Virtual reality was supposed to rework leisure. At least, that was the expectation roughly a decade in the past with the arrival of the Oculus Rift, the primary virtual reality (VR) headset that many believed would push VR into the mainstream.
In 2025, the business has didn’t ship on that promise. But tech and leisure giants alike imagine that moment might be closer than ever.
The proof is there. The Wall Street Journal reported final month that Meta is in talks with Disney, A24 and different leisure firms to provide immersive content material for its Quest VR headsets. Apple introduced an replace to its Vision Pro headset in June, enabling customers to share content material with different headsets — supreme for watching films collectively in 3-D. Earlier this yr, Apple additionally launched an immersive Metallica concert for the Vision Pro and introduced in July it’s readying its first upgrade to spice up the Vision Pro’s efficiency.
Taken collectively, this indicators that tech and media behemoths are nonetheless betting that buyers will be prepared to spend a whole lot, if not 1000’s, to expertise live shows, films and sporting occasions past the confines of a standard display screen.
A chicken-and-the-egg paradox
In the 10-plus years since Oculus debuted the Rift, headset producers have produced lighter, extra highly effective units. Meanwhile, firms are finally warming to the concept of one other medium for storytelling.
Tech firms have a historical past of flirting with VR tasks geared toward mainstream customers. In June, Meta supplied live virtual rinkside tickets to Stanley Cup video games, echoing earlier NBA and WNBA choices. Headset homeowners have attended virtual concerts for years, together with Apple’s immersive Alicia Keys session and Meta’s Blackpink show. Disney even launched a Disney+ app for Apple’s Vision Pro on Day 1 in 2024.
But these have been pilots to gauge curiosity, not long-term investments. Historically, headsets have been trapped in a chicken-and-egg paradox: to woo leisure content material, they want mass adoption; however to succeed in that scale, headsets want premium content material.
The know-how should additionally be snug, highly effective and standard sufficient to realize mass attraction. For Sarah Malkin, director of leisure content material for Meta’s VR division Reality Labs, that cycle is already being damaged.
“I think the ‘it moment’ is when you are regularly engaging in experiences in mixed reality that are super complementary and part of your integrated life,” Malkin informed NCS. “To me, that’s already happening.”
Global shipments of augmented reality (AR) and VR headsets elevated by round 10% in 2024 to 7.5 million and practically 30.8% to three.4 million within the US, based on IDC, a world market intelligence and information firm. Although IDC predicts shipments around the globe will tumble this yr resulting from delayed product launches, it expects a large rebound in 2026 with worldwide shipments surging 98.5% to 11.3 million.
However, the outcomes haven’t all the time lived as much as the hype. Mark Zuckerberg’s Metaverse has price Meta $46 billion over three years. Reality Labs, the corporate’s VR division, posted $4.2 billion in working loss and simply $412 million in gross sales in Q1, down from the previous quarter.
But tech giants proceed to experiment with the know-how. Meta invested $3.5 billion in eyewear producer EssilorLuxottica SA to bolster its AI spectacle gambit, based on Bloomberg. (A Meta spokesperson declined to touch upon the report.) Snap not too long ago mentioned it plans to launch new augmented reality spectacles subsequent yr, and Google continues to work with companions like Xreal and Samsung on upcoming headsets and glasses that run on its new Android XR software program. Samsung will be among the first to launch such a tool with its upcoming Project Moohan headset.
With extra subtle {hardware} and a budding content material portfolio, Bertrand Nepveu, a former Vision Pro contributor and companion at Triptyq Capital, mentioned wider adoption is essential.
“It’s still early, but there’s no technical limitation right now, it’s more (that) we need people to invest because you need a critical mass,” Nepveu informed NCS.
Although massive names like James Cameron and Sabrina Carpenter are already starting to discover VR, immersive storytelling has but to realize that essential widespread recognition. Slow development can be partially attributed to incorrect assumptions by studios.
“You can’t just take the flat version of what you put on Disney+ or Netflix or Amazon, and just throw that up,” Jenna Seiden, an business guide and adviser who has labored with Skydance Media, Niantic, CAA, and Xbox, informed NCS. “You need to build natively so the audience is going to have a different experience per platform.”
While creating media for virtual and blended reality could appear to be a departure from creating content material for 2-D screens, Seiden says the key to success is a tactic media firms are already aware of: exclusivity.
“You look at the creation of HBO (Max), you look at the creation of Apple TV+, they grew their audiences based on exclusives, that’s why you went to them,” Seiden mentioned. “I think that model is very familiar to entertainment companies, and they can go to their board saying, ‘Hey, this is how platforms grow, with exclusive content.’”
That’s what makes dwell virtual sports activities a straightforward solution to break down prolonged reality (XR) obstacles for audiences. Paul Raphaël, co-founder of Felix & Paul, mentioned sports activities can be simply tailored for immersive platforms utilizing 180-degree cameras.
“You already have quite a few events and sports being broadcast, whether it’s live or asynchronous,” Raphaël mentioned. “As the audience grows, it’s a really straightforward path to create the content or to broadcast the content.”
For Hollywood, the potential for a brand new main distribution platform couldn’t come at a greater time.
In at the moment’s fracturing media atmosphere — shaken by streaming, the collapse of the cable bundle, and post-Covid field workplace woes — a brand new medium might be an important promoting level, particularly for leisure boards searching for a brand new income vein. Jack Davis, co-founder of CryptTV, mentioned headsets might present a much-needed pipeline for premium content material.
“As gigantic structural changes happen in TV and film, the industry is going to need to replace those things in the aggregate,” Davis mentioned. “This could be one of the only formats that premium entertainment actually seems like it makes sense (for) the user base.”
Budgetary and content material hurdles
Over the previous decade, funding in VR has been eclipsed by extra urgent improvements, together with self-driving vehicles and AI.
Although it’s troublesome to find out how that has straight impacted XR funding, funding information from Crunchbase, a predictive firm intelligence resolution, exhibits that backing for AI and self-driving has steadily elevated, rising from $39.96 billion in 2019 to $105.36 billion by 2025. Meanwhile, XR funding has skilled extra erratic conduct — reaching a peak of $4.087 billion in 2021 however dropping to $347.69 million by 2025.
Things have been a lot the identical within the enterprise capital world, the place the variety of international VR offers has additionally dropped in recent times.
PitchBook, which examines personal fairness and VC offers, notes that 2019 was the biggest yr for VC offers in VR within the final decade, recording $6.43 billion in offers worldwide. That was considerably smaller than the $57.084 billion from AI-focused enterprise capitalists that yr. In 2025, VR VCs have fallen to solely $3.61 billion in international offers whereas AI VCs have grown to $130.89 billion.
But Nepveu mentioned that’s altering.
“Now that AI is more understood, you know what it’s good for, what it’s not capable of, the budgets now are going back into XR,” Nepveu claimed.
Still, tech giants investing within the growth of blended reality headsets face a frightening problem that extends past the leisure obtainable. They must persuade shoppers that the units are each price paying for and placing on their faces.
That’s partially why Apple emphasised the Vision Pro as a spatial computing device, specializing in work and productiveness quite than simply 2-D and 3-D leisure capabilities.
Still, even a decade later, specialists can’t appear to agree on precisely when VR could have its breakout moment. Nepveu mentioned it might occur any day. Raphaël anticipated one or two years. Davis steered three to seven. Seiden mentioned 5 to 10.
Raphaël, nonetheless, believes 2-D content material could quickly really feel as dated as pre-Technicolor leisure.
“Content, the way it is consumed today, is going to be much like we think of black and white movies, where, if a film isn’t immersive, it doesn’t lose its value, but it becomes something of another era,” Raphaël mentioned.