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VR Games Market Report

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Dec, 2022 An Overview and Outlook of Virtual Reality
in Games and Beyond
Newzoo Trend Report 2022

© Newzoo 2022
Growth continued even after 2020 ’s resurgence .
Several VR developers shared record player
numbers across the holiday season in 2021 .
Metaverse hype and investment also contributes
to VR growth
Some of the world’s biggest
technology companies, including , are
working hard on the next generation of headsets .
Meanwhile, PlayStation is reigniting its
involvement with its upcoming PS VR 2.
.Now, the VR install base is growing faster
than ever before, VR is becoming a more
sustainable platform for developers, and even
more high -quality content is imminent .We will
see further developments in VR hardware,
software, and use cases (in and outside of
gaming) in the coming years .
.In turn,
.
To explore this growth, this report looks at VR’s
latest developments in gaming and beyond .
When (formerly ) acquired
in 2014 ,it triggered a huge influx in VR
interest from investors and companies .Yet, VR
did not quite live up to expectations ;headsets
were based on very early technology, and the
hardware required to run software was extremely
expensive .A Developers
were unwilling to create VR content due to the
market’s small audience, while the audience was
unlikely to grow because of alack of content —a
true chicken -and -egg problem .
However, the tide is turning .The VR market
enjoyed aresurgence in 2020 .
in general, as consumers craved
escapism and social features .Gaming acts as the
major touchpoint between consumers and VR, so
the platform attracted many (new) users via
immersive experiences and social activities in
virtual environments .VR also saw its first AAA
killer app with the highly anticipated release of
.Meanwhile, Meta’s affordable and
untethered headset made VR more
accessible to the masses .
Gaming has been and will continue to be the key driver of VR’s growth
CAGR 2019 -2024 of the
global active VR HW install
base.
2
–VR Market Analyst
–Game Dev. & Publishing Consultant
–Metaverse Market Analyst
–Market Lead Telecom & Mobile Services
–Market Analyst & Writer
–Editor in Chief
–Lead Visual Designer

Ecosystem Infographics 7
Active VR Install Base & VR Game Revenues 8
Top 100 VR Game Analysis 16
VR Headsets Overview & Case Studies on VR Games 19
VR Game Development 26
VR Hardware & Peripheral, VR Technologies 27
VR Gaming 32
The Metaverse 35

© Newzoo 2022
z
XR is a term that encompasses any technology that alters reality by adding digital
elements into a physical or real -world environment to any extent .It refers to any
technology that blurs the lines between the physical and the digital worlds .Currently, the
term XR encompasses all of VR, MR, and AR technologies .
The computer -generated simulation of athree -dimensional image or environment that
users can interact with in a seemingly real or physical way via special electronic
equipment, such as aheadset with an internal screen or controllers/gloves fitted with
sensors .
MR connects physical and digital worlds, using sensory and imaging technologies .The
blended world allows users to interact with physical items, digital items, and
environments using their own hands .All of this happens while wearing aheadset .
The number of directions of users’ positional tracking in VR .The positional tracking relies
on built -in or external sensors to capture movement .While 3DoF tracking only measures
three types of directional rotation (rolling, pitching, and yawing), 6DoF adds three further
directional movements (elevating, strafing, and surging), allowing players to physically
move around in avirtual space rather than simply standing in one spot .
VR -only games refer to VR games/apps that can only be played through VR (e.g.,Half –
Life :Alyx, Beat Saber) .VR -Integrated games refer to VR games/apps that can be played
outside and inside VR devices (e.g.,Resident Evil 7,Star Wars :Squadrons) .
4
(P 7)
• Manufacturers of consumer VR headsets, that are capable
of 6DoF positional tracking and are required for consumers to engage with VR games .
• Content distribution platforms that offer players easy access to
VR games .Platforms include the Meta Quest Store, Steam ,and the PlayStation Store .
• Manufacturers of peripherals that provide haptics and/or
enhance user immersion in the consumer VR gaming experience (excl .location -based
VR) .These peripherals include, for example, controllers, haptic gloves, full -body
tracking suits, and treadmills .
• Gamified virtual spaces whose core focus is meaningful player
interaction and socializing, rather than on traditional gaming experiences .
• Studios that are responsible for planning, developing, and
releasing VR games and apps to consumers .
• Tools and services that enable and support the
development of VR games and apps .They range from game engines like Unreal
Engine or Unity, which support the development of VR games/apps, to computer
graphics software applications like Blender, which are used to model and simplify the
planning and development processes of VR game/app development .
• Cloud services and infrastructure that aim to increase
access via cloud to high -end VR titles without requiring users to purchase the latest
and most expensive VR devices .These technologies should theoretically enable
players to stream high -fidelity PC VR -level games onto their standalone VR headsets
through their internet connection .
• Providers and manufacturers of the key hardware
components that allow aVR headset to function by properly processing and executing commands .These include Qualcomm’s Snapdragon CPU chipset (found in every Meta Quest headset), Intel’s processing cores, and NVIDIA’s GPUs for PC VR .
A definition of the key terms used in the VR market

© Newzoo 2022
The methodology behind Newzoo’s active VR hardware install base & VR games revenues
First, Newzoo’s VR market -sizing scope covers and
.Therefore, we that can also be also used to play VR games .Degrees of Freedom (DoF) refers to the number of
directions of users’ positional tracking in VR .The positional tracking relies on built -in or external sensors to capture movement .While 3DoF tracking only measures
three types of directional rotation (rolling, pitching, and yawing), 6DoF adds three further directional movements (elevating, strafing, and surging), allowing players
to physically move around in a virtual space rather than simply standing in one spot .We believe that 6DoF is essential for immersive VR gaming experiences .
Therefore, we ;for example, all smartphone -based VR headsets (Samsung Gear VR, Google Daydream, and Cardboard)
and entry -level standalone headsets such as Oculus Go .
Our definition of at the end of each year .This means that we
.For example, ifan Oculus Rift owner purchased aMeta Quest 2in 2020 ,the Oculus Rift would not be
counted as an active install base ifthe owner did not play the Oculus Rift in 2021 .Furthermore, in order to count headsets as part of the active install base, headsets
need to be produced by manufacturers, shipped by the manufacturers to retailers, sold by the retailers to consumers, and activated/played by the consumers .This
that some research firms use for
reporting .
We categorize consumer VR headsets into the following : , ,and .PC VR includes consumer VR headsets that
require aVR -ready PC to run software, such as the and .Examples of standalone VR include the and ,which do not
necessarily require aPC or connecting the headset to aPC to play games .
Lastly, our forecasts only include potential successors of existing brands and works confirmed or hinted at by new brands or suppliers .Both the new entry of game –
changing headsets (brands) and introductions of high specs with aggressive prices could easily affect the market situation .To that end, Newzoo will continue
monitoring the market closely and reflect the latest developments into our forecasts at the best possible time .
5

© Newzoo 2022
Ecosystem and market sizing

© Newzoo 2022 7 Source: P lease read P4 for an explanation of the Consumer VR Ecosystem (Games).

© Newzoo 2022
Thanks to affordability and easy set -up, standalone VR headsets will continue to drive further VR adoption
8
CAGR 2019 -2024
Global | 2019 -2024
Source: ©Newzoo | Global Games Market Report | November 2022
Newzoo’s VR market -sizing scope covers
and
. We exclude enterprise headsets that are compatible with VR games and headsets that use only 3DoF tracking, including all smartphone -based VR headsets and entry -level standalone headsets such as Oculus Go .We define the active VR hardware install base as the number of headsets that are .This distinguishes our active install base numbers from estimated numbers in production, shipment, and retail sales .Please see P5for further details of our VR market – sizing scope .
2019 2020 2021 2022F 2023F 2024F

© Newzoo 2022
CAGR 2019 -2024
Growing active VR headset numbers will lead to more spending, while average revenues per player will also grow
9
Global | 2019 -2024
Source: ©Newzoo | Global Games Market Report | November 2022
Newzoo’s VR market -sizing scope covers
and
. We exclude enterprise headsets that are compatible with VR games and headsets that use only 3DoF tracking, including all smartphone -based VR headsets and entry -level standalone headsets such as Oculus Go .We define the active VR hardware install base as the number of headsets that are .This distinguishes our active install base numbers from estimated numbers in production, shipment, and retail sales .Please see P5for further details of our VR market – sizing scope .
2019 2020 2021 2022F 2023F 2024F

© Newzoo 2022
D emographics, VR usage, and general gaming
behavior: VR headset owners & VR gamers

© Newzoo 2022
All data and analysis in this session are based on Newzoo’s online
survey conducted in the U.S., the U.K., China, and Japan . We
surveyed 5,797 respondents aged 10 -50 across these four markets .
Based on respondents’ VR headset ownership and usage, we define
three groups of consumers as follows :
• Respondents who report owning any VR
headsets .
• VR headset owners who report gaming as one of
their top 3 use cases .
• Respondents who don’t own any VR
headsets .

© Newzoo 2022
34%
18%
21%
11%
15%
39%
20%
21%
11%
9%
Several times per week
Once a week
Several times per month
Once a month
Less than once a month
Nearly 60% of VR gamers use their headsets at least once a week
12
Overall, VR gamers use their VR headsets than general VR
headset owners .VR gaming’s diverse content offering, combined with VR
gamers’ general love for games, explains why VR gamers use the
headsets more often .Around
.
Base: Online population aged 10 -50 across US, UK, CN, JP (n=5,797) VR headset owners (n=797), VR gamers (n=542) Source: Newzoo Consumer Insights –Mini Survey: Metaverse and VR | June 2021
VR Headset Owners VR Gamers
VR headset owners vs. VR gamers
Other
Education
Work related activities
Designing
Traveling
Attending virtualevents/performances
Watching video/films
Playing games
Use cases that are ranked among top 3 by VR headset owners
for VR users .This is unsurprising,
as gaming is amajor consumer gateway to VR . of VR headset owners report
gaming as one of their top 3most preferred use cases .We define this subset of
VR headset owners as . of VR headset owners state that gaming
is their .

© Newzoo 2022
14-20 21-35 36-50
As early adopters, VR headset owners share a similar profile to tech -savvy consumers
13
Base: Online population aged 10 -50 across US, UK, CN, JP (n=5,797) VR headset owners (n=797), non -VR headset owners (n=5,000) Source: Newzoo Consumer Insights –Mini Survey: Metaverse and VR | June 2021
(Not 100% stated)
14-20 21-35 36-50
Low Mid High
Across the four key markets,
VR
headset owners skew male,
while the gender split among
non -VR headset owners is
more balanced (slightly
skewing female) . VR owners
tend to earn more, which
makes sense as VR headsets
and content can be expensive .
With the introduction of more
affordable devices (e .g.,Meta
Quest 2,even after its price
bump), the gap may become
narrower .
In terms of hobbies,
, both playing and
watching .
Low Mid High
Play video games(73%)
Watch gaming video content/esports (63%)
Watch sports on TV/online (59%)
Reading (44%)
Watch sports on TV/online (39%)
VR headset owners vs.
non -VR headset owners
Play video games(48%)

© Newzoo 2022
They are also more likely to continue/start playing in the future
14
Base: Online population aged 10 -50 across US, UK, CN, JP (n=5,797) VR headset owners (n=797), non -VR headset owners (n=5,000) Source: Newzoo Consumer Insights –Mini Survey: Metaverse and VR | June 2021
VR headset owners
than
non owners (73 % of existing
players among VR headset
owners vs . 48 % of non
owners) . Their intention to
in the
future is also higher (94 % vs .
74 %).
VR headset owners and non
owners share similar gaming
motivations . However, if we
zoom in on (VR
headset owners who claim
gaming as one of their top 3
VR use cases),
is
among the top 5 most
important gaming motivations
for them .This is in line with the
unique gaming experience that
VR provides .
VR headset owners vs.
non -VR headset owners
(Excl. VR gaming)
Yes Probably Not sure Probably not No Yes Probably Not sure Probably not No
To relax/unwind (33%)
Excitement of playing (28%)
Socializing with friends (26%)
Expressing creativity (21%)
To fill time (21%)
To relax/unwind (42%)
To fill time (28%)
Excitement of playing (24%)
Socializing with friends (18%)
Escaping from everyday life (17%)
1
2
5
4
3
1
2
5
4
3

© Newzoo 2022
Top 100 VR game analysis,
VR headsets overview & case studies on VR games

© Newzoo 2022
33
41
15
10
15

8
8
7
7

4
4
27
19
28
11
4
17
7
5
5

6
1
3
Adventure
Shooter
Simulation
Sandbox
RolePlaying
Racing
Puzzle
Music
Sports
Fighting
Arcade
Platformer
Others
Traditionally popular subgenres (action -adventure) and niche, immersion -based ones (survival horror) are also prevalent
16
# of Games | Steam & PlayStation | July 2021 –June 2022 Ranked by # of Games | Steam & PlayStation | July 2021 –June 2022
VR -Only Games VR -Integrated Games
Survival Horror
Narrative Adventure
Action -Adventure
The Walking Dead: Saints & Sinners
A Fisherman’s Tale
Trover Saves the Universe
Superhot VR
Star Wars: Squadrons
Rez Infinite
First -Person Shooter (FPS)
Vehicular Combat
Third -Person Shooter (TPS)
Vehicle Simulator
Job Simulator
Social Metaverse
Microsoft Flight Simulator
Job Simulator
Rec Room
The most popular genres on VR seem to follow asimilar trend to traditional games .
Adventure, shooter, and simulation are the top genres for VR -only games (on VR
platforms alone) and VR -integrated games (on multiple platforms) alike .
The most popular subgenres for VR games include many traditionally popular
game types, such as action -adventure and FPS, but also niche subgenres like
survival horror and job simulation games (benefiting from VR’s immersion) .
Source: ©Newzoo | Newzoo Expert | For details of Newzoo Games Taxonomy, please visit here .

© Newzoo 2022
Unlike top genres, top themes for VR -only games and VR -integrated games vary
17
# of Games | Steam & PlayStation | July 2021 –June 2022
11
15
5 6
13
9 7 8 7 7
2 5
0
4 1 1 1 1 0
18
26
9
17
11
3
4
3 2 2 0
5 1
6 1 4 1 1 1 1
10
VR -Only Games VR -Integrated Games
Source: ©Newzoo | Newzoo Expert | For details of Newzoo Games Taxonomy, please visit here .
flightsimulator.com , stresslevelzero.com , nomanssky.com
Games based in a futuristic setting that resembles human society, with significant technological advancements and possibly other societal developments that have alarge impact on human society .
Games that mostly take place in and around Earth and inamodern -day environment .
Set mainly or entirely in outer space and including alien races .The emphasis ison space warfare, alien interaction, adventure, or interplanetary battles/exploration .These games usually involve conflict between opponents with advanced abilities, futuristic weapons, and other sophisticated technology .
Compared to genre, there is more variance across the top themes for
VR -only and VR -integrated titles .For example, VR -only includes more
high magical fantasy themes than modern day ones, and VR –
integrated has more sports &athletics than advanced human society .

© Newzoo 2022
There isno defined win condition insandbox or free play modes .Instead, players are largely permitted to do what they want (if they adhere to the rules of the game) .
Story modes —or campaigns —see the player following a narrative, story, or an otherwise progressive path to an ending .The sequence of moving from start to acertain ending in the story, narrative, or path iskey .
Death match is a game mode where the objective is to defeat opponents, eliminate or defeat the opponents’ units/army, or eliminate the opponents as many times as possible to win the game .Defeating opponents isthe sole win condition .
49
27
18
7 7 8 10 6 3 4 6
0 3 1
41
27
12
19 14 7 3 5 6 3
1
6 2
0
Game modes for top VR titles are distributed evenly across VR -only and VR -integrated titles
18
# of Games | Steam & PlayStation | July 2021 –June 2022
Source: ©Newzoo | Newzoo Expert | For details of Newzoo Games Taxonomy, please visit here .
store.steampowered.com , recroom.com , vankrupt.com
VR -Only Games VR -Integrated Games
Game modes for top VR titles are fairly evenly distributed across VR –
only and VR -integrated titles .Narrative, creation, and competition are
some of gaming’s core concepts, and VR’s can amplify all three .

© Newzoo 2022

© Newzoo 2022
Valve Index, PlayStation VR2, Meta Quest 2, and Meta Quest Pro
20
June 28, 2019 February 22, 2023 October 13, 2020 October 25, 2022
$999
(with controllers and 2 base stations) $549 $299 → $399 from Aug 2022
(128GB model with controllers) $1,499
VR -ready PC PlayStation 5 PC optional PC optional
Cable Cable Optional
(Cable/wireless to play PC VR content)
Optional
(Cable/wireless to play PC VR content)
Fresnel Fresnel Fresnel Pancake
LCD OLED LCD QD -LCD
1440 x 1600 2000 x 2040 1832 x 1920 1800 x 1920
Up to 144Hz Up to 120Hz Up to 120Hz Up to 90Hz
Outside -in Inside -out Inside -out Inside -out
(with self -tracking controllers)
Color passthrough Black & white passthrough, eye
tracking, foveated rendering
Black & white passthrough, hand
tracking
Color passthrough, hand tracking, eye
tracking, foveated rendering, face
tracking
SteamVR PlayStation Store Quest Store, SteamVR Quest Store, SteamVR
Source: valvesoftware.com , meta.com , playstation.com
(Last updated on November 2, 2022)

© Newzoo 2022
Pico 4, Pimax Crystal QLED, and Skyworth Pancake 1C
21 Source: pico -interactive.com , Pimax Crystal Launch Event , skyworthxr.com
September 27, 2022 (China)
/ October 18, 2022 (Europe & Asia) Q4 2022 August 26, 2022 (Presale)
CN ¥2499 / €429 (128GB model) CN ¥ t o be announced / $1,599 CN ¥2999 / $450
Optional
(VR -ready PC to play PC VR content)
Optional
(VR -ready PC to play PC VR content)
Optional
(VR -ready PC to play PC VR content)
Optional
(Cable or wireless to play PC VR content)
Optional
(Cable or wireless to play PC VR content)
Optional
(Cable or wireless to play PC VR content)
Pancake Aspherical Pancake
LCD QLED LCD
2160 x 2160 2880 x 2880 1600 x 1600
Up to 90Hz Up to 160Hz Up to 90Hz
Inside -out Inside -out Inside -out
Color passthrough Eye tracking, foveated rendering, hand tracking,
passthrough (optional add -on) Black & white passthrough
Pico Home, SteamVR Pimax Store, SteamVR In-house Store, SteamVR
(Last updated on November 2, 2022)

© Newzoo 2022
Half -Life: Alyx has laid down the gauntlet for AAA VR games, and it will inspire future AAA VR content
22
2020
PCVR, various headsets
Valve
Shooter
$59.99 at launch
Fans were practically begging for
a new Half -Life game for over a
decade .Making Alyx exclusive to
VR was a
(and
its Index headset) .Valve took the
tried -and -true linear first -person –
shooter formula and packaged itin
VR, taking inspiration from proven
VR mechanics .This resulted in a
seminal VR game, one of the most
polished and well -rounded VR
experiences on the market .
What sets Half -Life : Alyx apart
from many other titles is how
much it lets players interact with
the environment . Players can
essentially
,adding
to the immersion .
in Valve’s own
Index headset only makes the
game more immersive, thanks to
extra layers of interactivity like
crushing soda cans and even
playing afully interactive piano .
A player using an in-game marker to doodle on awindow (all optional) .
Half -Life :Alyx is a VR first -person shooter that
leverages one of PC gaming’s biggest franchises .
Valve developed the game specifically for its
propriety premium VR headset, the Valve Index
(launched in 2019 ).Alyx
, including finger
tracking .However, the title is compatible with a
range of VR headsets .The series’
translate well
into VR, leading the game to be well -received .It
also supports mods .
Alyx’s impressive visual fidelity,
including
makes the game
more immersive .
However, these features limit the
title’s total addressable market, as
players not only require a
compatible VR headset but also a
gaming PC powerful enough to run
Half -Life Alyx . The game’s
recommended
.
Fan -favorite characters in a gap – bridging new story attracted many fans . High -end graphics and asense of scale let players see familiar locales like new .
Source: store.steampowered.com

© Newzoo 2022
The game empowers people to discover cultural heritage sites and enrich their worldview via XR and photogrammetry
23
Late 2021
Meta Quest, PSVR, Pico
Realities.io
Puzzle
$14.99 -$19.99
Puzzling Places is arelaxing 3D VR jigsaw puzzle
game that uses a mix of
to render
of beautiful places from around
the globe .An early prototype was initially launched
in before the app was
officially released, to critical and commercial
acclaim, in
.Realities .io continues to update and
optimize the game with periodic releases of new
puzzles, either added for free or as DLC packs .
Source: realities.io
Puzzling Places is the result of Realties .io’s desire to
share astounding global sites with players, aiming
to
The game received acclaim for its
.It is one of the highest -rated
games on the Quest Store .It currently features 21
unique puzzles created from detailed
photogrammetry 3D scans of real locations .Puzzles
are available in .
The game uses the ,
enabling players to continue playing while stepping
outside the VR environment to see areal -time view of
their surroundings .The game is also
;though, it is currently
restricted due to Quest’s hardware limitations .
Future plans include the
to make the player experience smoother and
take full advantage of the latest in XR headset
technologies . In addition, the developers plan to
continue supporting the game by adding a
.
Passthrough puzzling
Background lighting +contrast features

© Newzoo 2022
Standalone VR headsets complement fitness better; manufacturers like Meta are marketing their headsets as a fitness tool
24
2020 (formerly BoxVR)
Meta Quest
FitXR
Simulation
$9.99/month
Source: meta.com , fitxr.com , store.facebook.com
FitXR is a ,
(high -intensity interval training), and
workouts, featuring licensed/license -free music .The
app adds one new workout every day, with classes
hosted by professional trainers . A
allows play sessions with up to
six friends, and players can also join the
to find players .The app
launched with aone -off purchase and optional DLC,
but itshifted to a in April 2021 .
Pandemic measures saw gyms closing and people
confined to their homes .However, VR fitness apps
filled agap for many people looking to stay fit from
home . The launch of
,and the related success of
the Quest 2,boosted the growth of VR fitness .
Meta is even promoting
and launched
.The tracker allows users to monitor
stats such as calories burned across different
fitness apps e.g.,FitXR and Supernatural, enhancing
the usability of VR headsets as afitness tool .
Monotonous workouts make working out long term a
big commitment, in the real world and VR alike .
allowed its
developer to monetize players stably for longer,
keeping things fresh with new workouts, modes, and
music .VR fitness games quantify workouts via scoring
and based on
these scores .Along with such features, FitXR’s
,
motivating players to aim for ahigher score than their
friends, building engagement and retention .
Scores, level, hit counts etc
Real -time leaderboard Friends’ avatars e.g., in the multiplayer mode
Oculus Move on mobile Oculus Move in VR

© Newzoo 2022
Key developments in VR software, hardware, and technologies

© Newzoo 2022
However, performance and fidelity are somewhat lacking compared to higher -end traditional PC VR
26 Source: store.steampowered.com , meta.com
launched its first 6DoF standalone headset, the ,in May 2019 .One
of the major USPs for standalone headsets is .They don’t require
apowerful PC/console or cables .The Quest has all the required components
for computing, tracking, and sustaining power built directly into the headset
unit, allowing users to essentially .This easy setup, boosted by
its successor the Quest 2’s ,helped lower VR’s barrier to
entry . Furthermore, continuous developments in adopted lenses (e .g.,
pancake lenses) will make headsets lighter and more compact and optimize
the wearing experience .Thanks to these advantages, standalone headsets will
further in the future .
Standalone headsets like the Quest 2,use ,
which tracks movements through headset -mounted cameras . Inside -out
tracking does not require setting up external tracking devices (base stations) .
On the other hand, (like the )has base stations
track movements, leading to and .
Users can also install multiple base stations for .
However, standalone VR’s minimal setup has sacrifices in terms of
performance .Standalone headsets use similar chipsets to smartphones (e .g.,
Quest 2 uses ). While continuous improvements in
performance are expected, these chipsets currently have less processing
power compared to agaming PC (which is necessary for PC VR) .As aresult,
even though many high -profile VR games were ported and launched for
standalone headsets, there are certain high -fidelity games, like ,
that simply cannot run on the market’s current standalone headsets .
Headset and two base stations (connected to aPC via acable) and two controllers . Headset and two controllers .
Two (or more) base stations .Players place them at the best angles to track movement . Movement must be within the sight of the head -mounted front cameras to track effectively (not behind the player) .

© Newzoo 2022
Both Unity and Unreal Engine expanded their offerings to facilitate
VR app development as early as 2015 /2016 .
,making it an effective
option for VR game development as VR must render two views of
the same scene (one per eye) .Therefore, developers
for PC and standalone VR alike .Unity also
benefits the Meta Quest line, which runs on an Android OS and a
Snapdragon chipset and is currently the market’s most popular VR
headset .
for VR app development, as VR hardware becomes more
powerful (via better chipsets in VR headsets and better usability on
PC VR) .These advancements allow developers to take advantage of
vs .Unity .This allows for more complex and
immersive experiences on VR platforms like the Quest, especially for
bigger titles on PC VR .
Notable engines that support VR development include
(used for their ‘The Climb’ games),
(used for Half -Life :Alyx, for which Valve even added VR mod
support), (successor to Amazon Lumberyard
which was built upon the back of CryEngine), and (a free
open -source engine with VR support since 2018 which received
funding from Meta Reality Labs in 2020 ).This list is by no means
definitive .As the VR market grows, the number of options available
for VR app development will also increase .
in the market to aselect few .However,
the growth in the VR market has encouraged other services, like
and (originally Oculus Medium), to increase
support for VR app development .These services have lower costs
and risks associated with them as against developing anew engine,
and many offer functionality beyond VR gaming .For example, the
services above look at sculpting and modeling in VR, which benefits
from the extra dimensionality VR adds .
As the market for VR games grows, tools and support for VR app development also grow
27

© Newzoo 2022
Early access for VR and its Quest app is in beta as of October 2022
Monthly subscription, starting at $30/month (256GB storage included)
Over 50Mbps download speed, under 20ms ping, 5GHz WiFi network
While emerging technologies have a way to go, they have the potential to unlock PC VR content for a wider audience
28 Source: meta.com , plutosphere.com , shadow.tech , sidequestvr.com
These days, most standalone headsets can also play PC VR (e .g., )
content through connecting to aVR -ready PC wirelessly or via acable .For
example, Meta provides two official methods, (via a USB -C
cable) and (wireless) .There is also athird -party alternative,
.As is often the case, wired connections are more reliable .Wireless
connections can be less stable and reliable depending on several factors,
including how many other devices are connected and custom user settings .
High -fidelity PC VR gaming has been mostly exclusive to people who own a
powerful PC .This high barrier to entry might be lowered in the future,
thanks to VR cloud gaming .In fact, created its own VR cloud
streaming infrastructure called to bring VR cloud gaming
capabilities to other cloud gaming services .As of July 2022 ,there are two
VR cloud streaming services available for consumers, and
,for the Quest headsets .
However, cloud gaming is dependent on a strong internet connection .
Every millisecond counts in gaming for aplayer to send acommand to and
receive a response from the server via cloud -streaming .Immersion is
important for VR, and latency caused by poor connections can limit
immersion .Once these latency challenges are solved, cloud gaming could
open PC VR content for amuch wider audience .It could also help reduce
the size and weight of headsets, as processing is handled via remote
servers .
Early access as of October 2022
Base rate starting at $1.99/hour; 128GB subscription options starting at $9.99/month
Over 50Mbps download speed, under 100ms ping required & 50ms ping recommended, 5GHz WiFi network (WiFi6 recommended)
Internet Connection
Ethernet Cable
USB -C
Router
Wireless
Wi-Fi 6 dongle (VR Air Bridge)

© Newzoo 2022
Further improvements in headsets, controllers, and peripherals pave the way for more immersive and higher -fidelity VR
experiences
29
What makes VR gaming distinctive from flatscreen gaming is
and meaningful both via
input and feedback .In this context, VR controllers play a pivotal role in the
experience .These controllers track users’ hand and finger movements and
translate them into the virtual world .Some headsets, such as the ,also
support .
Most early controllers are only capable of basic vibration feedback, and the
Quest 2’s hand tracking does not give any type of haptic feedback .These
basic features, along with limited tracking capabilities, can limit the potential
of immersion in VR .
However, headsets and controllers are continuing to improve .For example,
is capable of and its controller adopts
and features like those in the PS 5’s acclaimed
DualSense controller .Its eye tracking will not only enhance avatar experiences,
but it also supports .This innovative rendering tech
enables higher -resolution graphics with afaster performance by concentrating
graphics processing in the screen areas that the user is looking at directly .
Furthermore, several companies are researching, developing, and promoting
peripherals like ,and (to simulate walking) .
Most of these peripherals are expensive, take up a lot of room, and are B2B
focused (some have limited B2C features) . While it will take years for
compelling haptic and full -body tracking to become affordable for consumers,
improvements are certainly incoming .
launches ahaptic glove, ,for consumers at $299 per pair in Q4
2022 .The glove uses actuators on tips of fingers to deliver asense of touching
objects in VR via simple vibration on each finger (e.g.,guitar strings in ).
Source: bhaptics.com , haptx.com , tech.fb.com
Enterprise and research prototype gloves go much further than the consumer
experiences . ,such as and
,resist against player finger movements when they touch an object in VR (e.g.,
resistance of airplane controller) .This enables them to feel the textures and properties
of virtual objects (e.g.,grabbing something and crushing itwith realistic resistance) .

© Newzoo 2022
More VR apps will integrate mixed reality experiences, thanks to technological enhancements in upcoming headsets
30
The in VR headsets enables users to see
areal -time view of their surroundings through head -mounted
cameras .Meanwhile, AR glasses let users see the real world
through transparent lenses . Passthrough features in VR
headsets seamlessly blends real and virtual worlds, opening
new possibilities for experiences in VR
apps .
The ‘s passthrough feature can currently only capture
alow -resolution black -and -white view (e .g.,used for drawing
safety boundaries while using VR) . added the
experimental passthrough API for developers in July 2021 and
fully released itlater that year .Since then, several VR games —
such as , ,and —have already
integrated MR experiences into games via the Quest 2’s
passthrough feature .
Meta’s new high -end headset, the ,is capable of
.To that end, we expect
more VR apps and games will be using the feature, thanks to
new innovations in upcoming headsets .Some developers,
such as and ,have already
announced new games or updates on existing games that use
the color passthrough tech, including
, ,and .
Itlets players solve puzzles with their virtual or actual hands (via hand tracking) in their environment .
Spatial Ops is amultiplayer FPS game that users can play with others in the same physical location .
Itturns areal -world space (e.g.,living room) into acustom arena . The mixed -reality mode enables players to place the in-game board on aphysical table .
Source: resolutiongames.com , cubism -vr.com , meta.com

© Newzoo 2022
VR gaming and the metaverse

© Newzoo 2022
• VR is growing into a financially sustainable platform,
thanks to its growing active install base .For example,
one of the most iconic VR games earned
nearly $100 million* in 2021 alone ,thanks to licensed
DLC and the game’s status as aVR must -have .
• With the in development and on the
way, and will further boost their VR content
strategies via first -and third -party studios (and their
already popular IP) .
• For example, a port is
in development for the Quest headsets, following the
well -received port in 2021 .Meanwhile,
is due for the PS VR 2,
and we expect to see leveraging more
first -party IP like Horizon .
• is also rapidly investing in its VR content library,
supporting VR developers in porting their content to
Pico .Pico will also have its first major exclusive game,
,through apartnership with .
• As always, content is king, so these companies’
increasing investment into VR content will attract
more players, leading to more entries, investments in
the space, and bigger -budget game announcements
(some based on renowned IP) toward 2024 .
32
More engaging (IP -based) content will drive further adoption of VR headsets, leading more developers to enter VR
Source: beatsaber.com , half -life.com , oculus.com/resident -evil -4, picoxr.com , guerrilla -games.com , rockstargames.com
*Just Dance VR

© Newzoo 2022
VR games and apps follow the latest trends seen in traditional gaming, including hybrid -monetization mechanics
33

Most VR apps started off with this model, and
the majority still use it(e .g., ).

DLC is becoming one of the main strategies to
monetize VR apps over time (e .g., ).

These games are typically monetized via
purchasing in-game items such as in-game currencies,
cosmetics, and items (e .g., ,as well as via
subscriptions/passes (e .g., ) and other unique
services such as theatre performances in

This technique is used in
a wide array of VR
games, both free -to -play
and premium, but it is
more common in live
operation games/apps .

This is
especially popular with
fitness and social apps .

based on
player’s spend or
achievement during a set
time frame .

This has only been in a
few VR games so far .
All game/app -related purchases are monitored by the digital storefront the app isdownloaded from .The Steam and Quest stores both charge aflat 30 %fee on full game purchases, with additional levies charged on subscriptions, passes, and in-game purchases .

© Newzoo 2022
VR games/apps are rapidly experimenting with new and more complex hybridized monetization mechanics
34
The last decade has seen massive innovations
,from the early days of on Google
Cardboard to
.
Added complexity enables more , .
For example, many premium games now add extra DLC content to boost
revenue, retention, and engagement of their game/app over time .
This experimentation shows the VR market is moving away from
,
. Now, we see more VR
games/apps adopting a ,an
evolution that took the traditional games market decades to accomplish .These
hybrid strategies allow VR developers to better monetize and support their
game/app for longer .
Developers have also used monetization strategies, such as free -to -play, to
improve .To that end, some VR titles offer
.Many apps found popularity this way
(a way for developers to add content to the Quest store
without going through Meta’s curation process) or the (a
platform that allows players to sideload content onto the Quest) ,including the
likes of and .
In the future, we will likely see developers exploring even more diverse
monetization options for VR games/apps, including
.Trends like the metaverse and
Web 3are only underlining these monetization options further .
Meta is testing new mechanics that allow within their worlds e.g.,accessories for aFashion World .
An immersive theatre experience in VR, that. Initially poised to but withdrew due to fan backlash because Blaston isapay -to-play game and ads could disrupt gameplay experiences .
Zenith is an MMO that monetizes through ; .
Source: about.facebook.com , zenithmmo.com , tenderclaws.com/tempest

© Newzoo 2022
Outside of VR, social games like Roblox, Minecraft, or Fortnite are currently
some of the world’s most popular franchises .We have seen this trend starting
to emerge in VR as well .Rec Room —asocial platform which attracted over 3
million VR MAU in April 2022 1—is currently one of the most popular VR apps .
,as other titles like Meta’s Horizon Worlds,
Microsoft’s AltspaceVR, or VRChat try to build more engagement .
This focus on social experiences makes sense . Compared to traditional
platforms,
These aspects are
crucial for meaningful interactions in the metaverse .
Glitch Mob performed a in Sansar, a VR social platform. Shows inside virtual worlds have already become commonplace for many traditional artists.
A rising interest in inter -human VR communication is incentivizing game developers to shift their focus to social games
35
Though often used interchangeably, the metaverse and virtual worlds are
separate concepts .While the metaverse will be comprised of many individual and
interconnected virtual worlds, no singular virtual world can and will be the
metaverse (for now) .We further define the
and that are populated by large numbers of users who interact with
each other via their 3D digital avatars .The metaverse, therefore, offers a
,which is also one of VR’s use
cases .In the future, the metaverse will be accessible through different devices —
or gateways —like mobile, PC, console, or VR headsets .
As more companies focus their efforts on the next evolution of gaming —and as
players start gravitating towards ever more immersive experiences —
.
Roblox Lineage 2
Rec Room provides users with a platform to
from the ground up.
Source: 1 https://www.roadtovr.com/rec -room -monthly -active -vr-users -3-million -peak/
Lineage , Roblox , Horizon Worlds , Rec Room a), Rec Room b), Sansar a), Sansar b)
The next evolution of games

© Newzoo 2022
VR’s use cases beyond gaming

© Newzoo 2022
VR technology can prove essential for many industries, from retail and healthcare to education and tourism
,it also has other use cases that extend far
beyond entertainment .Simply put, VR is already starting to
benefit society, and this will continue to be the case .
The internet led to the creation of new professions and the
enhancement of already existing ones . Similarly, the
sectors
like manufacturing, automotive, city planning, and many
others will benefit .
VR is already helping designers and architects virtually
visualize their real -world projects via high -fidelity, true -to -life
renders of buildings .These models are
for companies
across the world .While on -site supervision will always be
important, VR is pushing the planning process forward in the
construction industry .
Accessing these environments through VR is not only safer,
helping ,but it is also
more efficient .
(with relative
ease) .As you can see on the right, the examples do not end
there .
37

© Newzoo 2022
VR technology can prove essential for many industries, from retail and healthcare to education and tourism
Source: Matterverse , Osso VR , Labster , Immersion VR , Ford , aNUma 38
Digital in -store shopping will
likely become more realistic
and commonplace as XR and
VR technologies evolve.
Consumers will be able to make
better -informed purchasing
decisions as more photo –
realistic solutions become
available. These innovations are
beneficial for both accessibility
and sustainability, leading to
Matterverse enables brands to create hyper -realistic virtual stores.
Surgeons and medical
professionals are already using
VR devices for
(e.g., visualizing
surgery’s outcome possibilities
predicted by AI )
VR can also be
used to enhance consumer
experiences such as
. One use case is
simulating stressful situations
in VR to examine how people
respond to stress and help
them to overcome anxiety.
aNUma provides digital group therapy sessions combining VR with the science of psychedelics.
As well as making education
more accessible globally,
Thanks
to the immersive nature of
VR, students can be instantly
transported to various digital
environments that fit the need
of the educational experience,
for example, detailed 3D
anatomy for biology and
realistic ancient civilizations
for history.
Labster offers virtual science courses and simulations in VR.
While the pandemic brought
tourism across the world to a
standstill, VR technologies
allowed consumers to ‘’visit’’
new places virtually. VR now
features
through
techniques such as spatial
photography, democratizing
by
allowing individuals to
virtually visit distant places
from the comfort of their
own homes.
Immersion VR produces 360VR content for brands and consumers.
Car manufacturers like the Ford
Motor company are already
adopting VR technology to
enhance their operational and
manufacturing capabilities
from prototyping and up to the
production stage. Some of the
benefits of doing so include
The Ford Motor Company uses VR technology as part of its vehicle design process.

© Newzoo 2022
and AR/VR, have been adopted to underpin the
gaming experiences .
In return, thanks to its high popularity among
consumers,
and
such as computer sciences,
mobile technologies, sensor systems, and more .VR
and other (game) technologies support and reinforce
each other in applications across all industries .
In recent years, like and —
thanks to their powerful 3D graphic capabilities —are
being applied in film making, automotive design,
architecture, and much more,
.With the
increasing support from these engines, they are likely
to become the key platform for VR app development
outside of gaming in the future .
We are excited to witness the groundbreaking
development and growth of VR technology in the
coming years, and how its immersion and interactivity
will benefit gamers and consumers across all sectors .
.
With the technology’s advancements, investments
from big hardware, software, and content tech firms,
and, most importantly, consumers’ desire for
immersive virtual experiences, VR is set to grow at a
healthy pace in the coming years .We forecast that
,boasting an impressive +42 .0% CAGR (2019 –
2024 ).
.
However,
;VR will continue to benefit industries like
healthcare, education, engineering, and other
entertainment sectors . Meanwhile,
in motion tracking, haptic feedback, and
spatial audio, among others, further enhance
.
—a set of dedicated
solutions and tools that is constantly evolving and
streamlining the game development process —is
.Throughout
the history of video games, many technologies,
including graphics rendering, artificial intelligence,
xxx
The gaming industry embraces innovations and cutting -edge technologies and, in return, provides a stimulus effect on the
advancements of these technologies across sectors
The global active VR HW
install base by the end of
2024.
39

© Newzoo 2022
Report Authors and Contributors
Editor in Chief
Lead Visual
Designer
Game Development
& Publishing
Consultant
Market Lead
Telecom & Mobile
Services
Metaverse Market
Analyst VR Market Analyst
Market Analyst &
Writer
40

© Newzoo 2022

© Newzoo 2022
Hero Shooter
• Art styles • Avatar number • Competitivenes s • Developer/Publisher • Dimensionality • Franchise • Game Mechanics • Monetization • Perspective • Player Number
42
• Action -Adventure • Narrative Adventure • Hack and Slash • Interactive Story • Survival Horror • Survival Arena • Open World Survival Craft • Stealth Game • Action Roguelike • Dungeon Crawler • Geo AR
Source: ©Newzoo | Newzoo Expert | For details of Newzoo Games Taxonomy, please visit here .
• Story Mode / Campaign • Death Match • Wave Based Survival • Capture the Flag • Domination • Attack/Defend • Build & Battle • Base Capture • Mission Completion • Dungeons/Raids • Sports & Racing • Best Score • Level Completion • Last One Standing / Survival • Sandbox / Free Play • Level Editor
• Party Game • Social Deduction • Endless Runner • Arcade Royale • Shoot ‘Em Up • Beat ‘Em Up • Bullet Hell
• MOBA
• Third -Person Shooter • First -Person Shooter • Hero Shooter
• Roguelike Deckbuilder • Collectible Card Game
• Traditional Casino • Meta Casino • Adventure Casino • Real Money Casino
• Coloring Game
• Platform Fighter • Traditional Fighter • Arena Fighter • Sports Fighting • Beat ‘Em Up
• Hyper Casual Runner/Racing • Hyper Casual Action • Hyper Casual Simulation • Hyper Casual Puzzle • ASMR • Hyper Casual io
• Idle Management • Idle RPG
• Rhythm Game • Dancing Game
• Puzzle -Platformer • Side Scroller • Metroidvania • Precision Platformer
• Match 3 • Puzzle & Decorate • Bubble Shooter • Jigsaw Puzzle • Word Game • Trivia Game • Hidden Objects • Physics -Based • Room Escape • Coloring Game • Puzzle RPG • Puzzle -Platformer • Detective • Brain Training • Merge & Breeding
• Arcade Racing • Kart Racing • Sim Racing • Drift Racing • Combat Racing • Drag Racing • Stunt Racing
• Action RPG • MMORPG • Tactical RPG • Puzzle RPG • Collection RPG • Narrative RPG • JRPG • Idle RPG • Souls -like • Dungeon Crawler • Action Roguelike • Traditional Roguelike • Geo AR
• Adventure Sandbox • Game Creation Platform • Social Metaverse
• Arcade Sports • Realistic Sports • Sports Fighting
• Life Sim • Time Management • Tycoon Management • Merge & Breeding • City Builder • Romance • Sports Management • Vehicle Simulator • Dress Up Game • Job Simulator • God Game • Farming Sim • Pet Sim • Social Metaverse • Battle Simulator • Survival Sim
• Build & Battle • Tower Defense • Auto Battler • Summon Battler • 4X • Real -Time Strategy • Grand Strategy • Turn -Based Strategy • Battle Simulator
• Board Game • Traditional Card • Mahjong • Solitaire • Dice Game
• Third -Person Shooter • First -Person Shooter • Top -Down Shooter • Hero Shooter • Vehicular Combat • Looter Shooter • Arena Shooter • Sniper Game • Shoot ‘Em Up • Bullet Hell
• Modern Era • Western • Medieval • Asian Imperial Age & Dynasties • Prehistoric • Ancient History • Industrial Era • Renaissance
• Mythology • Dark Fantasy • High Magical Fantasy • Low Magical Fantasy
• Historic Science Fiction • Advanced Human Society • Alien Galaxy • Apocalyptic
• Contemporary War • Sports and Athletics • Modern Day • Popular Culture
• Gothic/Occult Horror • Monster Horror • Psychological Horror • Slasher Horror • Paranormal Horror
• Mystery / Detective
• Other Theme

© Newzoo 2022
Income Brackets | Newzoo Consumer Insights – Mini Survey: Metaverse and VR | June 2021
Yearly < $40,000 $40,000 -$75,000 $75,000
Yearly < £28,000 £28,000 –£49,000 £49,000 >
Monthly < 7,000 RMB 7,000 –25,000 RMB 25,000 RMB >
Yearly < ¥4,000,000 ¥4,000,000 -¥7,000,000 ¥7,000,000 >
43

© Newzoo 2022
Global, regional, market key metrics
Market sizing, trends, forecasts
75,000 Gamers surveyed worldwide
Motivations, drivers, playing behavior
Games & Market Engagement Data
Covering Thousands of Games
PC, Console, Mobile, Viewership, Reddit
Player Demographics & Psychographic Data Trends, Market Sizing, Forecast Data
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