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(Bloomberg) -- Sony Group Corp. reduced projections for the initial launch of its PlayStation VR2 headset dramatically after early pre-orders disappointed, signaling little improvement for the hyped-but-unproven virtual reality sector.
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The company halved its forecast for shipments of the PSVR2, which is set for a Feb. 22 release, this quarter to about a million units, said people familiar with its deliberations. Sony had previously aimed to have 2 million headsets ready for the launch quarter and leverage its second-generation headset to drive user growth and adoption for VR.
The Tokyo-based electronics giant has told a supply partner to expect reduced display panel orders, according to the people, who asked not to be named as the information is not public. The company now plans to ship around 1.5 million units between this April and March next year, they added, though that figure may be adjusted further in response to demand.
Sony shares erased gains after the news in Tokyo Tuesday, ending the day just below where they started.
Consumers globally have taken to VR less rapidly than initially hoped, held back in part by a lack of titles that can showcase the technology. After diving in 2022, worldwide shipments of augmented and virtual reality headsets are expected to grow 32% to 12.8 million units this year, according to IDC estimates. The market is currently dominated by Meta Platforms Inc.’s Quest range, with nearly an 85% share. Sony does not rank among the top five providers and its first-generation PSVR has failed to secure even a 1% share.
Read more: Sony Bets Big on Next VR Headset With 2 Million Unit Target
Sony began accepting PSVR2 pre-orders on an invitation basis in November, but it soon relaxed conditions so that anyone wishing to buy the gadget could order one. The PSVR2 will work only with Sony’s PlayStation 5 console, which starts at $399. The headset is priced at $549. With less than a month to go until the PSVR2’s release, most stores are still taking pre-orders without a wait list — whereas hotly anticipated gaming gadgets are usually limited in supply at launch.
Sony had expected launch game titles such as Horizon Call of the Mountain would entice strong demand, a person familiar with its thinking said, but the new hardware’s pricing may have blunted consumer appetite.