As tech vendors shift their attention to AI-enabled smart glasses, the momentum behind virtual reality (VR) headsets appears to slowing once again. It’s not the first time the technology has seen expectations outstrip real-world demand. An initial wave of interest in the early 1990s generated predictions of mainstream adoption, before fading as the decade progressed. The more recent boom in enthusiasm — beginning roughly in 2014 with Facebook’s acquisition of Oculus — reached a fever pitch during the COVID-19 pandemic, when social distancing became the norm and the “ metaverse ” concept took off. Both VR and augmented reality (AR) were hailed as having finally arrived. Now, in early 2026, the enthusiasm bubble has burst again, as large vendors scale back ambitions amid tepid demand from consumers and businesses. “It’s not an overstatement to declare another VR winter,” said J.P. Gownder, vice president and principal analyst at Forrester. “I think we might even go as far as to say there’s only a handful of successful scenarios where people are using VR.” After spending billions of dollars developing AR/VR hardware and software, Meta reportedly cut 10% of its Reality Labs division last month. There are still several thousand Meta employees working on immersive technologies, and the company has hinted it will continue development of its Quest headsets. It also recently announced updates to its Horizon OS, pointing to a more focused entertainment use rather than using the devices for social media. But with the shuttering of services such as Horizon Workrooms — once billed as the metaverse for the workplace — and the closure of three of its acquired game development studios, it’s clear that Meta is shifting priorities. It’s not the only major tech firm stepping back from the promise of VR. Apple, too, was unable to kickstart demand for its high-tech (and high-priced) Vision Pro headset. Two years — and one incremental hardware update later — its central appeal remains still unclear , and Apple has yet to outline plans for a lower-cost follow-up. (The Vision Pro costs $3,499, a price tag that hampered widespread adoption.) “The market has spoken: not everybody’s going to afford an Apple Vision Pro, not everybody’s going to afford a [Samsung’s] Galaxy XR,” said Ramon Llamas, research director at IDC. “We’re talking about four-figure devices that are more expensive than some of the most expensive smartphones out there — that’s a lot for people to shell out.” How many VR devices are sold each year? Forecasts for virtual and mixed-reality headsets suggest modest growth for the foreseeable future. Around 200,000 VR-only headsets shipped in 2025, according to IDC, reflecting a broader shift toward mixed-reality devices. Fewer than 50,000 are forecast to ship this year. For mixed-reality hardware, the picture is brighter; just under 4 million headsets shipped in 2025, according to IDC. That represents a steep decline from 2024, a relatively strong year for the market, thanks to the launches of Meta Quest 3 and the Apple Vision Pro. This year, IDC expects a rebound in sales, with a forecast of 6 million units shipped. That expected increase is partly driven by the launch of Samsung’s Galaxy XR and and updates for the Vision Pro at the end of last year. “Our expectation is that the market’s going to rebound a little bit more in 2026,” said Llamas, “but are we going to see a hockey stick effect in 2026? I don’t think so.” There are, however, some niches where virtual and mixed reality headsets have found an audience. With employee training, for example, staffers can rehearse high-risk or high-pressure scenarios, including hazardous industrial work, customer conflicts, or — the most widely feared of all work tasks — public speaking . Remote customer support has seem some uptake, as well as employee collaboration around 3D images. And, while hardware vendors appear now to favor development of AI glasses , the launch of Samsung’s Galaxy XR headset and Google’s Android XR operating system in recent months indicate that large vendors haven’t entirely abandoned the technology — even if their focus is broadening to other device formats such as smart glasses. “I don’t think the market is disappearing, I think it’s going through its growing pains,” said Llamas. “Nobody is guaranteed smooth sailing from day one. They’re going to go back, they’re going to refine and they iterate again. We know all these companies iterate rather well, too.” Looking further out, IDC expects mixed reality devices to reach 12 million unit shipments in 2029 – triple the number shipped in 2025, and yet, still a small figure compared to other hardware devices. “For that market itself, that’s huge,” said Llamas. “But, in the grand scheme of things, it’s still way behind smartphones, PCs, tablets, other wearables like smart watches. “I still think that we’re catering to early adopters and technophiles, for the most part – I struggle to see it making a significant dent in the mass market.” Augmented and extended reality Other areas of the XR market – an umbrella term for virtual, augmented and mixed reality technologies – are developing at different rates. Gownder pointed to some business interest in augmented reality, though few rely on headsets. “There’s just not a lot going on here that isn’t being done on phones and tablets instead,” he said. One area of growth, said Llamas, could be “extended reality,” referring to glasses that connect to a smartphone or PC and then project a large screen into the user’s field of vision. This category includes devices from vendors such as Xreal and Meta Display glasses, which fall under IDC’s definition. These extended reality glasses have a more defined use case than mixed reality headsets, and they’re significantly cheaper and lighter, said Llamas. “You’re looking at a couple hundred dollars instead of a couple of thousand. And these really work as an accessory to your smartphone, instead of a replacement to your smartphone,” he said. IDC estimates that 1.3 million extended reality units were shipped in 2025 – more than double the 600,000 units sold in 2024. To set things in perspective, the entire XR market — that would be headsets and glasses combined — is estimated at just under 15 million units shipped in 2025, with  forecasts seeing that rise to just over 40 million units in 2029. AI smart glasses A related technology gaining traction in the consumer market involves AI-infused smart glasses, such as Meta’s Ray-Ban glasses . The glasses are more like wearables than XR devices, with no display or graphics. They rely on microphones, speakers and cameras for voice-based interaction with an AI assistant, as well as hands-free image and video capture, calls and audio playback. Without the need for graphics, these can be lighter and less conspicuous for wearers. “AI glasses are something that more consumers – beyond gamers, and beyond multimedia – can kind of wrap their brains around it and say there’s something going on over here,” Llamas said. Mobility is one advantage. “I can wear these out in public, I can walk down the street, I can drive a car, etc.,” he said. “Also, people are kind of warming to the idea of what it’s like to have a smart assistant in here — whether it be Siri, Gemini, or anything else.” After the early success of Meta’s Ray-Ban smart glasses — with 7 million sold in 2025, according to manufacturer EssilorLuxottica — numerous tech vendors are rumored to be building their own. That list includes Apple, Google, OpenAI and others. At the same time, it’s not clear that these devices will reach a mass audience. IDC predicts shipments will rise to 18.7 million units in 2029 — a far cry from the smartphone market, where more than 1 billion phones are sold each year. Gownder currently sees few uses in enterprise settings, especially with a lack of ruggidized device options. Beyond that, there are societal challenges at play, too. While privacy concerns have diminished somewhat since Google Glass launched over a decade ago, a recent New York Times report that Meta plans to add facial recognition to its Ray-Ban glasses highlights ongoing unease around wearable surveillance technology. The future of XR It’s possible that some of these device categories could merge over time as the technology evolves. Some see true AR glasses as the end goal, enabling graphic overlays with lightweight frames that are less obtrusive. That is likely a long way off, however. “There is some convergence afoot, but right now we’re not at that final point,” said Llamas. “The good news is that most technologies — smart glasses and XR glasses included — are usually a bridge to some other technology later on.” For now, there’s no realistic prospect of the technology hitting the high expectations set in recent years for XR devices  — whether thats virtual, mixed or augmented reality, or anything else. So is there actually a time in the not-too-distant future where XR technologies can achieve mass adoption? Here, analysts offer mixed views. “It certainly appears that VR has not found its true audience, or maybe there never will be one — it’s hard to say,” said Gownder. While not ready to make a final call, he pointed to a possible path where virtual reality devices “will just remain this really niche technology.” Llamas sees a market that is still in its early stages. “These are the important growing pains — some people say the birthing pains — of a new market getting itself going,” he said. Despite the reports that Meta and others are scaling back some of their ambitions in this area, he said, they’re not disappearing altogether. “They’re adjusting, they’re changing, as they should…,” said Llamas. “I think ‘VR winter,’ that’s a cool phraseology of what’s going on. But at the end of each winter, there’s also a spring.”