|Juniper found that hardware revenues from VR headsets, peripherals and 360-degree cameras will reach over US$50 billion by 2021, up from an estimated US$5 billion this year.|
The widespread adoption of VR by smartphone users, along with high unit prices commanded by headsets for PCs and consoles, will drive the rapid growth.
"The market will be triggered by the launch of PlayStation VR this October, and Microsoft's Project Scorpio in 2017 - offering compatibility with the Oculus Rift," Juniper states.
"Consoles strike a balance between computing power and cost, providing high-end specs without many of the additional costs, unlike PC VR, and offer a better quality experience than smartphone VR."
While console VR is set to account for over 50 per cent of VR hardware revenues, Juniper expects that it will only make up 27 per cent of shipments.
Meanwhile, Juniper expects a low revenue curve for mobile VR, with smartphone headset costs remaining low - however, more advanced platforms, such as Google Daydream, are projected to produce more moderate revenues in the short term.
While low-cost headsets allow consumers to experience VR, they could potentially abandon it if the experience is poor, which could be problematic for smartphone VR software developers relying on in-app purchases for revenue, Juniper observes.
Juniper additionally notes that the "early market may already have had an impact on PC-based VR content".
"Some of the most popular VR titles are currently priced much lower than traditional AAA games, sometimes as low as half the price," research author Joe Crabtree commented.
"In the several months since the launch of PC-based VR this year, consumer expectations are likely to have changed to expect shorter, cheaper games. When AAA publishers release to PC, they may have trouble selling with traditional AAA prices, while console users have no such habit to break."