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Consumers have spent $3 billion on VR apps, one market analyst and investor estimates. He sees a tipping point for the VR industry.
Tipatat Chennavasin is a General Partner at Venture Reality Fund, a Silicon Valley venture capital firm with early investments in Beat Games (“Beat Saber”), Owlchemy Labs (“Job Simulator”), and Rec Room, among others.
Chennavasin has been a VR market analyst for many years. In a new issue of the Lowpass newsletter, he published some of his latest sales figure estimates.
Chennavasin’s investments and revenue estimates are informed by the number of reviews for listed titles, publicly available statistics, and internal performance data shared with him by VR studios.
Meta Quest is the biggest driver of VR’s success
According to the investor, VR developers have generated about $3 billion in revenue since 2016. That year saw the first wave of consumer devices: Oculus Rift, HTC Vive, and Playstation VR.
The majority of those sales came from the Meta Quest Store, which launched in 2019. Chennavasin estimates that the store’s app revenue is approaching $2 trillion and that, in 2022, 73 percent of all app revenue was generated on that platform alone. In October 2022, Meta announced that the Meta Quest Store had generated $1.5 billion in app revenue to date.
The top selling game is Beat Saber. According to a recent Wall Street Journal report, the title has earned $255 million as of October 2022.
“Golden age for VR indie developers”
“It’s not a $100 billion sector yet,” says Chennavasin. “But the fact that so many developers are making real money now is fascinating to me. 40 titles have done over $10 million in revenue, that’s huge for the Quest.”
The investor sees this as a tipping point in VR, “where it’s definitely not going away.”
At this point, the investor sees great opportunity for indie developersas the VR market is not as crowded and competitive as more established gaming markets.
“They might not be making $100 million, but if you take a $1 million budget and you make $10 million, a 10X return, that investment is fantastic. Right now, we’re in this golden age for indies.”
For more info, check out the Low pass newsletter. Lowpass is a weekly newsletter about the future of entertainment and the next big hardware platforms, including smart TVs, ambient computing and AR/VR.
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You can read all about the Meta Quest 2 and Meta Quest Pro in the linked reviews.
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