VR Momentum Fades as Industry Shifts Toward AR
Virtual reality and immersive technologies were marketed as revolutionary for business and computing. Their primary promise was to enable hands-free interaction, immersive collaboration, and advanced remote features, intending to replace traditional screen-based work across industries such as design and healthcare.
Progress has lagged, and several prominent products have lost traction. Microsoft discontinued HoloLens, Google Glass no longer serves mainstream productivity, and Meta ceased developing its premium Quest Pro headset.
Meta’s investment in immersive computing began with its 2014 acquisition of Oculus. The move was part of a wider strategy to build a new computing platform beyond smartphones. This was similar to Google’s acquisition of Android to reduce its reliance on other operating systems. Recently, Meta has focused more on smart glasses. The company sees these as a way to rely less on Apple and Google’s mobile operating systems.
Over the past decade, Meta has invested heavily in developing virtual reality, especially through its Quest line of devices. Although not formally branded as a gaming console, developer events often underscored games as Quest’s primary third-party content.
Adoption in both enterprise and consumer markets has remained slow. Advanced features tied to immersive-level computing did not translate into practical business use. Many devices had restricted fields of view, and VR and AR software frequently posed reliability and interoperability issues in existing IT environments. Large-scale deployment demanded significant time and cost.
Hardware design impaired workplace practicality. Headsets were often uncomfortable for prolonged use, and some users developed motion-related symptoms, limiting sustained operation during a standard workday.
Cost proved another barrier. Advanced headsets remained expensive to produce, leading to high retail prices that deterred consumer desire and slowed enterprise adoption.
These factors affected the wider ecosystem, including the gaming industry. These market limitations extend to the gaming sector. Headset sales represent a small fraction of smartphone volumes, restricting the developer base. Industry data indicates Microsoft’s Xbox Series X and Series S combined have surpassed all Quest headset sales despite launching later. Absorbing significant losses to build market share and developer support. This investment also contributed to sector consolidation, with fewer competitors remaining in the consumer VR space.
Other manufacturers have increasingly focused on higher-priced professional equipment. HTC’s most recent Vive release arrived in early 2023, with entry-level models in its current range priced at around $1,000.
As a result, industry attention is now shifting toward lighter augmented reality devices and smart glasses. Companies including Meta and Xreal are working on in-lens display technologies designed to support more practical, everyday use.
Google’s Android XR platform might widen the hardware ecosystem. It lets several manufacturers create devices that work together. The initiative is likely to attract vendors with more experience in the enterprise and PC markets. Some are also working on a Chrome OS successor named Aluminium.
Consistent with this shift, technology testing of early Android XR prototypes has indicated a move away from high-cost, episodic immersion devices toward AI-enabled glasses intended for continuous use in occupational contexts.
Previous efforts to grow Android beyond smartphones have seen mixed results. Some PC makers were impacted when Microsoft withdrew from Windows Mixed Reality. Major vendors like Dell, HP, Lenovo, Acer, and Asus are now looking at developing business tools. They want to combine augmented reality with built-in artificial intelligence.
Spatial computing is not retreating but refocusing: investment and innovation are moving away from early, consumer-focused VR toward practical, AI-integrated, lightweight wearable devices aimed at professional and everyday applications.
