An objective analysis of XR in 2024
It’s the end of the year and I’m reflecting on how was this 2024 in XR. I strongly believe it has been a slightly negative year, but also a year that makes us think positively about the future. In this article, I’ll explain to you the reasons behind this opinion of mine, and also give you some suggestions on how XR professionals should navigate these complicated times.
The positive outlook
I’ve been in XR for 10 years, and the more we go on, the more I think I made the right bet. I don’t only love this technology, I also believe that it will be disruptive for humanity. And the more we go on, the more we have clear signals that the prime time for immersive realities will come. 2024 gave us clear signs in this sense: let me list some key moments of this year in XR that make us understand that the outlook of this industry is very positive.
Apple launched the Vision Pro
Apple, probably the most important consumer-oriented technology company, has released this year its first XR headset: the Apple Vision Pro. Apple is not a company that launches random products: usually, when it launches something in a new market it is because it strongly believes in it, and it is going to stick for years until it dominates. See what it did with smartwatches: in the beginning, the Apple Watch was not that great, but now it is the market leader in the smartwatches sector, and it also found some niches where it is overly successful (fitness and healthcare).
If Apple launched the Vision Pro, it means it thinks about dominating the AR/MR market in the next 10 years. And Apple is a trendsetter, so if it enters the field, others are coming, too. All the companies will also do their best to compete with Apple: see what has happened with Meta, which has speeded up the updates of this Quest 3, “copying” many features from the Vision Pro, with a huge benefit for all the Quest users. Apple’s presence is already enriching the ecosystem.
Google and Samsung’s headset
Talking about companies that entered the field because of Apple, Google this year launched the Android XR operating system, fully dedicated to AR, MR, and VR headsets (you can read all that we know about it in this dedicated article). And Google together with Samsung teased a mixed reality headset they are building together codenamed Project Moohan.
Google does not have the same reliability as Apple, but still, if the company that controls most of the smartphone market re-enters the XR field, and it does that with Samsung, which is one of the best manufacturers of phones, there must be a reason. Most probably these companies are thinking that now is the time to enter again the immersive realities field because they believe the market is going to grow in the next years.
Meta and its Quest 3S
Notwithstanding all the online articles mocking it for the many billions it has spent in XR, all the mess about the “metaverse”, and the hype around AI, Mark Zuckerberg has always been committed to building the metaverse. Yes, Meta has fired people, cut funds, and focused a lot also on AI lately, but there has never been a moment where Mark, Boz, or Meta in general, said that they were going to abandon XR to focus only on social and AI. This has been incredibly important to keep the whole boat of XR afloat, because if the market leader Meta had left immersive realities, this would have made the tech ecosystem and its investors lose any faith in XR, leading to a disaster for all of us.
This year Meta has also launched a new headset, the Quest 3S, that for a ridiculous price gives you mixed reality and a good processing power. While I don’t expect the Quest 3S to sell like hotcakes, I think it will have good sales and attract new people to XR. The fact that the Meta smartphone app has come to first place on the App Store at Christmas proves that the headset had good sales during the holidays. This is for sure a good indicator of the XR market growing.
Valve Deckard is coming
While the rumored new headset by Valve has become a bit of a joke in the industry, the recent finding of the 3D models of the Roy controllers in the SteamVR runtime makes us think that the headset is close to launch (probably 2025 will be the year). The launch of a new headset by Valve means first of all that Valve, which is the company that owns the biggest store of PC games, still believes in immersive realities. And then for sure Valve is bringing some innovation in the space, like it already did with the first Vive and with the Index, and these innovations will benefit us all in the future.
Smaller VR headsets
One of the problems of Virtual Reality is that it forces people to put big shoeboxes on their faces. But Bigscreen Beyond, Visor, and MeganeX 8K Superlight are proving that it is possible to make very small and performant VR headsets. The more we go on, the more the headsets are getting smaller and more socially acceptable. Even the Quest 3, while still a bit bulky, is much better than older headsets in this sense. This is amazing progress towards the wearability of headsets also in public places.
Young generations are playing VR games
A few months ago, a VR professional told me that Virtual Reality is one of the few markets where there is serious growth among young generations. We can see that in the huge success that games like Gorilla Tag, Penguin Paradise, and I Am Cat are having.
While many people complain on Reddit about the children squeaking inside games and being annoying to adults, this is an amazing thing for all of us. First of all, a growing market is always a great sign. And then, these are young guys that will grow up as VR natives, so they will be the ones that will be able in the future to build companies that will truly capture the essence of this technology (like it happened in the past with people that grew up with the Internet and then created startups like Facebook).
Ray-Ban Meta is a hit
Ray-Ban Meta has been one of the most successful XR products of 2024. These smartglasses have been a huge hit and for this reason, many other companies are now trying to emulate them: it is rumored that even Apple is internally experimenting with smartglasses.
The success of Ray-Ban Meta is in my opinion due to a few key factors:
- They are fashionable. These are not glasses for nerds, these are stylish Ray-Ban glasses that have also some technology inside.
- They are distributed in glass stores. Again, these are not tech gadgets sold at MediaMarkt, these are glasses sold in the standard glasses stores. This means that the target market is not only innovators, it is everyone. This can happen because they are distributed in thousands and thousands of stores worldwide, exploiting the huge sales network of Essilor-Luxottica.
Ray-Ban Meta showed that with the right product, the right price, and the right distribution strategy, an XR product can be successful. These glasses are also making people used to have technology on their faces when they are outdoors. It is something that gives us hope for the future of AR.
Meta Orion
The highlight of this year’s Meta Connect has been Meta Orion, the prototype of AR glasses showcased by Meta. Let me say this straight: it was a marketing stunt for journalists, enthusiasts, and investors. The device is ridiculously expensive (some people say even $25K per unit) and full of problems. It is a tech demo straight from Meta’s labs.
But it was a very cool demo, and it was something that showed for the first time to the general public that we are close to consumer-oriented AR. When I started, in 2014, glasse like Orion sounded like a dream, a vision. Now it is “doable, but expensive”, which is a huge step forward. Orion made AR tangible for many people, creating hype that is beneficial for us all (because also investors are going to be hyped about XR again and give money to XR companies).
Analysts have a positive opinion of XR.
Almost all analysts have a positive outlook for XR in the next years. And if there is consensus between them, then we have a high chances that they are right.
And it is not only about analysts: Andresseen Horovitz, one of the biggest tech VC funds in the world, publicly stated that it is the right time to invest in XR. If they believe in XR for the next years, there should be a reason.
The negative present situation
After reading the above points, you may be tempted to think that it’s a great moment to be in XR, now. Unluckily, this is not the case: the market is mostly static, and it’s hard for businesses to survive. Above I talked about a “positive outlook”, not about a current positive situation. Let me tell you some key indicators that show that things are not working well as expected.
Vision Pro sales have been disappointing
Let’s put it straight: Vision Pro sales sucked. The headset is simply too expensive to have mainstream appeal, and the fact that there is not a clear use case for it is not helping. Some people before the launch said that the Vision Pro would have disrupted the big TV market, because with it you could have had an enormous virtual screen wherever you wanted it, but this has not happened, yet.
The generalistic press, always interested in selling doom and gloom, at first overhyped the headset and then overcriticized it for not selling enough. The obvious conclusion of some journalists has been “If even Apple could not sell XR, no one can, so XR is dead”.
While we all know this is the stupid conclusion of people who are just looking for easy engagement on social media, the result is that this has created disappointment and distrust towards XR in the whole tech industry, which is not beneficial for anyone.
Anyway, being fully honest, even if we XR professionals were not expecting this headset to become mainstream, we still hoped it could sell more than it actually did. Having an app on the VisionOS store brings very little money to developers and it is mostly done to establish a presence rather than to truly earn money.
Orion and the next Vision headset are distant away
The Vision Pro is not selling super-well, but a cheaper headset maybe could have a better destiny. The problem is that all the rumors point to a cheaper MR headset by Apple in around 2026, so two years from now. The reason is that there is simply not the technology to make such a quality headset cheaper today. Also, XR has not shown clear use cases to people, so Apple has no rush in releasing a new device (considering that also has other product lines that are making huge amounts of money).
Samsung’s Project Moohan may follow suit: if the headset costs $2000 as it is rumored, it is not going to have huge sales this year, but it may perform better with a cheaper iteration. But this may need at least one year to happen, so it’s again 2026-2027.
And by the way, a similar destiny regards Orion: rumors say that a commercial version of a downgraded version of Orion may happen around 2026-2027.
This means that if you are thinking of targeting these platforms, you are not making real money anytime soon.
PSVR 2 was not a hit
The PSVR 2 headset has not been as a big hit as we hoped for. Sony did not support enough the headset after launching it at a very high price and did not release exclusive content for it after “Horizon: Call Of The Mountain”. I can’t say it abandoned the headset because the library of content is growing, the device is now also compatible with PC, and it has just been discounted to increase its sales. But it is not investing enough in it, and the sales are a bit lacking.
This will reinforce the belief of many gamers that VR is a niche tech and that the console world does not need it.
Lukewarm assessment by the analysts
The above-mentioned analysts all have a positive outlook for XR for the longer term, but a negative-ish one for the short term. They say the market is mostly static, with some of them highlighting a slow growth for 2024-2025, and some others even a slow decline. This clearly shows we are not in the best moment for XR.
Companies are closing
This year we had many news of companies closing or reducing their staff count. One example is Ultraleap, a leading company in hand tracking, where I had many friends who had been laid off. Or Glue, one of the main XR platforms for business meetings, that went bankrupt. It’s hard to do business in XR now, and this is visible through these sad pieces of news that we read.
AI is the trend
Artificial Intelligence is the tech under the spotlight now. And while we all keep chanting that AI and XR are two technologies that get along very well, the sad reality is that currently the press and the investors are all just chasing AI, with many of them considering XR and the metaverse like “that old gimmick that failed”. Such strong attention to AI is for sure justified by the big impact this technology will have on our lives but is also diverting a lot of attention and resources (i.e. money) that we in the XR spaces would need and deserve. Probably the AI hype will deflate a bit in the upcoming times, but that day is not today yet.
My personal assessment
As an XR professional (contact me if you want to collaborate), I’m living this situation on my skin, and I’m seeing all the trends that I described above.
I can confirm that this year has been a slightly negative year for the ecosystem. In the social media era, we are all used just to talking about the positive things that happen to us, writing on Linkedin motivational posts on how we managed to become a “1000 under 1000” on Forbes by just truly believing in ourselves and bribing the journalist making the classification. But then the sad reality is much different and it is the one that you discover when you are having lunch at XR events: people have been fired and are desperately looking for a job, others have been relocated, some companies have closed, others look successful and popular but are not profitable yet and can just go on thanks to investors’ money. Not to mention the fact that at XR events I’m mostly seeing always the same faces, showing that the market is mostly static.
I’m doing a not-so-much-Linkedin thing by publicly saying that money-wise, this has been my worst year since 2020. Not to mention the fact that the very promising company I was the CTO of at the beginning of the year, is no more. And I even lost the support of some people on Patreon. I’m not saying that it is a full disaster, though: I’m following some projects I’m doing as a consultant, and I have some interesting plans for 2025… so it’s not that everything is lost and we should all cry in a corner. There are opportunities around. But this shows how this has been a negative year for most people in the industry.
Some friends suggested I leave the XR field, and I’ve seen some people I know leaving the field as well, promising to return when the situation is better. Or at least more economically sustainable.
Yes, I have heard stories of success, too: the guy behind Gorilla Tag is probably using $100 banknotes as toilet paper in his house. This proves that it is possible to make a sustainable business in XR. At XRCC I met the CEO of the company making Puzzling Places, and they are managing to make good money with that. But he also told me that he’s being very practical and he’s not investing in a new game unless the internal tests prove that the new title can truly become a new hit. Otherwise, investing in a new game with little returns may risk impacting too much his company.
Of course, companies like Meta are trying to put the spotlight only on the people that are succeeding, so that to show that everything is going well. But for every Gorilla Tag that you see, probably other 50 studios are struggling to make money.
As I’ve said, I’m personally not going away because I truly believe that XR is going to succeed. And all the indicators prove that it is going to happen: this year alone we had so much good news that is giving us hope. And I see this hope in the eyes of all the people that I meet during my trips. But the problem is “when” it is going to happen, and “how”.
Because all the seeds that we are planting today (the Vision headset, Orion, etc…) may lead to fruits that we harvest in 3-4 years maybe. But we need to eat today. And then there is the “how”, meaning also which technologies are going to succeed: maybe in 2027 the big hit will be smart glasses, and so if you are a developer of virtual reality games are not benefitting from this in any way. We have many unknowns in front of us.
May 2027 be the year of XR?
When people ask me about the predictions for 2025 in XR, I say that I expect a year very similar to 2024. I’m not seeing on the horizon (pun intended) anything that makes me think that the next year will be disruptive. Yes, there will be the launch of Project Moohan, but it will be expensive; Valve Deckard will be expensive and dedicated to the niche of gamers probably; the new Ray-Ban Meta will be a nice toy, but I don’t see a critical mass of people rushing to buy them.
I think we need at least another 2-3 years for something more relevant to happen: cheaper Apple and Samsung headsets, probably Quest 4 and Quest 4S powerful and cheap headsets, more useful smartglasses, better integration of AI with XR, better development of 5G networks (that now are mostly hybrid); and especially, more understood use cases for XR in general. And this is just to have a step forward, the start of a new positive cycle for the technology. For a more explosive adoption of the technology, like it happened with smartphones, I think we are beyond 2030.
So with the data I have now in my hand, I think that sometime in 2026-2027 may be the moment when XR will stop being “dead”, and the ecosystem will enter a more positive era. But that’s just my opinion.
How can a VR professional survive the current moment of XR?
Since we are all in the same boat, you may think about asking me how I plan to survive the next 2-3 years in XR, if I think that the trend is not being very positive for the upcoming times. Well, I don’t have a perfect answer for you, but I have some suggestions.
Diversify your efforts
Do not put all your eggs in one basket: try to have multiple revenue streams. For instance, I earn money mostly as a developer, but I can also do XR business consultancies and I have this blog through which I get donations from my amazing patrons.
Work with different technologies
Even if we are XR people, it is not a sin if we do other things. If you are an XR Unity developer, you can still sell yourself to do contract work on flatscreen 3D games or 2D mobile applications. The gaming market is huge and there are opportunities everywhere.
Now it is also the moment of AI, so you could come up with some AI + XR ideas and try to exploit the AI hype to get funds for it.
I think it is the moment to open up our horizons. I’m not planning to leave XR, but at the same time, I’m opening up a bit to opportunities that are also beyond it.
Follow the trends
XR is a new cutting-edge technology and the trends are constantly changing. For instance, when I started, Reddit was the place where everyone shared super-deep-tech news about virtual reality, while now people mostly talk about games, memes, or complain about their technical problems. Things change and this creates new opportunities: on Reddit now I know I can have success if I make a good meme.
Now that there is this new influx of young people, there is the opportunity to create content explicitly dedicated to them, which is not a lot in the stores. Boz mentioned a few days ago that one of the three most used apps on Quest 3S is Youtube VR, which shows that there is also a renewed interest in media enjoyment. If you follow the trends, you can understand what are the new opportunities you have to shine.
Do not oppose the fact that things change, but adapt to that and try to transform every change into a new opportunity. Charles Darwin would be proud of you.
Do something new
This is a bit of a mix of the above points: don’t be static, if things do not work in 2024, you can not expect to do the same things and succeed in 2025. Try new revenue streams, new communication strategies, try to enter into new markets, move to another country, ask more favors from people, do cold outreach, find more grants and contests, open an OnlyFans account and sell pictures of your feet with Vive trackers on, etc…
Do whatever you can to try to stay afloat: remove the strategies that do not work, invest more in the ones that are working, and try new strategies that you have never tried before. Rinse and repeat. This is the only way to succeed.
Do not rely on headset manufacturers
Meta, Apple, Samsung, and Google, are huge companies with specific goals to pursue. They do not care about you or the community, they have just to fulfill their business goals. If Apple thinks that the best thing for them is releasing a new headset in 2026, then it is going to do that, even if it means making its Vision Pro developers starve for two years. The same with Meta allegedly cutting funds to gaming studios. These big companies may provide interesting opportunities and you should exploit them as much as you can, but remember that they may also change plans and crush you. So try to create a business that counts on multiple platforms, if you can.
Partner with people
It’s hard to succeed alone, so create partnerships with other people and try to help each other. I always say that the network of people you know is one of the biggest professional assets you have: use it!
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I have been in the XR space for many years and this is not my first rodeo: in 2017 there was an even colder XR winter. But then 2019-2020 came and things got much better thanks to Quest. New technologies have ups and downs until they eventually become mainstream: this is going to happen with XR as well, and we have to endure this rollercoaster. Remember that the season that there is after winter is spring: if we survive, together, in these cold times, we can all enjoy the blossoming of XR in the future. And with this hope, I wish you all (cold) XR people a wonderful 2025.
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