Metaverse vs MMO Gaming: What will metaverse add to existing landscape

The metaverse has become a buzzword for many areas of the technology landscape. But many aspects of the metaverse are not new for the world of online gaming. It has been using the metaverse concepts of digital connectivity and interaction for years, going back to online chatrooms in the early 2000s, and more recently through massive multiplayer online games (MMOs). All this has created the starting point for Big Tech to take the metaverse to new areas through developing various software designs, but it needs to start from the hardware to access this new ‘world’. Meta – formerly known as Facebook – has been the most popular in marketing the concept of the metaverse and has had significant success in developing the initial hardware. Other companies are expected to jump on the metaverse hardware bandwagon, a highly anticipated entrant being Apple with their development of a VR headset.

What is MMO gaming?

MMO gaming often involves open-world games where your character can interact with many people globally within a set world to complete tasks and can communicate with others through audio or text-based communication. MMOs are not restricted to PC gaming. Microsoft and Sony have MMO games like Call of Duty available through their consoles. The first MMO, Neverwinter Nights, came out in 1991 using AOL for text-based communication with other players. MMO games have created mass followings, some of the most popular being RuneScape, World of Warcraft and The Elder Scrolls. The concept of MMO has become so popular that companies are now starting to incorporate successful authors and directors to help make these games as complex and riveting as possible. The newest and most popular game here is Elden Ring, which has George R. R. Martin (author of the global sensation Game of Thrones) writing the storyline.

What metaverse gaming offers and how the VR market will look because of it

MMOs follow a storyline and have set goals and tasks for players to work towards within the confines of the story even though they are open world. Metaverse gaming offers a more immersive experience where there are no confines of the typical gaming story progression. As the games themselves evolve, so does the hardware required to interact within these games in the most immersive way possible.

Metaverse gaming has been developed with the idea that VR headsets would be the prime mode of interaction. Meta developed its standalone Quest VR headset series to drive Metaverse gaming outside of the existing hardware confines of gaming – PCs, consoles and smartphones. In Q4 2021, standalone VR headsets contributed to over 90% of total VR headset shipments globally (mostly Quest 2). This disparity between shipments of tethered and standalone headsets will reduce in future as console hegemons Sony and Microsoft release tethered headsets for their existing consoles.

Sony plans to release its new headset PlayStation VR2 by the end of 2022 but with the ongoing supply chain issues the OEM is facing, it is unlikely to release the device until 2023. Sony has announced that 20 games will be released by both first- and third-party developers with the headset. The games Sony releases with this headset will determine its success, as customers interested only in VR headsets will be more inclined to opt for Meta’s products, which are already on the market. Potential customers for Sony’s PlayStation VR2 will be those who already have a PlayStation console as well as those interested in the game titles that they cannot get with Meta. Many games have not been included on the Meta gaming platform as it needs to be connected to a Facebook account. At Counterpoint, we believe that that the VR standalone will greatly overtake other XR and reach almost 40M by 2025.

XR forecast 2025

Metaverse gaming will not replace MMO and other existing forms

Even as metaverse gaming experiences an uptick with the release of new hardware and games, the popularity of MMOs will continue to see a wider fan base. PC MMO gaming is easily accessible through the existing platforms like STEAM, Xbox Game Pass, Google Stadia, Amazon Luna and other streaming-type platforms that have a wide variety of games that can reach anyone with a decent computer processor. MMOs on mobiles also create a new base of players who do not need to purchase a secondary device to access these games. At the same time, consoles continue to see record sales, with the PS5 and Xbox Series X still experiencing shortages two years after their release, thanks to the high demand combined with the lingering effects of the chipset shortages triggered by the COVID-19 pandemic.

XR (VR/AR) Headset Shipments to Grow 10 Times to Cross 100 Million Units by 2025

London, San Diego, New Delhi, Beijing, Buenos Aires, Seoul, Hong Kong – January 5, 2022

Extended Reality (XR) headset shipments are projected to grow about 10 times from 11 million units in 2021 to 105 million in 2025, according to the latest Counterpoint Global XR (VR/AR) Forecast. The adoption of Virtual Reality (VR) headsets gained pace in 2020 and 2021, thanks primarily to the good performance of the Oculus Quest 2 in the consumer segment and DPVR and Pico in the enterprise segment. We believe XR headset volumes will start picking up significantly in 2022, as it will be the biggest year for new XR product launches, with offerings from the Oculus Quest series, Sony PlayStation VR2 and the most awaited Apple AR glasses. Oculus and Sony have created a strong demand for their devices and built a good user base for upgrades, while Apple has a strong history of gaining volumes in a new category.

Commenting on the market dynamics, Senior Analyst Karn Chauhan said, “VR Standalone has become the device type of choice in the gaming segment primarily due to the success of Oculus’s Quest 2. The wireless form factor is the future for XR headsets. VR Standalone devices are being favored over VR Tethered devices by OEMs and consumers, making the latter a relatively slow-growing form factor. Augmented Reality (AR) has been a small segment since 2016, mainly serving the enterprise segment with high-spec and high-price products. This is unlikely to change in the immediate future. However, with Apple expected to enter the AR Tethered segment, we expect it to become the fastest growing and the second biggest form factor by 2025. This will catalyze the participation of many other brands, especially smartphone OEMs.”

Commenting on the regional performance, Senior Analyst Harmeet Singh Walia said, “North America will remain the biggest XR market, given the size and advancement of its consumer and enterprise users. This demand will be fulfilled by the biggest XR brands of the day such as Oculus and highly anticipated new entrants like Apple. On the other hand, Europe, despite being a major XR market at the moment given the size of its middle class, is expected to see relatively slow growth due to content limitations that are exacerbated by a lack of common language. The fastest growth, therefore, is expected in China, which will benefit from having adopted 5G early and having a common language that makes content creation easy. Some of its demand will be fulfilled by existing OEMs like DPVR and Pico and by major Chinese smartphone OEMs that will follow Apple into the XR segment within the first half of this decade.”

Metaverse, recently the most hyped term on the internet, made industry players interested in it and pushed them to start developing something around it. Metaverse can be a catalyst for the increase in XR volumes in the coming years, as XR devices are the main interface for Metaverse.



Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.


Analyst Contacts:

Peter Richardson

Karn Chauhan

Harmeet Singh Walia

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Oculus Quest 2 Cumulative Sales Hit Record 4.6 mn as XR Headset Shipments Almost Triple YoY in Q1 2021

London, San Diego, New Delhi, Beijing, Buenos Aires, Seoul, Hong Kong – July 14, 2021

The Extended Reality (XR) headset shipments almost tripled annually in Q1 2021, according to the latest research from Counterpoint’s Global XR (VR & AR) Model Tracker. The Oculus Quest 2 success drove these volumes. Offering great hardware at a reasonable price, Oculus kept improving the performance of the Quest 2 with regular software updates, while growing user engagement. Till Q1 2021, the Quest 2 had shipped a cumulative 4.6 million headsets, a record for any single model.

Commenting on the market dynamics, Senior Analyst Karn Chauhan said, “The standalone Virtual Reality (VR) form factor led the global XR market with 85% shipment share in Q1 2021, compared to 42% in Q1 2020. The transition from tethered to standalone VR is being driven mainly by the Quest series. Other XR headset OEMs are also focusing on the standalone form factor as it is the device of choice among users, especially gamers. The Augmented Reality (AR) segment contributed only 4% in Q1 2021, which was driven by the few enterprise-level deals with AR headset OEMs. The AR consumer segment is still in a nascent stage as most of the compelling use cases are being satisfied by mobile AR. There is also a lack of disruptive mass-market or even mainstream AR headsets.”

Commenting on brand performance, Senior Analyst Harmeet Singh Walia said, “Oculus captured a record 75% share of global XR shipments in Q1 2021 as compared to 34% in Q1 2020, thanks to the continued success of the Quest 2. Chinese brand DPVR climbed to the second position for the first time by keeping its focus on the enterprise and education segment. With no successor of PlayStation VR, Sony fell to the number three spot for the first time since 2016. Pico and Valve took the fourth and fifth spots respectively while HTC, with its focus increasingly limited to the niche enterprise segment, slipped to the sixth position.

Given few new launches planned for 2021 by major players, the Oculus Quest 2 will reign unchallenged. It has now established itself as the leading player in the XR segment, especially gaming, and is unlikely to be replaced in the near future despite increasing competition. The Quest 2 offers a great experience in the wireless form factor, giving it an edge over competitors. However, the competition in this segment will also increase in the coming years with Sony likely to move into it.

While there are many enterprise and industrial use cases for XR currently available and in development, growth in this segment is slower than expected in some areas. The industrial use cases that have greater potential include field force support, education, training, media and many more. We can, therefore, expect a steadily increasing, even if slow, trend towards enterprises and other organizations investing more in the development and use of XR devices and services, especially after 2025.

Players including Microsoft, Varjo and HTC have been taking a wider enterprise-level approach to target this low-volume, high-ASP segment. A lighter, power-efficient and longer battery life version of Microsoft’s HoloLens offered under $1,000, combined with its strong base in major economies, has the potential to make Microsoft a major player in the consumer segment as well. But we do not expect Microsoft to launch such a device in the first half of this decade.

We believe that XR will continue to experience double-digit growth for the next four years. Apple’s entry will likely catalyze the participation of several other brands, especially the Chinese smartphone OEMs that are also present in the smartwatch segment. 


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Peter Richardson

Karn Chauhan

Harmeet Singh Walia

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Oculus Captures Half of XR Headset Market in 2020

London, San Diego, New Delhi, Beijing, Buenos Aires, Seoul, Hong Kong – March 10, 2021

The Extended Reality (XR) headset shipments in 2020 declined 9% YoY, according to the latest research from Counterpoint’s Global XR Model Tracker. The decline was less than expected thanks to the Oculus Quest 2 performance during the holiday season. As a result, Oculus captured 53% of the XR market in 2020 as compared to 44% in 2019. The improved specs, like increased memory, larger battery life, and higher resolution and refresh rate, at an affordable price point were the clear drivers. The pandemic-triggered lockdowns also had a role here, pushing people to invest in content for entertainment and gaming, especially during the second half of 2020.

Commenting on the market dynamics, Research Director Peter Richardson said, “Virtual Reality (VR) headsets captured more than 90% of the total XR shipments. The adoption of VR, mainly for standalone form-factor, is increasing, as the industry is showing significant advancements in design, specifications and features at reasonable prices. Additionally, the availability of good quality content across platforms is growing. The users of VR are limited to the gaming community, but enterprise users from the education and training sector gained some interest during the pandemic.”Counterpoint Research Global Top 5 XR (AR/VR) brands share 2020

Commenting on brand performance, Senior Analyst Karn Chauhan said, “With a strong supply chain and brand value in the gaming segment, Oculus remained the biggest XR brand throughout 2020 by capturing half of the shipments. Sony grabbed the second spot riding on its strong PlayStation user base who went in for the five-year-old PlayStation VR. HTC, DPVR and Pico took the third, fourth and fifth spots, respectively. Enterprise-level sales deals, like for schools and training centres, helped Chinese players to grow in 2020.”

Counterpoint Research global top 5 XR (AR/VR) headsets share 2020

Oculus also dominated the list of top five XR devices. Three headsets in the list were from Oculus. However, the competition in this segment will increase in the coming years. One of the reasons this segment doesn’t witness new launches as frequently as some other categories is that it is more dependent on latest innovations in the overall component and supply chain, especially from the form-factor, display, power and sensor perspective. But the segment holds a big potential in the coming decade, as players like Apple and Sony (PSVR 2) will enter or scale up in this segment.

There are many current and potential enterprise and industrial use cases for XR. These include field force support, product design and development, construction and fabrication, manufacturing, logistics, education and training, media, healthcare and many more. We can, therefore, expect a steadily increasing trend towards enterprises and other organizations investing more in the development and use of XR devices and services.

Some players like Microsoft and Varjo have been taking a wider enterprise-level approach to target this segment. Microsoft now aims to enjoy wider adoption in the fast-growing consumer segment. This combined with Microsoft’s strong bases in major economies, which are the biggest enterprise-level consumers of XR devices and are likely to be the biggest consumer-segment buyers too, ensures the company’s continued growth in the XR industry.

XR’s consumer use can be subdivided into VR and AR. For VR devices, the strongest use case is gaming, although social interaction will provide an interesting niche. Consumer use of AR has thus far largely been confined to smartphone displays via applications.

We believe that XR will continue to show in double digit for the next five years.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Peter Richardson

Karn Chauhan

Harmeet Singh Walia

Follow Counterpoint Research

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Oculus Quest 2 Review – The Quest for Perfection Continues

Oculus launched the second generation Quest standalone VR device, Quest 2, on September 16th. Its price is attractive, starting at $299 for the 64GB model ($399 for the 256GB version). The product finally shipped on October 13th. I (and especially my two boys) have been trying the Oculus Quest 2 for a few weeks and here is the review.

Full disclosure up-front, I have been a VR skeptic. Not because I don’t ‘get’ the concept of VR, I do, but I struggle to see how it fits into the current technology landscape beyond a variation on gaming and for valuable, but niche, industrial and enterprise use cases. I have been waiting for the day I can start recommending VR to friends, family, and business users for a whole range of use cases. Many years ago, I read Ready Player One and loved the alternate world concepts that author Ernest Cline brought vividly to life. So, does the Oculus Quest 2 change my level of skepticism and make me believe that we’re on the verge of a new dawn of VR growth? Hmm, no, not yet, but it does move the game forward quite substantially.

First Impressions – Pixels in the Frame

While I was not expecting any miraculous improvement in optical quality over the previous generation devices, the resolution is still disappointing. When deeply involved in a game, you tend not to notice, but when using the inbuilt browser to watch YouTube videos, for example, the pixel net is clearly visible; and fine details are lost in the haze of low-resolution imaging. Netflix is available as an Oculus app but you’d have to be crazy to watch a movie in such low resolution.

In a world where pixels have become almost invisible – on the screen of the PC that I am typing this on, my smartphone display, even my seven-year-old TV – it’s almost impossible to see the pixels…unless you put a magnifying glass to the display and get really close to it. That’s effectively what happens with VR headsets. The Quest 2 is objectively better than the previous generation Quest, and other standalone headsets I’ve tried, but don’t expect true immersive reality. If you want to get some idea what it’s like, try watching a YouTube video on a large PC display at 240p resolution. High-definition it is not.

The only VR headset where I’ve not been acutely aware of the pixel net has been the Varjo VR- and XR-series devices. However, these are powerful PC-driven devices, optimized for enterprise use and that cost thousands of dollars.

Display – Greys, Flares, and Faster Refresh 

While the resolution of the display has improved over the first generation Quest (see table below), Oculus has opted for an LCD panel rather than the OLED used in the first-generation model. This means that blacks are less, well, black, and more of a grey. Again, in gameplay situations, it’s not that big of a deal, but you do notice the general grey-ish hue.

The Fresnel lenses are the same as on the first-gen Quest. They work quite well, but you do notice some flaring and fringing around the edges of bright points. This is likely impossible to avoid while using Fresnel lenses. Again, it’s not too much of an issue in the gameplay, but it adds to the overall sense of relatively low optical quality. Some might say I’m being harsh, but I’m just saying it how it is. In a high-definition world, it is unusual to experience low-definition, unless something is wrong somewhere.

Oculus has improved the frame rate from 72Hz to 90Hz. However, for now, this is experimental and only applies to very limited situations such as the main menu area. Currently, it has to be enabled in settings, which necessitates a restart. This will become standard out-of-the-box at some point and Oculus has promised that more and more content will be rolled out that will take advantage of the faster frame rate, but it’s unclear exactly when this will occur. And as games and other content are modified to take advantage of the higher refresh rates, any content that is already downloaded will need to be updated.

Counterpoint Research Oculus Quest 2 Specifications

IPD – Three Chances to Get it Right

Setting the inter-pupillary distance (IPD) is important for a good VR experience. If incorrectly set it can be a factor in causing motion-sickness. Where the original Quest offered continuous IPD adjustment between 58-72mm, Quest 2 has three pre-set distances at 58mm, 63mm, and 68mm. There is little guidance to help you get it set correctly, which seems a bit odd considering its importance. And the adjustment is done by manually pulling the lenses apart. There’s a small indicator with the numbers 1, 2, or 3, corresponding with the various positions. If your IPD falls outside of the upper and lower limits, too bad. But also if your optimum position is between any of the presets, well, that’s too bad as well. Fortunately, for me, the middle setting is about right, while for my sons and my wife, the narrower, position 1, seems to work okay.

Head-Strap Hassle

The head strap is a flimsy elastic item that doesn’t do a great job of distributing weight comfortably. It is tricky to adjust, but needs adjusting every time the headset is put on. The Premium head strap is better, but costs an additional $49 (a strap with an additional battery is also available but costs $129) the premium strap is likely better, unless you wear glasses, when it can be difficult to get the headset on without smudging or squashing your glasses. Incidentally, for glasses wearers, the standard pack includes a small spacer to improve the fit. The headset is around 70g lighter than the original Quest, but we think most of the reduced weight comes from the flimsier strap, so the weight as experienced by the user is not much different.

Sound emanates from the harder portion of the strap next to the ears. It’s adequate for most purposes but suffers a lot a sound leakage. For a more immersive experience, there is a 3.5mm jack socket into which wired headphones can be plugged. A Bluetooth option would have been good as fewer and fewer wired headsets are available.

Controllers – Hands-on

The hand controllers are decent with halo style loops that include IR beacons for hand tracking. They are slippery to hold though and need the string loops to secure them to a wrist; should one escape your grasp during vigorous gameplay, it won’t fly across the room. Some reviewers have complained of relative inaccuracy in tracking the controller’s movements. I have not noticed anything unusual, but I may not be sensitive to the small degrees of variation others have reported. Each controller is powered by a single AA battery. I don’t know how long they last, but as both controllers are still showing 100%, I am guessing it could be quite a while.

XR2 in the driving seat

The Quest 2 brings many improvements in hardware over the original device. Quest 2 is the first device to ship with Qualcomm’s application-specific Snapdragon XR2 platform – the original Quest was based on the Snapdragon 835, which was already around a year old when the first Quest device was launched.

While the XR2 was positioned by Qualcomm as 5G-ready, the Quest 2 has no cellular connectivity option – only WiFi. However, it does benefit from enhanced graphics, resolution, and AI performance. The XR2 can support up to seven concurrent camera feeds and a dedicated computer vision processor. The platform also supports low-latency video pass-through. This can be appreciated particularly when setting up a gameplay area. With the headset on, the user is asked to mark out an area in which gameplay can take place. This is done by using one of the controllers to ‘paint’ the edge of the game area. This is much better than IR beacons. The headset ‘remembers’ several gameplay areas and will also ‘see’ if an object is obstructing some part of the gameplay area and highlight it for moving out of the way. The video pass-through is shown in stark monochrome, but it’s surprisingly effective.

Set-up and Getting the Action Started – Face it, you need Facebook

The initial set-up was easy. You start by downloading an app to a partner smartphone. Then identify the particular headset (Oculus Quest 2), enter a code from the headset, and follow the set-up instructions. It takes a few minutes and you’re ready to go. However, it should be noted that it’s impossible to get started without a partner smartphone. And it’s impossible to get started without a Facebook account. This last point seems minor – but it’s not. There are many gamers for whom Facebook is anathema and the shift of all Oculus properties to being linked to a Facebook account therefore renders all Oculus products beyond redemption. Facebook is held in such suspicion that many potential users swear they will never use Oculus products…ever. Facebook’s interest in Oculus and VR is beyond the scope of this review. We will discuss it in a separate research report.

Main Menu – Home Hub

The main menu is one of a series of attractive ‘home’ environments with a console that acts as the jumping-off point for games and other content. The settings menu can also be launched from here, together with a browser. The OS is built on a forked version of Android and works smoothly.

There is a useful training app that helps new users become accustomed to most actions they’ll need to use such as grasping virtual objects.

Content and Games

There is some free content available – particularly video — and a few games. The most engaging free game is Echo VR, which is a bit like zero gravity ultimate frisbee. It provides a good demonstration of what VR can currently offer. However, almost all other games need to be purchased and they’re expensive – most costing $20 to $30 or more. And the number of games available seems modest currently – at least in terms of ones that you would want to play. However, more are in the pipeline including Assassin’s Creed and Splinter Cell. And if the Quest game library offers too little to interest, it is possible to hook-up the Quest 2 to a PC via an optional ($79) Oculus Link cable. This then allows the headset to slave off a PC and to play more demanding games. Using this route users can also access Steam VR’s library of game titles.

One of the complaints reviewers cite most often regarding the current crop of games is the rapidity of gameplay; the story of a game playing out in as few as three hours. Many games do have good re-playability, but the high entry cost highlights the fact that there are relatively few users  to amortize the costs of authoring the games or adapting them from other platforms.

Beat Saber is among the most recommended and provides a decent challenge. My sons, and my wife – who is far away from a typical gamer – were able to rapidly get engaged and enjoy the game.

Counterpoint Oculus Quest 2 Beat Saber Gameplay

My younger son has been enjoying playing Population: One, in which he is teamed with other users from around the world, who then play collaboratively. It’s a Battle Royale-style game with the unique attribute of being able to climb vertical structures and jump off by spreading your arms and gliding as though wearing a wingsuit.

Counterpoint Oculus Quest 2 Population: One Gameplay

The app on the phone can be used to provide a third-person view of the game action taking place inside the headset. The resolution is even lower than the headset itself but does allow several people to enjoy the gaming action with a single headset.

Other content that’s readily available is video from Oculus TV. Most video content is of the 360-degree type. It’s okay but suffers from the low-resolution issue. And if there is fast motion in the video it can appear jerky – for example watching a skier traverse down a mountain at speed.

Most content developed for Oculus Quest and even Oculus Go should be playable, but it’s worth checking before upgrading to Quest 2.

Battery life is around two hours of continuous gameplay. It’s not a lot, but more than enough for one person. However, if the headset were being passed around between a few players, the battery may give up before the players do.


I am likely not the target market for the Quest 2, so I asked my teenage sons (17 and 14 years of age) if they were ready to swap their PC gaming environments for the Quest 2 (we have not tried the Oculus Link to heavier games). They both looked at me incredulously. And both made similar sorts of comments: my elder son said the Quest 2 was fun as far as it went, but he thought it gimmicky. However, he did say it was better than mobile gaming. My younger son said he sees it more like Nintendo’s Switch; a device that’s more powerful and immersive than mobile games, but one you can use anywhere. However, he also pointed out that the Switch benefits from a host of first party and third party games that Quest 2 doesn’t yet have.

The low starting price of Quest 2 is likely to be its strongest attraction. It is a capable device and will allow new users to get into VR with a relatively low investment. Tech-savvy gamers are likely to be put off by the Facebook-ization of the Oculus environment. But there are many potential consumers who won’t care or who won’t think about the ramifications of Facebook gathering all your VR usage data and more.

We expect Oculus 2, despite its various shortcomings, to do very well during this holiday season and will likely outsell its predecessor products by a sizable margin.

Oculus to Bring Lifelike Immersion to Mass Market

  • With the launch of Quest 2, Facebook continues the shift in its VR focus to the standalone type of headset design, combining the Oculus Link technology for consistent PC VR gaming experiences.
  • Oculus Quest platform alone had generated over $150 million in content revenue.
  • With a starting price of $299, Quest 2 is expected to outpace its predecessor and contribute millions of sales.

On September 16, Facebook launched the second generation of Oculus Quest. The new standalone VR headset is powered by the Qualcomm Snapdragon XR2 platform, which is dedicated to creating ultimate VR experiences. It makes a significant leap in computing performance across CPU, GPU and AI capabilities. Compared to its predecessor, the Oculus Quest 2 comes with a Fast-Switch LCD Display, supporting up to 90Hz display refresh rate and 50% more pixels, a redesigned 6-DoF touch controller, and a 256GB onboard storage option.

Exhibit 1: Quest Specification Comparison

Despite the performance upgrades, Facebook has managed to bring the hardware price down. With the standard edition being introduced at $299, the Oculus Quest 2 is expected to quickly gain traction. Since the launch of its first standalone design, or Oculus Go, back in May 2018, Facebook has been focused on building a strong user base for Oculus by introducing affordable VR headsets. The Quest family, thanks to its competitive pricing, the comfort of wearing, and ease of playing, has become the major driving force behind the user growth and now is at the center of the Facebook VR ecosystem.

Exhibit 2: Oculus Sales Estimates During Each Initial Rollout Period

Oculus Sales Estimates During Each Initial Rollout Period


During the first year after its launch, the Oculus Quest saw its sales far ahead of Oculus Go. Meanwhile, Oculus ecosystem developers were able to rake in over $100 million. With the worldwide lockdowns due to the COVID-19 pandemic, consumer spending on Oculus Quest content increased significantly. The revenue in Q3 2020 alone is expected to reach $50 million, greatly inspiring content creation around the Quest platform.

Facebook plans to stop producing the Oculus Rift S in 2021, it is focusing on development of standalone type of VR headsets just like the Quest 2, which will leverage Oculus Link for consistent PC VR gaming experiences. With more production capacity shifting to the Quest 2 in 2021, it will outpace the previous Oculus gadgets and set a new high during October 2020~October 2021.

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