Virtual reality (VR) is on the cusp of a significant transformation in the entertainment industry, as major tech companies ramp up their investments and collaborations. Recent developments suggest that the long-anticipated breakthrough for VR may finally be within reach.
The VR landscape has evolved dramatically since the release of the Oculus Rift over a decade ago. Initially hailed as a game-changer, the technology struggled to gain traction in mainstream entertainment. However, recent initiatives from industry giants like Meta and Apple indicate renewed optimism. In 2025, Meta is reportedly in discussions with companies such as Disney and A24 to create immersive content for its Quest VR headsets. Meanwhile, Apple has rolled out updates to its Vision Pro headset, including features that allow users to share content across devices, enhancing the allure of VR for social viewing experiences.
A significant shift in content creation is also underway. The industry has witnessed a surge in VR content, including live virtual concerts and sports events. For example, Meta offered live virtual tickets to Stanley Cup games and hosted immersive concerts featuring artists like Alicia Keys and Blackpink. Furthermore, Disney launched a dedicated Disney+ app for the Vision Pro on its first day of availability in 2024. Despite these advancements, much of this content has been experimental, with companies testing the waters rather than committing to long-term projects.
The VR industry has long faced a “chicken-and-egg” dilemma: widespread adoption requires engaging content, while enticing content necessitates a large user base. Yet, according to Sarah Malkin, director of entertainment content at Meta’s Reality Labs, this cycle is beginning to break. Malkin believes that immersive experiences are becoming an integral part of daily life, stating, “I think the ‘it moment’ is when you are regularly engaging in experiences in mixed reality.”
Recent data from IDC indicates that global shipments of augmented reality (AR) and VR headsets rose by approximately 10% in 2024, reaching 7.5 million units worldwide. In the United States, shipments increased nearly 30.8% to 3.4 million units. Although IDC anticipates a decline in shipments this year due to postponed product launches, a significant rebound is predicted for 2026, with an expected surge of 98.5% to 11.3 million units.
Despite the optimism, the financial reality for companies like Meta has been challenging. The development of the Metaverse has cost Meta around $46 billion over three years, with Reality Labs reporting an operating loss of $4.2 billion and sales of only $412 million in the first quarter, a decrease from the previous quarter. Nevertheless, major tech companies are continuing to invest in VR technology. Meta recently invested $3.5 billion in eyewear manufacturer EssilorLuxottica SA, while Snap announced plans to release new augmented reality spectacles next year. Google is also collaborating with partners, including Xreal and Samsung, on upcoming headsets powered by its new Android XR software.
As the technology advances, industry experts believe that a wider adoption of VR is crucial. Bertrand Nepveu, a former contributor to the Vision Pro project, emphasized that while it is still early, there are no technical limitations preventing further growth. “We need people to invest because you need a critical mass,” he stated.
The potential for immersive storytelling continues to be explored by prominent figures in the entertainment industry. Notable names such as James Cameron and Sabrina Carpenter are beginning to delve into VR, yet widespread appeal remains elusive. Industry consultant Jenna Seiden noted that studios often misunderstand the medium, saying, “You can’t just take the flat version of what you put on Disney+ or Netflix and throw that up. You need to build natively.”
Creating content specifically for immersive platforms is essential for engaging audiences effectively. Seiden pointed out that exclusivity has been a successful strategy for platforms like HBO Max and Apple TV+, attracting viewers with unique offerings. The evolution of live virtual sports, according to Paul Raphaël, co-founder of Felix & Paul, presents an opportunity to engage audiences through 180-degree cameras, making it easier to adapt existing events for immersive formats.
As Hollywood seeks to navigate a rapidly changing media landscape — characterized by the rise of streaming services and the decline of traditional cable — VR could emerge as a vital distribution platform. Jack Davis, co-founder of CryptTV, highlighted that VR might serve as a critical outlet for premium content, stating, “This could be one of the only formats that premium entertainment actually seems like it makes sense for the user base.”
Despite the promise of VR, investment in the technology has lagged behind other innovations, such as self-driving cars and artificial intelligence (AI). Funding data from Crunchbase indicates that while AI investment has skyrocketed from $39.96 billion in 2019 to $105.36 billion by 2025, XR funding has been more volatile, peaking at $4.087 billion in 2021 before dropping to $347.69 million by 2025.
Nevertheless, as understanding of AI matures, there are indications that funding will return to XR initiatives. Nepveu noted that budgets are beginning to shift back towards XR as the technology becomes more clearly defined. Yet, tech companies face significant hurdles; they must persuade consumers that VR headsets are both valuable and comfortable for everyday use. This may explain why Apple is marketing the Vision Pro as a spatial computing tool, emphasizing its applications for work and productivity beyond traditional entertainment.
As the industry looks ahead, predictions about when VR will achieve its breakthrough moment vary widely. While some experts believe it could occur within a year or two, others foresee a timeline extending to five to ten years. Raphaël suggested that the future of content consumption may render traditional 2-D formats obsolete, likening it to how black-and-white films are perceived today. He stated, “If a film isn’t immersive, it doesn’t lose its value, but it becomes something of another era.”
With renewed investments and innovative content strategies, the VR industry stands at a pivotal juncture, poised to redefine how audiences engage with entertainment in the coming years.
