Revenue from VR games will grow from $1.2bn this year, to $8.2bn by 2023, according to Juniper Research.
The analyst company forecasts that over 100 million mobile VR devices, including smartphone and standalone headsets, will access games globally by 2023; rising from 52 million devices in 2019.
The development of smartphone VR will be essential to this growth, and to building consumer interest and confidence in VR, the company said. Sales of standalone VR hardware were disappointing in 2018, Juniper added, so the development of low-cost VR on smartphones and other mobile devices will be important to engage users and encourage them to other VR platforms.
Mobile VR will account for over 55% of total VR games revenues by 2023, according to the company's report ‘Virtual Reality Markets: Innovation, Disruption & Future Prospects 2019-2023'.
Research author Sam Barker explained: "Revenues from VR-specific mobile games will exceed $4.6 billion by 2023, however average revenue per mobile VR games user will be the lowest of all VR platforms. In response, app developers must mitigate high app abandonment rates by providing engaging and continually-updated content".
Juniper forecasts that more than 50% of mobile VR games accessed in 2019 will not be monetised due to the difficulty of implementing advertising in VR content without impeding the user experience. In response, app developers must leverage in-app purchases to recover this shortfall in potential advertising revenue.
The research reasoned that sustaining the growth of VR hardware sales will only be achieved by creating a profitable VR content market. Juniper has identified 2023 as the year in which VR content revenues, including games, multimedia, gambling and others, will surpass hardware revenues for the first time. It recommended that VR headset vendors now focus on increasing their VR content libraries through app store partnerships to capitalise on the anticipated growth of VR users.