an image equivalent to a 130-inch display at 4m/13ft (46° FOV with 49 pixels per degree).

Nreal Air AR Goggles

The Nreal Air offloads the processing to an external device – you can use it for gaming on the go with a Nintendo Switch or a Valve Steam deck. Alternatively, they can be an additional display for a PS5 or Xbox Series X at home.

They also work with Android phones via the Nebula app, and there’s a beta version for Macs that uses the glasses’ 6DoF tracking to create multiple virtual displays around the wearer.

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The Nreal Air AR glasses can be used for gaming, video streaming and as multiple virtual monitors

“At Nreal, we’re proud to have been at the forefront of driving innovation and growth in the AR industry by developing AR glasses that represent the next generation of computer interfaces,” said Chi Xu, Founder and CEO from Nreal. “Our mission has always been to create AR technology that is easy to use and intuitive, and we look forward to continuing to drive innovation in the AR industry as we redefine how people live, work and play.”