Sony hits pause on PSVR2 headset production as unsold units pile up

Sony Group Corp. has paused production of its PSVR2 headset until it clears a backlog of unsold units, according to people familiar with its plans, adding to doubts about the appeal of virtual reality gadgets.

Sales of the $550 wearable accessory to the PlayStation 5 have slowed progressively since its launch and stocks of the device are building up, according to the people, who asked not to be named as the information is not public. Sony has produced well over 2 million units of the product launched in February of last year, the people said.

PSVR2 shipments have declined every quarter since its debut, according to IDC, which tracks deliveries to retailers rather than consumers. The surplus of assembled devices is throughout Sony’s supply chain, the people said. Still, IDC’s Francisco Jeronimo sees a recovery for the product category in coming years with the help of Apple Inc.’s entry. “We forecast the VR market to grow on average 31.5 percent per year between 2023 and 2028,” he said.

Alongside Meta Platforms Inc., Sony has been one of the leading purveyors of virtual reality gear, but both have struggled to attract enough content and entertainment creators to make their platforms compelling. A similar problem stalks Apple’s much pricier Vision Pro headset, as it made its debut without tailored apps from key entertainment platforms Netflix and Alphabet Inc.’s YouTube.
Sony did not respond to requests for comment.

Tokyo-based Sony last month announced it’s shutting down its PlayStation London division, which was focused on making virtual reality games. That move was part of a wider set of layoffs that also affected in-house studios like Guerrilla Games, which had worked on creating a PSVR2-exclusive game in its popular Horizon series, Horizon Call of the Mountain.

“The high price of VR hardware acts as the main hurdle for its expansion,” said Macquarie analyst Yijia Zhai. “Currently, there are limited games that support VR devices, and that will also lead to lack of motivation for players to purchase VR hardware. This limited content also has a reason — the development cost for VR games is substantially higher than normal titles.”

Sony is still working on expanding the range of material available on the headset, and it said in February that it’s testing the ability for PSVR2 players to access PC titles.