Virtual reality to be a $70 billion opportunity by 2020?

Researchers from TrendForce believe there's going to be a huge virtual reality boom, with sales of VR hardware and software skyrocketing from an estimated $6.7 billion in 2016 to a whopping $70 billion by 2020. TrendForce believes there will be a $20 billion market for VR hardware in 2020, with software accounting for the other $50 billion.

Of course, the market is nowhere near that yet. With high-profile launches from Oculus, Sony, and Valve/HTC planned for early 2016, TrendForce expects next year to see VR generate $6.7 billion in revenue, with most of that coming from the hardware side given the technology's pricey initial buy-in costs.

"These explosive growth projections actually do not sufficiently reflect just how hot the VR industry is right now," said TrendForce wearable device analyst Jason Tsai. "The figures do not include the value of non-commercial uses of VR technology. For example, the industry is currently pushing the development of free software and do-it-yourself apps. While these projects do not immediately generate revenue for the developers, they have a vital role in the promotion market growth and innovations."

Other research firms are more conservative about the VR market, IHS for example wrote in October about how they expect to see a VR installed base of 38 million headsets by 2020, with annual hardware spend at just $2.7 billion. As always, we recommend taking these projections with a grain of salt as nobody has a crystal ball. Before the introduction of tablets, analysts thought netbooks were going to be massive, and that segment just fell off a cliff almost as fast it rose to prominence.