Report: VR headset install base will hit 81 million by 2020

The install base of virtual reality headsets is poised to leap to 81 million devices by 2020, according to new research from market analytics outfit, IHS Markit. 

For context, the latest figures from 2015 show VR headsets currently have an install base of roughly 4 million.

The group says that exponential growth will be driven by the "aggressive" promotional activity of smartphone vendors launching premium mobile VR devices, such as Google's recently announced Daydream View headset. 

IHS is also predicting that by 2020 consumers will be dishing out $7.9 billion on VR headsets and $3.3 billion on VR entertainment.

"While the VR headset installed base will escalate significantly to 81 million by 2020, we predict that expensive, higher-end headsets will dominate content monetization," explained Piers Harding-Rolls, director of games analysis at IHS Technology. 

"There will be a polarization of the VR market between lower volume premium VR headsets, which will have strong paid content conversion rates, and higher-volume cheaper smartphone VR headsets, which will monetize content at a lower rate."

Breaking that growth down, IHS suggests smartphone headsets will represent "the largest addressable" VR market for the foreseeable future, with cheaper price-points representing a major opportunity for consumers and developers -- who'll be keen to experiment with the platform. 

The race between VR on consoles and PCs will be much tighter, but Sony is expected to take an early lead in the high-end headset race because of its huge console install base, coupled with the fact that many of its users are already receptive to the idea of virtual reality gaming. 

The graph below shows how IHS expects the VR battle to unfold over the coming years.