HAMPSHIRE, UK – Nearly 60 million smartphone VR headsets will ship in 2021, up 240% from the 16.8 million expected to be sold this year. However, falling average selling prices of these devices means they will only account for 7% of hardware revenue, says Juniper Research.

While millions of consumers are already using VR on smartphone-based devices like Google Cardboard and Samsung Gear VR, developers need to go beyond the simple experience-based apps currently available and offer compelling content to keep users engaged, says the research firm.

The current “freemium” and lower-priced content will impact price expectations going forward, Juniper Research says. Thanks to the amount of demo and sub-$30 games and experiences on PC, consoles will be the only platform where cheaper prices are not already the norm.

Smartphone VR will have particular problems. Less than 5% of apps downloaded for smartphone VR are charged at the point of purchase. In-app purchases are much more common for this platform, providing extended experiences or expanded content for a fee, according to the firm. Ultimately, smartphone VR games will follow a similar pattern to other mobile apps, where the market is dependent on a small number of high-spending users for most of its revenue. This is in marked contrast to PC and console VR, where the market remains mostly pay-at-transaction.

A largely freemium market, however, will impact the quality of smartphone VR games, the research firm cautioned.

“Many consumers are likely to try the platform because the hardware is relatively cheap, and then turn away because of low-quality free content,” said James Moar, author of the report. “The best opportunity for smartphone VR is in providing subscription media, from film and series streaming to news broadcasts, to supplement existing online services.”