You might have seen a lot of “VR is dead” headlines lately, but let me assure you, VR is far from dead. XR Industry is in fact accelerating faster than ever

It’s 2024, twelve years since Palmer Luckey created Oculus in 2012. Since then, VR and AR have come a long way, but there’s still a strong belief that these technologies—especially VR—have “flopped” and are considered “dead.” This perception persists mainly due to the high expectations set during the 2016-2019 hype cycles when people thought VR would become the “future of gaming,” with super high-resolution, human-FOV, lightweight, and affordable headsets by now.

The truth is, VR isn’t the future of gaming—and it never will be. But that’s actually a good thing. VR will likely remain a niche market, gradually expanding to reach a broader audience. The mistake most people make when they call VR a flop is assuming its main use case is gaming, where it hasn’t necessarily excelled.

This misconception exists because, during its early days, gaming was the most forgiving use case for VR’s flaws—like low resolution, poor optics, lack of Mixed Reality, and underwhelming performance in standalone devices. However, things are changing. Headsets are improving, and new use cases are emerging. So, what will the XR industry look like in the next five years?

The Near Future of VR

I believe that the Quest 3, released in 2023, marks the “ground zero” for VR—a baseline where headsets are now good, usable, and versatile, extending beyond just gaming. From this point on, most headsets will start to move up on the scale, with improvements across the board. However, there will be exceptions, like the rumored Quest 3s set to be announced at this year’s Meta Connect. This model will retain many features from the Quest 3 but use an optical stack from the Quest 2, making it a less advanced yet more affordable option.

Many companies are now investing in XR, with Meta leading the way. Apple, a new player in the space, has made a significant bet on Augmented Reality, which is currently most viable and affordable through Passthrough technology—hence the creation of the Vision Pro. Despite its high price, the Vision Pro has already sold hundreds of thousands of units and captured 16% of the global VR/AR market share, even before its global release.

However, more players are entering the field. Samsung and Google are reportedly planning to release a developer version of their Mixed Reality headset, aimed at competing with the Vision Pro, in October this year, with a consumer launch slated for March 2025. Meanwhile, Meta has evolved Quest OS into Horizon OS and is now licensing it to third-party OEMs like Asus and Lenovo, who are developing their own headsets with access to HorizonOS content. We could see these new contenders emerge with their devices in 2025.

Apple is also gearing up for a second move in 2025. The next Apple Vision headset is expected to address two of Vision Pro’s most significant drawbacks: its price and weight. This more affordable version is rumored to be half the price and a third lighter than the Vision Pro.

Nearly all of these upcoming headsets are expected to prioritize productivity and media entertainment over gaming. Meta is also shifting its focus with the Quest line, gradually transitioning from a gaming-centric platform to something closer to the Apple Vision Pro. While these changes may seem subtle, they are steadily taking shape. Recently, Meta enhanced multitasking on the Quest 3, introduced an AI assistant, and numerous leaks are hinting that Meta may integrate Codec Avatars into their ecosystem—but more on that later.

Games are far from being a forgotten segment of XR. Meta Horizon’s VR/AR game library continues to expand, as evidenced by this year’s releases. However, there’s another major player that might re-enter the scene—Valve. Calling the rumors about their next headset, the Valve Deckard, mere leaks would be an understatement; Valve executives have officially confirmed its development. Recent leaks also suggest that Valve is working on a new Half-Life VR game, which is expected to launch alongside the Valve Deckard to showcase its capabilities, much like they did with the Valve Index.

In 2025, we may see an exciting competition unfold between Meta, Apple, and the Samsung-Google partnership. While Meta remains focused on its relatively low-end headsets, it will be watching the high-end XR market closely, where more affordable versions of the Apple Vision and Samsung-Google headsets will compete. At the same time, Meta’s partners, such as Lenovo and Asus, may introduce their own high-end headsets.

This brings me to my next point: Meta’s approach to high-end XR, which may turn out to be quite different from what we expected.

The Year 2026 and Beyond

Meta has already ventured into high-end XR with the Quest Pro, which quickly became outdated—just a year after its release. The Quest 3 offered everything the Quest Pro did, but with significant improvements and at a third of the cost, lacking only eye and face tracking and QLED displays. The Quest Pro’s failure likely stemmed from being in development for too long. Meta has carefully analyzed the issues with the Quest Pro and learned from those mistakes.

Reports indicated that Meta initially planned to release the Quest Pro’s successor in 2024. This plan was later scrapped in favor of a 2025 version, which was also canceled. The Quest Pro 2, codenamed ‘La Jolla,’ was then slated for a 2027 release as a high-end device with Meta “aiming” for a $1,000 price point and Codec Avatar’s support, but this too was ultimately canceled.

This La Jolla prototype was set to support Meta’s Codec Avatars – one of the most promising technologies expected to emerge in the VR/AR space in the coming years, or perhaps even decades. These avatars are highly realistic virtual representations of people, distinguishing themselves from the more cartoony avatars currently used by Meta. They achieve a level of hyperrealism that successfully overcomes the uncanny valley, a challenge that has plagued similar technologies in the past.

As mentioned, this prototype was canceled, a fact indirectly confirmed by Meta’s CTO, Andrew Bosworth. However, this isn’t the end of the story—Meta hasn’t abandoned its high-end XR ambitions. During the meeting where the ‘La Jolla’ headset was canceled, Meta approved another high-end device, codenamed Puffin.

Meta is reportedly planning to release a headset in 2027 codenamed “Puffin,” which is described as resembling a “bulky pair of glasses” and weighing less than 110 grams. Although not intended to be AR glasses, it will be a full Mixed Reality headset in a glasses-like form factor. Meta aims to achieve this lightweight design by offloading the computing power and battery to a tethered puck that is “hoped” to be small enough to fit in the user’s pocket.

The ‘Puffin’ headset is also set to ship without controllers and will be operated using eye and hand gestures, similar to the Apple Vision Pro. While its interface design is akin to that of the Vision Pro, its very different form factor suggests that Meta might use this device to gauge interest in extremely lightweight headsets with a similar experience.

Keep in mind that this could end up being another canceled prototype by Meta, so even though these leaks come from a reliable source, they should be taken with caution.

What is more likely, however, is the release of the Quest 4 and Quest 4s in 2026. While specifics about these headsets are not yet known, we can make some educated guesses. For instance, there is a new reference in the Quest kernel to an HMD with a resolution of 2392×2560 per eye and LCD-based displays with a maximum refresh rate of 90Hz. The kernel has previously provided early details about resolutions for headsets like the Quest 3 and Quest Pro before their official announcements.

This resolution increase seems quite plausible, representing a 34% improvement over the Quest 3. For comparison, the Quest 3 itself saw a 30% resolution boost over the Quest 2. Such an upgrade would show a consistent trend of increasing resolution across headset generations.

We can likely expect eye tracking and possibly even QLED displays similar to those in the Quest Pro, though there are not enough leaks to back it up.

We might also see a growing demand for camera access from developers. While direct camera access is already available for smartphones, it’s not yet common in mixed-reality headsets, which have limited innovation. Allowing camera access could open up new use cases and potentially lead many companies to change their approach.

The Birth of True Augmented Reality Glasses

By the end of this decade, we might witness the emergence of the first true AR glasses. However, before that, at this year’s Meta Connect, the company plans to unveil its AR glasses prototype, codenamed “Orion.” According to Andrew Bosworth, it is “the most advanced thing we’ve ever produced as a species.”

These AR glasses will be used solely for demonstrations and internal research. Meta has produced only 1,000 units, designed to provide a glimpse into the future and help shape the devices that could reach consumers in the 2030s.

Meta also plans to release another set of AR glasses this decade, known as Project “Artemis.” These will be less advanced and more affordable, with a production run of 10,000 units. Additionally, Meta will launch new Ray-Ban Smartglasses with a display, though these will likely be 0-DoF, meaning they won’t track their position in space.

These devices will kick off the race to develop true consumer AR glasses, likely in the 2030s. It’s worth noting, however, that by the time these AR glasses arrive, they will probably lag behind mixed-reality headsets in terms of usability and software. By then, mixed-reality headsets will likely resemble glasses, feature advanced passthrough, be more publicly acceptable, and offer greater functionality than standalone AR glasses.