Meta loses XR market share as glasses drive industry growth

Global shipments of extended reality (XR) headwear fell 38.7 per cent year-on-year to 1.9 million units in the first half of 2026, as growing demand for XR glasses failed to offset a steep decline in conventional XR headset sales, according to research firm Omdia.

XR, or extended reality, is an umbrella term covering technologies that blend digital content with the physical or fully virtual world.

It includes virtual reality (VR), where users are immersed in a computer-generated environment, augmented reality (AR), which overlays digital information onto the real world, and mixed reality (MR), which allows digital objects to interact with the physical environment.

XR headwear therefore includes devices such as VR headsets and newer forms of smart or display glasses.

The latest Omdia figures showed that the wider XR headwear market continued a prolonged decline, with the market having recorded its fourth consecutive annual decline in 2025 following the pandemic-driven peak in 2021.

However, the composition of the market was changing rapidly, with glasses accounting for a substantially larger share of shipments.

XR glasses represented 25.8 per cent of total shipments in the first half of 2026, up from 10.2 per cent during the same period a year earlier.

Almost all of that increase came from tethered display glasses, which connect to another device such as a smartphone or computer rather than operating as fully standalone headsets.

RayNeo, VITURE and XREAL collectively accounted for 93.1 per cent of the tethered display glasses segment, underlining the concentration of the emerging market among a small number of manufacturers.

Strong demand for products including the RayNeo Air 4 and VITURE Beast series helped push RayNeo and VITURE into second and third place respectively in the overall XR headwear market.

RayNeo held 9.9 per cent of the overall market, while VITURE accounted for 8.6 per cent.

“XR glasses are gaining momentum because consumers are increasingly willing to trade some immersion for less friction,” said Qiran Ju, senior analyst at Omdia.

“Lighter designs and familiar use cases such as video viewing and gaming are lowering the barriers to adoption,” Ju said.

The shift towards lighter glasses came as the market leader, Meta, continued to face weaker demand for its VR headsets.

Meta remained the largest XR headwear supplier overall, but its market share fell sharply from 71.3 per cent in the first half of 2025 to 48.2 per cent in the first half of 2026.

Demand for the Meta Quest 3 and Quest 3S continued to weaken, contributing to the broader decline in headset shipments.

“Meta poured massive resources into headsets, but has struggled to replicate the breakout success of the Quest 2,” said George Jijiashvili, senior principal analyst at Omdia.

“Despite the Quest 3 and 3S offering better specs at accessible prices, they have failed to drive a major upgrade cycle or meaningfully expand the audience,” he continued.

“The ongoing slump across the headset market reinforces that bulky headwear remains a tough sell beyond a core enthusiast base,” he explained.

The regional picture also showed a changing market, although North America remained the largest XR headwear market during the first half of 2026.

North America accounted for 43.9 per cent of global shipments, followed by Western Europe with 23.8 per cent.

Greater China recorded the largest increase in its share of global shipments, rising from 11.9 per cent in 2025 to 16.3 per cent in the first half of 2026.

The increase lifted Greater China above the rest of the Asia-Pacific region, making it the world’s third-largest regional XR headwear market.

Omdia attributed the increase largely to strong domestic demand for tethered display glasses.

The changing product mix points towards an XR market that may increasingly prioritise convenience and everyday applications over the fully immersive experiences that characterised much of the industry’s earlier growth.

“The next phase of XR evolution will be less about requiring people to enter isolated virtual environments, and more about embedding AI and spatial capabilities naturally into everyday wear,” said Jijiashvili.

“Moving away from occasional, closed-off sessions to frequent, light-touch interactions will be the key to breaking out of the current enthusiast niche,” he added.

The figures suggest that while the overall XR headwear market remains under pressure, glasses are beginning to provide a different growth path from the bulky headsets that have dominated the sector.

For manufacturers, the challenge will be turning the current interest in lighter devices and familiar uses such as gaming and video viewing into a broader consumer market.